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All nine Seattle City Council members say they are worried that most Lyft, uberX and Sidecar drivers are chauffeuring passengers across Seattle with gaps in insurance coverage the council wants to address as soon as possible.

Each of the app-dispatched ride services says it has insurance of at least $1 million in coverage for rides that drivers offer in their personal cars. But because the companies have never shared their master insurance policies publicly, city officials don’t have a clear idea of what is covered and what isn’t.

What is known about the companies’ coverage methods is they require drivers to have
personal insurance policies even though those policies may not protect against damages from an accident while drivers are offering commercial services.

“I’m worried for the drivers who are excited to be driving for these companies right now and making some money, that there is exposure being shifted onto them that they may not be aware of,” Councilmember Mike O’Brien said at the last taxi-committee meeting. “Or they may be aware that they’re taking a risk and hoping it works out OK. And frankly, from our position, I don’t think that’s acceptable.”

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It’s only through lawsuits that details about the potential insurance gaps leak out. One was filed by the family of 6-year-old Sofia Liu, who was struck and killed in San Francisco on New Year’s Eve. The lawsuit against the driver claims that he was “live” on the uberX smartphone app, without any passengers, when he struck the girl, her mother and younger brother around 8 p.m. as they used a crosswalk.

But uberX’s parent company, Uber — which is also being sued — said in a statement that the driver “was not providing services on the Uber system during the time of the accident.”

And because the driver’s personal insurance may not cover an accident while the driver was providing a commercial service, that might not cover damages either.

An ordinance detailing new regulations for the ride services, called transportation network companies (TNCs), that the City Council is expected to vote on this month is intended to help close the gaps in insurance coverage. Although discussion of limits on the number of drivers has split council members, the issue of insurance has not.

But council members haven’t decided on exactly what kind of insurance options to give the TNCs. That will be hashed out more Monday, at their next regular meeting.

The ordinance would require that TNC insurance provide liability coverage while each driver is on the company’s app system, not just when passengers are in the car.

Company representatives have told the city they are against that kind of coverage, saying drivers could exploit their insurance. A driver could get in an accident on his own time, then quickly log onto the app and claim coverage from the TNC.

The companies say they have withheld the master liability insurance policies for proprietary reasons.

“We have spent a great deal of time and effort acquiring this policy and do not share it publicly for competitive reasons,” said Andrew Noyes, a spokesman for Uber.

Uber, Lyft and Sidecar hope negotiations about insurance standards can include a group they announced in February, the Peer-to-Peer Rideshare Insurance Coalition.

The group includes representatives from Allstate, Farmers Insurance and the California Public Utilities Commission.

Taxi and for-hire companies are required to share their liability-insurance policies with the city, which reviews each to make sure they comply with state and local laws.

Each taxi owner pays between $7,000 and $11,000 per car each year for insurance, according to Yohannes Sium, a lawyer for the Seattle/King County Taxi Owners Alliance. Each driver is also required to pay a workers’ compensation fee to the state to make sure his own injuries would be covered in an accident.

Sium, whose father owns two taxis, says he’s been asking the city about when it would take enforcement action against TNC drivers or TNCs themselves for having insurance that does not meet legal requirements.

The City Attorney’s Office would not say when or if the city would clamp down on the companies if they did not prove they have sufficient coverage. Mayor Ed Murray’s office also declined to comment.

Sium said, “They don’t want to take an unpopular position against these companies — I get that. But the moment there’s a car accident, how popular are they going to be then?”

TNCs operate outside the city as well. Before insurance requirements are placed on Lyft, uberX and Sidecar outside of the city, the Metropolitan King County Council would have to determine how it would treat the companies.

But, according to a spokesman, King County is waiting to see what Seattle does first.

Alexa Vaughn: 206-464-2515 or On Twitter @AlexaVaughn.

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