Legislation threatens Uber’s Iowa residency


Terry Aguilar, an Uber driver in the Ames area, checks his app during a ride-a-long Aug. 24. 

Shannon Mccarty

Just as ISU students are getting used to having Uber, a disagreement on liability insurance in the state legislature may take it away.

Iowa legislators are attempting to regulate transportation network companies such as Uber with a bill containing liability insurance requirements for drivers. Uber has one issue with the bill that could threaten the company’s operations in Iowa.

The growing ride-sharing company that allows customers to get a ride through an app on their cellphones came to Ames in August 2015.

“Aspects of the bill are good,” said Mike White, Uber Iowa general manager.

White said Uber has worked in collaboration with similar companies such as Lyft, as well as major insurance companies to build an insurance structure for liability insurance as a base for lawmakers.

States including California, Ohio, Florida, Kentucky and many others have passed similar regulations for the transportation network companies.

“Before [the bill] left the house, an additional requirement not in the model of legislation was added,” White said.

That new addition is the requirement of transportation companies to provide comprehensive and collision insurance for drivers.

Uber left Kansas in early May of last year when the sunflower state passed the same insurance requirement. The company called the regulations “unbalanced and backward” in a statement on its website’s newsroom.

A bill was signed later that month reversing that requirement, and Uber was back in business.

Uber driver Blake Lanser, senior in child, adult and family services, is confident if Uber did leave it would eventually be back.

“I think a lot of students would be pretty upset — some say they take Uber because they can’t stand the cab companies,” Lanser said.

State Sen. Tod Bowman, D-Maquoketa, is the chair of the Senate’s Transportation Committee, where the bill currently sits. He said his main concern is the safety of Iowa citizens.

“I’m not sure what [Uber’s] issue was with that part of the bill,” Bowman said.

White said the major issue for Uber is there is no statute currently in Iowa or anywhere in the country that mandates a company to provide comprehensive and collision insurance.

“This insurance is required because of a private contract between the individual and their bank,” White said. “We believe it should be managed through that private contract.”

White used the example of a floral or food delivery company that allows employees to use their personal car for commercial use, in which it is not mandated to provide comprehensive and collision insurance on those vehicles.

“This would be a significant exception,” White said.

State Rep. Peter Cownie, R-West Des Moines, who is the chair of the Commerce Committee, which first introduced the bill in the house, sent out a newsletter earlier this month expressing his hopes to find a resolution with Uber.

“It will be a great disappointment to me personally and a blemish on the legislature if we cannot come to an agreement,” Cownie said.

Cownie added that it is important for the legislature to show concern about the safety of Iowans, as well as having the ability to welcome new industries.

Other aspects of the bill include one million dollars per accident for death, bodily injury and property damage, and medical payments coverage. The bill provides an option for the company to provide the insurance, the driver or a combination.

“Those are things we support,” White said. “We’d actually support the creation of a regulatory structure in the state that would provide background checks and a definition of how transportation network companies are to operate in-state everywhere.”

White said this would add a lot of certainty about the business operation and potentially enable the company to expand into other cities.

Uber’s main goal right now is to educate lawmakers about the unique business and the implication of comprehensive and collision insurance.

“The most important thing that people who support Uber in Iowa can do is reach out to their state lawmakers,” White said. “They have a lot of influence over their lawmakers when they do that outreach.”