The Common Council on Tuesday wrestled with a question the taxicab industry has raised since upstart ride-sharing applications arrived in Buffalo in April: Who pays in case of an accident?
Taxi drivers pay about $5,000 a year for insurance covering themselves and their passengers.
Lyft, a company that has developed a mobile Web application to connect people looking for rides with nearby drivers who have seats available in their cars, approaches insurance differently. Its drivers have their own personal policies, while the company has policies covering certain events for some situations.
Simply having insurance is not the same as having the right insurance, said Gregory V. Serio, a consultant to the taxicab industry and a former state insurance superintendent.
Personal auto insurance policies that cost on average $1,094 a year in New York do not cover economic activities, Serio said.
Taxicabs are required to carry a higher level of insurance that allows them to carry paying passengers, which Lyft drivers do not carry.
“What they’re doing is trying to eliminate the cost of doing business in the State of New York,” said Kevin R. Barwell, president of the Limousine, Bus, Taxi Operators of Upstate New York.
Lyft representatives are expected at the Council’s Community Development Committee meeting in July.
Lyft drivers request “donations” from their passengers.
No cash changes hands in a Lyft car, because before individuals can request a ride, they must input their credit card information into the Lyft app. In Buffalo, Lyft has rates and calculates a suggested donation amount. If passengers fail to pay enough of the suggested donation, drivers can elect not to pick them up for future rides.
North Council Member Joseph Golombek Jr. has said that he believes Lyft is operating in the city illegally but that he is willing to bring the city’s laws in line to allow them to operate legally.