Turo car-share app pushes bill to reduce insurance requirements

In the waning days of the legislative session in Albany, a peer-to-peer car sharing company is pushing hard for a new bill that would reduce the liability insurance requirements for the industry. While supporters say the change is needed to keep these companies in New York and create parity with the traditional rental car industry, opponents argue that reducing the liability coverage serves to endanger people on the road to the benefit of the tech company. It’s part of a broader fight over peer-to-peer liability that could have big implications for ride-share giants like Uber.

Car-sharing is a relatively new industry much like ride-sharing, but instead of a driver using their own vehicle as a cab, they rent out the vehicle to someone who drives themselves. In New York, the companies that facilitate either the rental or the ride are subject to higher liability requirements than the traditional rental car companies that own the cars they rent out. Turo and other car-share companies are trying to change that. 

Turo is the largest car-share company operating in New York and the driving force behind the legislation sponsored by state Sen. James Skoufis and Assembly Member David Weprin. Under current law, companies like Turo must provide supplemental liability insurance of at least $1.25 million on top of other insurance requirements for rental cars. Traditional rental car companies – which, unlike Turo, own their own cars – don’t have to pay for that additional insurance. The bill from Skoufis and Weprin would remove that requirement and treat companies like Turo the same as other rental car companies, bringing liability coverage as low as $25,000 instead. 

Peer-to-peer ride sharing, and Turo in particular, has a rocky history in New York. When the company first tried to operate in the state a decade ago, the state Department of Financial Services determined that it misrepresented the impact on a car owner’s insurance should they choose to rent. In response to that finding, the company, which was then called RelayRide, suspended its operations in New York in 2013.

Turo and other car-share businesses only started to come back to New York in 2021, afterstate officials approved a law to specifically regulate the industry. It was that law which established the additional $1.25 million liability insurance requirement. At the time, both Skoufis and Weprin voted in favor of the legislation. 

Skoufis told City & State that the last few years have allowed him to evaluate the impact of the law. “I've made the judgment, and I think many of my colleagues have made the judgment, that these limits are better aligned with rental vehicles which offer, I would argue, satisfactory consumer protections,” he said, adding that the regulations have made operating in the state more difficult. “I don't want us to wait for the industry to pick up and leave New York before we do something about it.” Another car-share company, GetAround, left the state last year, citing costs related to insurance requirements.

Weprin told City & State that the legislation originated with Turo, which brought the issue to his attention. “We're the only state that has this additional coverage, which is becoming very expensive for them, and we'd like to see them continue and flourish in New York state,” he said. Skoufis and Weprin introduced their legislation at the start of March, and Turo has spent over $100,000 lobbying for either rule changes or their specific bill between January and April. Lobbying data for May is not yet available but likely reflects more similar spending.

A spokesperson for Turo said that while the legislation is new, the company has been lobbying on the issue for several years and has retained multiple firms during that time. “Unfortunately, the exorbitant cost of insurance in NY is pushing the peer-to-peer car sharing industry out of the state,” spokesperson Catherine Mejia said in a statement to City & State. “We’re supportive of Assemblyman Weprin’s bill because it helps to align insurance requirements for peer-to-peer car sharing with what is already true in the rest of the country and what is already true of traditional rental cars in NY.”

But the legislation does face opposition, including from street safety proponents. Assembly Member Linda Rosenthal, who has sponsored multiple bills meant to improve street safety, said that reducing liability requirements is counterintuitive to ensuring protections on the road. “Things have only gotten harder out there on the road (since Turo came back to New York),” she told City & State. “So then wanting to scale (insurance) back is very, very concerning. The amount they want to scale it back to hasn’t increased since 1996.” Rosenthal added that it’s common for companies that want more favorable regulatory conditions to threaten to leave the state, but she said that as long as Turo still makes money here, it won’t leave.

The bill is also opposed by trial lawyers in New York. “New Yorkers face far greater risk if peer-to-peer carshare middlemen are allowed to slash liability coverage by more than $1 million,” said Victoria Wickman, president of the New York State Trial Lawyers Association. “Customers are discovering, often too late, that coverage is misrepresented and riddled with exclusions. Legislators rightly recognized the risks posed by these platforms, including the high potential for vehicle malfunctions and lack of driver vetting, and must now reject this reckless attempt to evade accountability and uphold strong insurance safeguards." The sponsors dismissed the idea that reducing insurance costs would lead to less safety on the streets.

The fate of this bill could have implications for a separate but similar campaign by Uber in New York City to reduce its own liability insurance requirements to align with traditional taxis. The ride-share giant has spent significantly to lobby city lawmakers to change the law and reduce coverage from $200,000 down to $50,000. Uber contends that the additional liability insurance costs are unfair and detrimental to its business. Skoufis distinguished between his proposal and what Uber is asking for, which he is not necessarily supporting, but success on the car-share front could prove to be a boon for ride-share companies.

Both Skoufis and Weprin are optimistic that the car-share bill can pass before the Legislature breaks for the year. In the Assembly, the legislation recently advanced out of the Insurance Committee with bipartisan support – though a few Democrats voted against it. It hasn’t yet moved in the state Senate, but Skoufis said he continues to push the bill.