New Colorado law will increase ride-sharing prices
DENVER — Carpools could soon start costing passengers a bit more after a bill was passed requiring companies to increase their insurance coverage.
The law dates back to a 2020 accident where Brian Fritts and his roommate were seriously injured. Fritts was riding in a Lyft on his way home when the vehicle was hit by a fleeing driver. He rolled over and the driver who caused the accident fled.
Fritts does not remember the accident; he remembers waking up later in a hospital and learning what had happened and the extent of his injuries.
Five of his vertebrae were shattered, his jaw was broken and one of his lungs collapsed after a rib punctured it.
“They put a rod, a titanium rod in my neck and six screws to hold my neck in place. (The accident) broke my jaw, so they had to reset it by breaking it the other way again,” Fritts said.
His roommate was also seriously injured. Both were wearing their seatbelts. The accident put Fritts out of work for months and required surgery and rehab. When the medical bills started coming in, he assumed Lyft would help cover some expenses.
“We submitted the claim to Lyft and their insurance policy and, to our surprise, they denied it,” said Eric Faddis, Fritts’ attorney.
To be clear, the crash was not the Lyft driver’s fault. At the time, Colorado had no law requiring ride-hailing companies to carry insurance coverage for their passengers for hit-and-runs or uninsured motorists, which Fadddis considers a legal loophole.
“I’m a personal injury attorney and had no idea someone in Brian’s position wouldn’t be covered in these circumstances,” Faddis said. “So if a personal injury attorney doesn’t know, how can we expect tens or even hundreds of thousands of Coloradans to know they’re unprotected when they get into a carpool? and that they are injured in these circumstances.”
Fritts doesn’t have a license or a car, so he doesn’t have car insurance that would have covered him either. He now faces around $167,000 in medical bills on his own.
So this year, Fritts and Faddis began working with state lawmakers on a bill to address some of those legal loopholes.
House Bill 22-1089 requires ride-sharing companies to carry insurance of $200,000 per person for uninsured motorists and $400,000 per occurrence, and states that passengers and drivers must be covered at all times .
The bill was signed into law by Governor Jared Polis this week. During the legislative debate, however, ride-sharing companies have hit back, saying the change will drive up costs at a time when passengers can least afford it.
“We continue to disagree with this bill. It does little to achieve its stated goals, but would significantly increase costs for cyclists and impede our ability to invest in other vital Colorado priorities, such as increasing the adoption of electric vehicles to reduce carbon emissions statewide,” Lyft representatives said in a statement.
The company estimates that it will need to increase rates by at least 6% to cover the increase in insurance coverage.
It also comes as ride-sharing companies prepare to implement a 35-cent-per-ride fee as part of major transportation legislation passed last year to help pay for roads, bridges and public transit in the state.
While the governor and lawmakers have deferred gas fees until the transportation law, other fees, like the one that applies to rideshares, are still slated to go into effect July 1.
Lyft argues that between the two fee increases, Colorado will be one of the most expensive markets in the country to operate.
Uber also has concerns about the bill.
“We are disappointed that the legislature rejected trade-offs that would have protected passengers without increasing costs, and instead opted to pass legislation that singles out ride-sharing companies and will almost certainly lead to significant price increases for Colordans of every day,” the company said in a statement. .
Carpoolers also wonder why a law made for safety reasons only applies to them and not to limos, taxis, shuttles or party buses, for example.
Faddis says rideshares in particular have been targeted by this legislation because of their growing popularity and the way they are revolutionizing transportation in the state and he says the extra cost is worth it if it means passengers are better protected.
The increase will amount to approximately 6 cents per dollar spent on a ride.
“If that means people like Brian Fritts aren’t saddled with six-figure debt and permanent impairment for the rest of their lives without compensation, then that’s worth it to me,” Faddis said.
Fritts still relies on carpools to get to and from work each day; he even rode one on the way home from the hospital, but he says he refuses to ride one that goes up the highway.
He hopes this new law will protect other runners from a situation like his.