A bill that would force ridesharing companies to buy more insurance has been approved by the California State Senate Insurance Committee.
The legislation, approved late Wednesday, would force Uber, Lyft and other ridesharing company drivers to have $750,000 worth of coverage from the moment they turn on their app, not just when they accept a ride.
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In a statement to CNBC, Uber immediately responded to the passage of the measure out of committee.
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"There is no insurance gap. Uber supports requiring insurance coverage while a driver is engaged in ride sharing as outlined in AB 2293—but the legislation must recognize the flexibility afforded by innovation. Colorado found a solution that adequately protects riders and drivers without ignoring the distinctions of ride sharing technology. The Senate Insurance Committee proposal would add unnecessary state insurance requirements to the bill over and above what is currently required for any car on the road, including most taxis, during the period when no rider is in the car and no commercial activity is taking place," Uber said.
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The legislation comes as at least one the University of California campus said it won't be reimbursing employees who use several sharing-economy companies.
"Until further notice, please do not use services such as Uber, Lyft, Airbnb or any other similar business while traveling on or engaging in UC business," said Belinda Borden, UCLA's director of travel services.
—By CNBC's Mark Berniker