- Associated Press - Thursday, April 9, 2015

PHOENIX (AP) - Arizona Gov. Doug Ducey has signed a bill that overhauls rules for ride-hailing companies such as Uber and Lyft and removes regulatory roadblocks to the new and growing services.

The legislation Ducey signed Thursday lays out a new regulatory scheme for ride-hailing firms and traditional taxi companies and sets minimum insurance rules. It also requires vehicle inspections, driver background checks, and sets a zero tolerance policy for drug and alcohol use by drivers.

The so-called Uber-bill was one of the more contentious of last year’s session and was ultimately vetoed by then-Gov. Jan Brewer. Lengthy negotiations between insurers, ride-hailing and taxi firms in the 2015 legislative session led to a deal.

The Senate and House overwhelmingly approved House Bill 2135 in the final weeks of the session that ended last week.

“This is one more simple but significant measure to promote innovation in Arizona,” Ducey said in a statement. “Ridesharing companies like Uber and Lyft are already booming businesses - rather than standing in the way of growth, we should be encouraging it.” 

Taxi companies that also operate ride-hailing services won a major concession on insurance in the bill. The original deal hammered out between the groups would have required those services to have full taxi insurance when available for street hails, but that provision was never adopted. Regular taxi and limousine companies also are required only to carry $25,000 in liability insurance when they haven’t accepted a ride request or are not carrying passengers.

Previously, taxi and limousine companies had to carry $300,000 in commercial insurance at all times.

Ride-hailing, limousine and taxi services must all carry $250,000 in liability insurance when they have passengers in their vehicles.

One of the biggest issues involved insurance regulations for drivers who use the app-based system to answer calls. The companies provide insurance while drivers have a fare, but while they’re awaiting dispatch they had only been covered by their personal policies. The bill requires those ride-hailing drivers to have insurance “riders” that provide commercial coverage when they’re not carrying passengers.

Lawmakers passed a bill last year that would have exempted the new app-based transportation companies from insurance regulations imposed on traditional taxi and livery companies. It was vetoed by then-Gov. Jan Brewer, who said it failed to protect consumers.

The companies continued to operate, and the state Weights and Measures Department had issued nearly 100 citations by November to drivers who did not have proper commercial licenses or insurance.

Ducey halted the policy in January, saying it wasn’t working and was hampering job creation.

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