Hawaii lawmakers are on track to add new insurance requirements to the ride­ sharing services Uber and Lyft. The bill, Senate Bill 1280, attempts to address what many see as an “insurance gap.”

However, Uber and Lyft drivers are already double insured.

These drivers are already required by Hawaii law to purchase their own personal car insurance policies. When the drivers are working, they are also insured up to $1 million by Uber or Lyft.

Uber ride sharing

An Uber vehicle in San Francisco.

Flickr.com/Adam Fagen

By contrast, Honolulu requires that taxi companies only carry insurance of $100,000 per person, $200,000 for more than one person, and $50,000 for property damage ­­ far less than the $1 million in commercial liability insurance that Uber and Lyft provide.

The Uber and Lyft insurance can scale up and down, depending on who is in the car. If the driver is in the car with the app off, the driver’s personal insurance is used. If the app is turned on, a middle ground contingency insurance and the personal insurance is used. And if the app has a customer, the million dollar primary insurance kicks in.

This ability to scale the insurance up and down allows ride­ sharing companies to save the best insurance for the customer.

However, SB 1280 in it’s current form guts the “middle ground” contingency insurance. This means that only the most expensive form of insurance is used at all times ­­ even if no customer is in the vehicle ­­ and this turns a profit into a loss.

As far as safe driving goes, Uber and Lyft drivers score better than most taxi companies nationwide. A study by a driving analytics company called Zendrive in San Francisco found that ride­s haring drivers were the least likely to speed, compared to taxi drivers, or regular drivers.

The incentive for this level of safety may come from the innovative rating system used by Uber and Lyft.

After a passenger is dropped off, he or she can give the driver between 1 to 5 stars. If any driver dips below 4.6 stars, they may be suspended.

The proposed bills also add more regulations for background checks and car inspections. However, Uber and Lyft already go above and beyond the regulations. The ride­ sharing companies do not accept any driver with a criminal record within the past seven years, which is crosschecked with the National Sex Offender Registry, and other accredited third parties.

Taxi companies, by contrast, are only required to go back two years for their background checks.

Uber and Lyft may actually help make riders safe by decreasing alcohol related crashes, according to a study by Mothers Against Drunk Driving. In Honolulu, data suggests that more people are using Uber and Lyft to get home safely late at night, when DUI incidents are historically common.

Uber has already left Nevada, and Auburn because of “burdensome regulations”. However, 17 other cities and four states have passed reasonable insurance requirements which effectively mirror Uber and Lyft’s high safety standards, and allow the companies to continue their service.

The million dollar insurance system that Uber and Lyft provide has worked safely in Honolulu all year.

The ride sharing companies have joined the taxi companies in offering creative and safe solutions to traffic congestion on Oahu. Adding unreasonable requirements may effectively end ride sharing in Hawaii, which may leave Hawaii’s citizens with options that are less safe.


Community Voices aims to encourage broad discussion on many topics of community interest. It’s kind of a cross between Letters to the Editor and op-eds. This is your space to talk about important issues or interesting people who are making a difference in our world. Column lengths should be no more than 800 words and we need a current photo of the author and a bio. We welcome video commentary and other multimedia formats. Send to news@civilbeat.org. The opinions and information expressed in Community Voices are solely those of the authors and not Civil Beat.

About the Author

  • Joe Kent

    Joe Kent is the Vice President of Research and Development for the Grassroot Institute of Hawaii, a non-partisan public-policy think tank which focuses on limited and accountable government in Hawaii. He grew up in Hilo, Hawaii, and spent seven years as a public school teacher in the Department of Education, teaching in both Minnesota, and in Lahaina, Maui.