Talks of insurance and tax dominated Thursday’s discussion of the Legislature’s first step to regulate peer-to-peer car-sharing services.
The Senate Commerce Committee testified on a bill sponsored by Senator Joe Cryan (D-Union) that would require companies that manage peer-to-peer car sharing to provide insurance liability for vehicles rented through their platform .
Car sharing companies allow vehicle owners to rent their cars to others when they are not using them. These companies – which the bill distinguishes from car rental companies – already operate in New Jersey, although a lack of regulation means it’s often unclear whose insurance is on the hook after an accident.
“Now it’s the wild, wild west. They sue everyone and there are carriers that deny it. Where is the victim going?” said Senator Jon Bramnick (R-Union).
While the measure would ensure that someone – the car’s owner, its driver or the carsharing company – had insurance, there was disagreement as to whether the coverage required by the law would be sufficient.
“Because most traditional auto insurance policies don’t cover a car driven through a peer-to-peer service, the peer-to-peer company should always be the primary insurance while the car is being shared,” said Jim Lynch, president of the New Jersey Association for Justice, a legal advocacy group.
The bill, as written, would require car-sharing companies to pay only liability, personal injury, and underinsured and uninsured motorists up to the state’s minimum limits. Lawmakers have tried to raise some of those limits in recent months, including a successful push that will raise minimum liability coverage for personal injury next year and again in 2026.
Lynch demanded that car-sharing companies carry at least $1.5 million in liability insurance, the same coverage required by ride-sharing services like Lyft and Uber. Kenny Montilla, a lobbyist for the carsharing company Turo, noted that the bill would prevent cars rented through a carsharing service from being used as taxis or other rental vehicles.
“To speak to what we like about this bill, it ensures that coverage does not lapse, so no matter which party tries to sue, there is coverage that is provided by the driver of the shared vehicle, the owner of the shared vehicle vehicle or platform provided in the event that either party is uninsured or underinsured,” said Montilla.
Bramnick was close to endorsing the $1.5 million limit, but argued that car sharing companies should be required to provide more than minimum liability insurance.
Montilla said car rental companies are subject to the same limit, adding that car-sharing companies offer protection plans that provide additional coverage.
Rental companies that compete directly with car-sharing companies said their competitors should pay the same fees and taxes levied on rental cars because they offer the same service — even if car-sharing companies try to claim that they don’t do this.
“I know you’ve probably heard, and you may hear testimonies in the future, that peer-to-peer companies don’t rent cars,” said Dean Thompson, vice president of finance at Enterprise Rent-A-Car. “I encourage you to do a Google search and check out their Google ads. You see “Rent the perfect car”. You’ll see “Rent Now.”
For rentals in New Jersey, there is a daily security fee of $5 in addition to sales tax. Car sharing companies pay sales tax but not the fee. They’re also exempt from airport fees and local taxes on rental cars levied in Newark and Elizabeth, Thompson said.
Lawmakers might find extending fees and taxes to carsharing companies a hard pill to swallow. Rental cars tend to be more expensive than car sharing, and additional costs could make the newer service less accessible to low-income residents.
“I recently traveled abroad and needed to rent a car for five days. I used one of the well known companies that are here. The cost for five days was $750 and it wasn’t a super luxury car,” said Senator Bob Singer (R-Ocean), a co-sponsor of Bill, who added, “To make it affordable for young people, make it affordable for young people Making people affordable for people who are starting out or struggling – in these financial times, that’s so important.”
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