Alabama Senate committee approves bill regulating ride-share programs

An Alabama Senate committee Wednesday approved a bill that would regulate ride-sharing in the state.

SB 232 sponsored by Sen. Chris Elliott, R-Daphne, would subject peer-to-peer car sharing program, like Uber and Lyft, to requirements for insurance, liability and reporting.

“This is something that is very popular in my area of the world where we have a lot of tourists that come in, rental cars are short of course, and it is an opportunity to monetize your Jeep, or whatever you have got, to let somebody drive it for the weekend,” he said during the committee meeting. “Currently, there are no regulations or requirements on this at all, and what we are trying to do is set something to that effect.”

The measure passed by a roll call vote 14-2.

The bill would need to move quickly to pass in the current session, with only three days left.

The bill requires peer-to-peer companies to ensure drivers have necessary insurance and requires them to keep records on drivers’ pick up and drop off points and revenue. The bill also establishes consumer protections regarding disclosure and safety recall provisions.

Elliott’s legislation also exempts the vehicle owner who participates in a peer-to-peer ridesharing program from paying taxes for leasing or renting the vehicle if the person has paid all the taxes when it was purchased.

Taxes and fees paid by people using a vehicle for personal use differ from rental car companies, Elliott said. Individuals buying their own cars pay taxes at the time of purchase. Vehicles used for rental purposes are exempt from purchase taxes but make up for it when renting their vehicle fleets.

“What we are trying to say is, ‘this is your personal car that you happen to rent,’ and you pay the taxes that are associated with that,” Elliott said. “The rental car companies are over here, and they do things differently, and we are fine with that, and we are not going to mess with them.”

The legislation sets out rules that the ride-share program will check to ensure that the vehicle owner and the driver are insured for the minimum amount required by law when the vehicle is part of a ride sharing program.

The driver, vehicle owner, or the ride-share program may pay for the insurance, but when the insurance lapses, then the insurance of the rideshare program then assumes responsibility.

The bill also states that the ride-share program is responsible when someone is injured or when property is damaged, for another party, uninsured or underinsured motorists that are involved in an incident as part of the ride-sharing program.

If there is a dispute over responsibility for the vehicle, then the insurance company or the ride-share program is responsible for the claim in case any issues arise.

The ride-share program is also responsible for keeping records about the vehicle, such as the number of times it was used, the locations for drop off and pick up, along with the revenues received by the shared vehicle owner.

The bill would also require ride-share drivers to be at least 16 years old and have authorization to drive the class of vehicle that will be used as part of the ride-share program.

Elliott introduced several changes to the original version of the bill, both as a substitute as well as subsequent amendments.

One of the provisions states that taxes collected in the ride-sharing program will only apply for those transactions that are not subject to sales and use taxes when the vehicle was purchased, or if the taxes were not paid when the vehicle was first titled and registered in the state.

It also mandates that the Department of Revenue reports each year to the legislature for any decreases in the taxes collected because of the bill.

Elliott then introduced an amendment in committee that the vehicle owner will maintain the vehicle.

“That is just ensuring that the vehicle is kept in safe working order,” Elliott said.

Sen. Linda Coleman-Madison, D-Birmingham, asked what entities would confirm that the vehicle is in proper working order. Elliott left that open, only reiterating that the vehicle had to be maintained properly by the owner of the vehicle according to state statute.

Elliott added that the rule is already codified into state statute.

“What is next, your lawn mower?” Coleman-Madison asked.

She added that she was concerned that citizens will be charged for using their personal property as they saw fit. Elliott tried to assure her that was not the case, only that the bill was trying to separate the tax structure from the private citizens who use their cars to rent out, versus rental car companies who do this as part of regular transactions.

The bill goes to the full Senate.