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Transportation Network Company (Ride Sharing) FAQs

Part AAA of Chapter 59 of the Laws of 2017 added a new Vehicle and Traffic Law (“VTL”) Article 44-B entitled “Transportation Network Company Services” and made amendments to the Insurance Law and other laws to permit ride-sharing in New York State.  Pursuant to Chapter 34 of the Laws of 2017, these amendments to the Vehicle and Traffic Law, Insurance Law, and other laws took effect on June 29, 2017. 

1. Q. What is a transportation network company (“TNC”)?

A. A TNC is a person or entity that is licensed pursuant to VTL Article 44-B and is operating in New York State exclusively using a digital network (usually a smartphone application) to connect passengers to drivers who provide prearranged trips.  Examples of TNCs include UBER and lyft.

2.  Q.  At what point is a driver considered to be using or operating a vehicle as a TNC vehicle under VTL Article 44-B?

A.  A driver is using or operating a vehicle as a TNC vehicle when the driver is logged onto a TNC’s digital network or when the driver is engaged in a prearranged trip.

3.  Q.  When does a prearranged trip begin and end?

A.  A prearranged trip begins when a driver accepts a passenger’s request for a trip through a TNC digital network, continues while the driver transports the requesting passenger in a TNC vehicle, and ends when the last requesting passenger departs from the vehicle.

4. Q. Does VTL Article 44-B apply to livery vehicles, taxicabs, for-hire vehicles, limousines, black cars, or buses?

A. No.  Livery vehicles, taxicabs, for-hire vehicles, limousines, black cars, and buses are excluded from the definition of a TNC vehicle in Article 44-B.  Therefore, these vehicles are not subject to Article 44-B and must comply with all other state and local laws and regulations.

5.  Q.  Does VTL Article 44-B apply to shared expense carpool or vanpool arrangements?

A.  No.  VTL Article 44-B does not apply to shared expense carpool or vanpool arrangements.  Shared expense carpool and vanpool arrangements must comply with all other state and local laws and regulations.

6. Q.  May a driver use or operate a leased or financed vehicle as a TNC vehicle?

A. A driver who leases or finances his or her vehicle should review the terms of the leasing or financing agreement before using or operating his or her vehicle as a TNC vehicle to ensure that doing so will not violate the terms of the leasing or financing agreement.

7. Q. Does VTL Article 44-B apply to all of New York State?

A. No.  VTL Article 44-B does not apply to a prearranged trip originating in New York City.  A vehicle picking up a passenger in New York City, even though a TNC digital network was used, must comply with all other state and New York City laws and regulations.

8.  Q.  Does VTL Article 44-B apply if a TNC driver picks up a passenger outside New York State?

A.  No.  VTL Article 44-B does not apply if a TNC driver picks up a passenger outside New York State.  VTL Article 44-B only applies when a TNC driver picks up a passenger in New York State (but outside New York City).

9. Q.  Does VTL Article 44-B apply if a TNC driver picks up a passenger in New York State (but outside New York City) and drops off the passenger outside New York State?

A.  Yes.  VTL Article 44-B applies if a TNC driver picks up a passenger in New York State (but outside New York City) and drops off the passenger outside New York State. 

10.  Does VTL Article 44-B apply if a TNC driver picks up a passenger in New York State outside of New York City and drops off the passenger in New York City?

A.  Yes.  VTL Article 44-B applies if a TNC driver picks up a passenger in New York State outside New York City and drops off the passenger in New York City.

11. Q. What insurance is required to act as a TNC driver?

A. A TNC driver must always have in force a policy of insurance in satisfaction of the financial responsibility requirements set forth in VTL Article 6, including UM coverage and personal injury protection (no-fault) insurance.  In addition, a TNC driver, or the TNC on the driver’s behalf through a group insurance policy, must maintain insurance that recognizes that the driver is a TNC driver and provides financial responsibility coverage in accordance with VTL Article 44-B while the driver is logged onto the TNC’s digital network and while the driver is engaged in a prearranged trip. 

12.  Q.  What insurance limits does VTL Article 44-B require when a vehicle is being used or operated as a TNC vehicle?

A.  When a driver is logged onto the TNC’s digital network (Period 1), the insurance policy must provide at least $75,000 for bodily injury to or death of one person in any one accident; at least $150,000 for bodily injury to or death of two or more persons in any one accident; and at least $25,000 for injury to or destruction of property of others in any one accident (“75/150/25” coverage).  The policy must also include uninsured motorist (“UM”) insurance, and personal injury protection (“no-fault”) insurance.

When a driver is engaged in a prearranged trip (Period 2), the insurance policy must provide at least $1,250,000 for bodily injury to or death of any person and injury to or destruction of property; supplemental uninsured/underinsured (“SUM”) insurance of $1,250,000 and personal injury protection (“no-fault”) insurance.

13.  Q.  May more than one insurer or policy provide the financial responsibility coverages necessary to satisfy VTL Article 44-B?

A.  Yes.  The financial responsibility coverages required by VTL Article 44-B may be provided to a TNC driver in a single policy or through a combination of multiple policies, including a TNC group policy, which may be issued by more than one insurer.

14.  Q.  Does VTL Article 44-B require that a driver have physical damage coverage when the vehicle is being used or operated as a TNC vehicle?

 A.  No.  VTL Article 44-B does not require that a driver have physical damage coverage covering the driver’s own vehicle when the vehicle is being used or operated as a TNC vehicle.  However, nothing prohibits a driver from purchasing or an insurer from offering physical damage coverage.  In addition, some TNC group policies may provide physical damage coverage for the vehicle under certain circumstances.

15. Q.  Must the TNC group policy be issued by an insurer authorized to do an insurance business in New York State?

A.  A TNC group policy must be issued by an insurer authorized to do an insurance business in New York State unless the insurance is not available from authorized insurers.  In such a case, the group policy may be obtained from an unauthorized insurer through a New York-licensed excess line broker.  The excess line broker must comply with the Insurance Law and regulations promulgated thereunder, including Insurance Law §§ 2105 and 2118 and 11 NYCRR 27 (Insurance Regulation 41).

16.  Q.  What are the consequences if a TNC group policy is issued by an insurer not authorized to do an insurance business in New York State?

A.  The New York Department of Financial Services does not regulate insurers that are not authorized to do an insurance business in New York State.  As a result, these insurers are not subject to all of the Insurance Laws and regulations promulgated thereunder.  They also are not required to file their rates with the Department for prior approval and are not subject to a New York guaranty fund in the event the insurer becomes insolvent or goes out of business and cannot pay claims.

17.  Q.  If the insurer that issued the policy the driver used to register the vehicle also offers coverage for when the driver is using or operating the vehicle as a TNC vehicle, may the insurer offer different liability limits (“split limits”) for the TNC coverages and non-TNC coverages?

A.  Generally, liability policies used to satisfy the financial responsibility requirements under the VTL may not include split limits.  A liability policy must provide the same level of coverage under all circumstances.  However, the new law permits separate liability limits to satisfy the TNC requirements under Period 1 or Period 2 but only to provide for the increased limits necessary to comply with the minimum requirements of VTL Article 44-B.

For example, a “25/50/10” policy is a policy that provides the minimum financial responsibility coverage required under VTL Article 6.  This means that the policy must provide at least $25,000 for bodily injury to and $50,000 for the death of one person in any one accident; at least $50,000 for bodily injury to or $100,000 for death of two or more persons in any one accident; and $10,000 for property damage in any one accident.  If a driver purchased additional coverage for Period 1 to satisfy VTL Article 44-B, then the policy may be endorsed with 75/150/25 coverage, which would apply only for Period 1 TNC operations.

However, if the driver had purchased higher coverage, such as 100/300/25 coverage, then the insurer may not limit the TNC Period 1 coverage to only 75/150/25 coverage.   The driver must be provided the full 100/300/25 limits for all coverages.

18.  Q.  If a driver purchases a separate commercial multi-vehicle insurance policy that satisfies the financial responsibility requirements of VTL Article 44-B, then may the policy provide different liability limits for the vehicles covered under the policy?

A.  No.  If a driver purchases a separate commercial multi-vehicle insurance policy that satisfies the financial responsibility requirements of VTL Article 44-B, then the policy may not provide different liability limits for the vehicles covered under the policy.  All vehicles covered under the policy must have the same liability limits.

19.  Q. Is every TNC required to maintain a group policy that covers vehicles being used or operated as TNC vehicles in New York State?

A. Yes.  VTL Article 44-B requires a TNC to maintain at all times a group policy that covers vehicles using its digital network to operate as TNC vehicles in New York State, even if the TNC driver has other insurance that satisfies the requirements of Article 44-B.

20.  Q.  What proof of TNC insurance coverage must a driver carry while participating in a TNC program?

A.  A driver participating in a TNC program must carry proof of coverage satisfying VTL Article 44-B at all times while participating in a TNC program.  The proof of coverage must be in the form prescribed by the Commissioner of Motor Vehicles.  This is in addition to the proof of coverage necessary to satisfy VTL Article 6.  Whenever the law requires a driver to produce an insurance identification card, a driver must produce the insurance identification card issued to the driver when the driver registered the vehicle and, if the driver was logged onto a TNC’s digital network or engaged in a TNC prearranged trip, then the driver also must produce the insurance identification card required by VTL Article 44-B.

21. Q. Who is responsible for an insurance claim if the insurance the TNC driver purchased to use or operate the driver’s vehicle as a TNC vehicle lapses or does not provide the financial responsibility coverages required by VTL Article 44-B?

A.  If the insurance the TNC driver purchased to use or operate the driver’s vehicle as a TNC vehicle lapses or does not provide the financial responsibility coverages required by VTL Article 44-B, then the TNC’s group policy must provide the coverage required by VTL Article 44-B, beginning with the first dollar of a claim.  The insurer that issued the TNC group policy also has a duty to defend the claim.

22.  Q.  Is coverage under the TNC group policy dependent upon the denial of an insurance claim by the insurer that issued the insurance policy the driver used to register the vehicle?

A.  No.  Coverage under the TNC group policy is not dependent upon the denial of a claim by the insurer that issued the insurance policy the driver used to register the vehicle.

23. Q. May the insurance policy the driver used to register his or her vehicle exclude coverage when the driver is logged onto a TNC’s digital network or while a driver provides a TNC prearranged trip?

A. Yes.  The insurance policy the driver used to register his or her vehicle may exclude coverage, including personal injury protection (no-fault) insurance, when the driver is logged onto a TNC’s digital network and while a driver provides a TNC prearranged trip, provided that the policy contains such an exclusion. A driver should review his or her policy to ascertain whether it may provide coverage when the vehicle is being used as a TNC vehicle.

24.  Q. May the insurer that issued the insurance policy that the driver used to register his or her vehicle cancel the policy solely on the basis that the vehicle is being made available as a TNC vehicle?

A.  No.  The insurer that issued the insurance policy the driver used to register his or her vehicle may not cancel the policy solely on the basis that the vehicle is being made available as a TNC vehicle.  However, the insurer may non-renew the policy at the end of the annual policy term or increase the driver’s insurance premiums in accordance with its underwriting and rating rules.

25.  Q. May an insurer add a surcharge to the premium for the insurance policy the driver used to register his or her vehicle if the driver gets in an accident while using or operating the driver’s vehicle as a TNC vehicle?

A.  An insurer may not surcharge the insured under the insurance policy that the driver used to register his or her vehicle if the driver gets in an accident while using or operating the driver’s vehicle as a TNC vehicle unless the accident results in a conviction for a moving traffic violation.  However, if the policy also provides the financial responsibility coverages required by VTL Article 44-B, then the premium associated with the Article 44-B coverage may be surcharged pursuant to the insurer’s approved rating rules.

26.  Q.  May a driver’s umbrella policy exclude coverage for an accident that occurs while the driver is using or operating the driver’s vehicle as a TNC vehicle?

A.  Yes.  A driver’s umbrella policy may exclude coverage for an accident that occurs while the driver is using or operating the driver’s vehicle as a TNC vehicle.

27.  Q.  Is a driver entitled to workers’ compensation benefits if the driver is injured while using or operating the driver’s vehicle as a TNC vehicle?

A. A driver who was engaged in a prearranged trip, and a driver who was logged onto a TNC digital network and was not engaged in a prearranged trip but was engaged in an activity reasonably related to driving as a TNC driver taking into consideration the time, place and manner of such activity, at the time of the injury, is entitled to workers’ compensation benefits through the New York Black Car Operators’ Injury Compensation Fund, Inc.

28.  Q. Which insurance policy must provide coverage if the driver was logged into more than one TNC digital network at the time of an accident?

A. The insurer that is the first insurer to receive the claim must provide the personal injury protection (no-fault insurance) benefits.  The insurer may then seek reimbursement from other insurers if appropriate.  If there is a dispute as to whether a driver was using or operating a vehicle as a TNC vehicle, then the TNC group policy must provide the personal injury protection (no-fault insurance) benefits.  With regard to a liability claim, the language of the relevant policies will dictate which policies will provide coverage and how much.

29.  Q.  May a TNC group policy include a liability deductible or retained limit?

A.  No.  A TNC group policy may not include a liability deductible or retained limit.

Updated 07/17/2018

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