In a controversial decision, the New York City Council has approved legislation that limits the Taxi and Limousine Commission (TLC) from mandating more than 200 percent of the no-fault insurance required under New York State law for TLC-licensed vehicles. This translates to a reduction in required insurance coverage for these vehicles from $200,000 to $100,000, given that the state minimum stands at $50,000. The legislation marks a departure from previous requirements and represents a partial victory for rideshare company Uber, which had advocated for reducing the coverage requirement to just the state minimum of $50,000.
The New York Taxi Workers Alliance (NYTWA), an organization representing thousands of drivers across various segments of the for-hire industry, stood alone in publicly opposing the bill. The union pushed back against what it sees as a dangerous rollback of crucial protections for drivers, particularly in light of the industry’s current vulnerabilities and lack of consistent access to Workers’ Compensation.
Reacting to the Council’s decision, NYTWA Executive Director Bhairavi Desai released a strongly worded statement criticizing the vote and the process behind it. “Disappointing news from City Council: they fast-tracked an Uber-lobbied bill to lower no fault insurance coverage for TLC drivers – and meanwhile keep stalling a bill to end unfair deactivations and lift up drivers with real job security,” she said.
The reduction in coverage from $200,000 to $100,000 came as a compromise, with NYTWA’s lobbying efforts helping to prevent a more drastic drop to the state minimum level. Desai pointed out that had Uber’s full proposal been adopted, it would have slashed driver coverage by $150,000. She argued that the savings promoted by Uber were minimal when weighed against the protections drivers would lose. “We couldn’t stop the cut altogether, but we did block Uber from gutting the coverage to $50,000,” she stated.
According to Desai, the drivers who work in the livery sector are only eligible for Workers’ Compensation when they are victims of a crime, and yellow cab owner-drivers have no access to Workers’ Comp at all. This makes no-fault insurance the only safety net in case of injuries for many drivers, including those who lease yellow cabs or drive for Uber and Lyft. If Workers’ Compensation claims are denied or coverage limits are reached, no-fault insurance becomes their last resort.
Desai emphasized the critical role that no-fault insurance plays in protecting these drivers. She said, “Livery drivers are only covered by Workers Compensation when victim of a crime and yellow cab owner-drivers have no Workers Comp at all, so both workforces rely solely on no fault in case of injury, as would Uber/Lyft and yellow cab lease drivers if their Workers Comp is contested or maxed out.”
The bill’s supporters, particularly Uber, argued that reducing insurance coverage would help lower the number of fraudulent insurance claims in which the company is named as a third party. They also suggested that the move could reduce premiums, albeit modestly. However, Desai countered that there was no guarantee the reduction would actually result in lower premium costs for drivers. In fact, she suggested that insurance companies might instead increase liability premiums, nullifying any potential savings.
She called the proposal shortsighted and criticized the notion that a $50 monthly premium reduction – assuming it even materializes – justified exposing drivers to significantly more financial risk. “Uber and its agents argued for drivers to lose $150,000 in coverage to save a measly $50 a month in premium – and even then, with no guarantees that insurance companies won’t just absorb the savings with higher premiums for liability,” Desai said.
She further accused Uber of using drivers as test subjects in an unproven theory that cutting insurance coverage would somehow curb fraud. “So drivers were asked to sacrifice security – all so Uber – which doesn’t even pay for the premium – could test out a theory that lower coverage will reduce fraudulent claims where Uber is named as a third-party,” she remarked.
Desai also highlighted broader structural issues in the for-hire vehicle insurance market. She pointed to the ongoing financial instability in the FHV and taxi insurance sectors and called for systemic reforms rather than piecemeal sacrifices from drivers already operating under precarious conditions. “The insolvency of the FHV/Taxi insurance market and fraudulent claims are serious issues and need new approaches – not more sacrifice by drivers exploited by the system and now at risk from its bankruptcy,” she stated.
Adding to her frustration was the City Council’s failure to act on another piece of legislation – Intro 276 – which would address unfair deactivations of Uber and Lyft drivers. These deactivations can leave drivers without income and unable to cover their ongoing expenses, such as insurance and car loan payments. According to Desai, the lack of progress on this front only compounds the hardship drivers now face with reduced insurance protections.
“Meanwhile, a bill that would give Uber and Lyft drivers security against unfair deactivations – leaving them with no income to pay for the car loan and insurance – is sitting on some corner City Council desk gathering dust,” she said. She also noted the suspicious timing of the Council’s decision, which took place right before the city’s primary elections. “Oh and it’s hard to miss that the vote – and non-vote – all happened just before primary day,” Desai added.
Calling on the Council to prioritize the needs of working-class New Yorkers, she urged lawmakers to pass the long-delayed Intro 276 bill. “If the Council cares about working class New Yorkers, it needs to pass Intro 276 and stop unfair Uber and Lyft deactivations, especially after leaving drivers with even less financial security,” she concluded.
The passing of this bill has sparked a deeper conversation around the balance between cost efficiency for rideshare platforms and the safety nets necessary for the thousands of drivers who keep the industry moving. For now, while the reduction to $100,000 is less severe than the $50,000 Uber had hoped for, it nonetheless represents a step back in coverage – and the drivers who depend on that protection are making it clear they feel abandoned.