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Regulating Peer-to-Peer Car Sharing Businesses Across the U.S.

Over the shoulder shot of a man driving his car rental

One enterprise that has been popping up across the United States is peer-to-peer car sharing. This is when ordinary people rent out their personal vehicles for other people to drive for a duration of time. As this form of car-sharing becomes more prominent in our society, it’s no surprise that the government is trying to create regulations for it. By using the Agenda Discovery legislative tracking tool, users can stay current with the policies impacting the car-sharing industry.

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Regulations of the The Peer-to-Peer Car Sharing Program Model Act

Last year, the National Conference of Insurance Legislators (NCOIL) released a proposal that would regulate the peer-to-peer car sharing industry. As of December 2019, thirty-four states have already passed legislation that addresses issues such as taxing transactions and solidifying appropriate insurance coverage. Many personal auto policies exclude renting or car sharing from their coverages. In other words, when someone rents out their vehicle to another person, any liability that arises would likely not be covered under the car owner’s auto insurance.

NCOIL’s proposal seeks to provide clarity as to what the insurance requirements will be for the three parties involved: (1) the vehicle owner, (2) the renter, (3) the peer-to-peer vehicle sharing program. Under NCOIL’s proposal, the financial responsibility must be maintained by each party through each of their insurance policies.

Under the proposed law, peer-to-peer car sharing programs are mandated to make sure adequate financial responsibility is provided in an amount that is not less than the state’s minimum coverage. The bill also calls for a change in language that ensures the coverage recognizes that the vehicle is shared through a peer-to-peer car sharing program, or the coverage does not exclude the use of a shared vehicle by a shared driver.

How Will This Proposal Impact Peer-to-Peer Car Sharing

Proponents of the bill argue these programs are essentially car rental companies and should be regulated in the same manner. 

“If you are renting a car for profit to a member of the public, you are a car rental company,” Greg Scott, the government relations representative for the American Car Rental Association (ACRA) explains. “If a peer-to-peer company is in the car rental business, they must abide by the safety, insurance, and tax laws that Federal and State legislators and regulators have adopted to regulate car rental companies.”   That’s exactly what the proposal calls for; equal accountability for both industries

However, the issue peer-to-peer companies primarily have with the bill is how one sided it is. While it seems like a fairly reasonable requirement to ask of a car rental program, one of the provisions of the bill doesn’t limit their liability. According to Peacock, a peer-to-peer car sharing company, the law places three times the liability requirements on their industry than they do traditional car rental companies. As a result, many peer-to-peer programs have said they would cease operations in specific states that pass a bill of this nature. 

Keep Up With Peer-to-Peer Car Sharing Regulations

With thirty-four states and counting pushing regulations that will affect the car-sharing industry, it’s important to keep up with policies that could have a major impact on your business. No matter what industry you are in, adopting the Agenda Discovery legislative tracker as a resource will ensure you are up-to-date on the latest news and policies that matter to you. Request a demo today to stay informed.


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