Talk of insurance and taxes dominated discussions about the Legislature’s first step toward regulating peer-to-peer car-sharing services on Thursday.
The Senate Commerce Committee took testimony on a bill sponsored by Sen. Joe Cryan (D-Union) that would require companies that administer peer-to-peer car sharing to carry insurance liability for vehicles rented through their platform.
Car sharing companies allow vehicle owners to rent out their cars to others when they are not in use. These companies — which the bill distinguishes from rental car companies — already operate in New Jersey, although the lack of regulation means it’s often unclear whose insurance is at risk after a crash.
“It’s the wild, wild west now. You are suing everyone and the carriers are in denial. Where does the injured person go?” said Sen. John Bramnick (R-Union).
Although the measure would ensure that someone — the car owner, its driver or the car-sharing company — has insurance, there was disagreement over whether the coverage required under the bill would be enough.
“Since most traditional auto insurance policies will not cover a car driven using a peer-to-peer service, the peer-to-peer company should always be the primary insurance during the time 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 carry only liability, personal injury and underinsured and uninsured motorist coverage up to state minimum limits. Lawmakers have tried to raise some of those restrictions in recent months, including successful push which will raise minimums for bodily injury liability coverage next year and again in 2026.
Lynch asked that car-sharing companies be required to carry at least $1.5 million in liability coverage, the same coverage required of ride-sharing services like Lyft and Uber. Kenny Montilla, a lobbyist for the car-sharing firm Turo, noted that the bill would prohibit cars rented through a car-sharing service from being used as taxis or other vehicles for hire.
“To talk about what we like about this bill, it ensures that there is no gap in coverage, so regardless of which party tries to sue, there is coverage that is provided by the driver of the shared vehicle, the owner of the shared vehicle or platform in the event that either party is uninsured or underinsured,” Montilla said.
Bramnick did not approve of the $1.5 million cap, but argued that car-sharing companies should be required to provide more than minimum liability coverage.
Montilla said rental car companies are subject to the same restriction, adding that car-sharing companies offer protection plans that provide additional coverage.
Rental companies that compete directly with car-sharing firms have said their competitors should pay the same fees and taxes levied on rental cars because they offer the same service — even if the car-sharing companies try to claim they don’t.
“I know you’ve probably heard, and maybe you’ll hear in future testimony, that affiliate companies don’t rent cars,” said Dean Thompson, vice president of finance at Enterprise Rent-A-Car. “I encourage you to Google and look at their Google ads. You will see the “perfect rental car”. You will see “instant hire”.
New Jersey rentals are charged a $5 daily Homeland Security fee in addition to sales tax charges. Car-sharing companies pay sales tax, but not the toll. They are also exempt from airport access fees and local rental car taxes charged in Newark and Elizabeth, Thompson said.
Lawmakers may find expanding fees and taxes on car-sharing companies a tough pill to swallow. Car rentals tend to be more expensive than carpools, and the added cost can make the newer service less affordable for low-income residents.
“I recently traveled out of state and had to rent a car for five days. I used one of the noted companies that are here. The price for five days was $750, and it wasn’t a super luxury car,” said Sen. Bob Singer (R-Ocean), co-author of the bill, who added, “To make it affordable for young people, to make it affordable for people who starting or struggling – in these financial times it is so critical.”
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