Independent taxi owners and drivers who have survived the arrival of ride-sharing apps such as Uber and Lyft say a surprise increase in their insurance requirements by the state could push many of them out of business.
Gov. Roy Cooper signed the new requirements into law in late July, doubling the amount of liability insurance for property and as much as quintupling the insurance for bodily injury or death. Owners of cabs must carry the new insurance starting Oct. 1.
Driver Imad Faik of Raleigh manages nine taxis for two different companies and says the new requirements will more than double the insurance costs per vehicle to nearly $400 a month. “I think this is horrible,” he said.
Faik was one of about 75 taxi owners and drivers who met with city taxi regulators at a police substation in West Raleigh on Tuesday morning. The meeting, held each year to talk about new rules and regulations, was consumed with concern over what the new insurance requirements will mean for an industry already reeling from competition from ride-sharing companies, which don’t face the same regulations.
Sign Up and Save
Get six months of free digital access to The Herald Sun
Owners and drivers say they didn’t learn about the new insurance requirements until recent weeks. City taxi inspector Lorenzo Milliam said he first heard about them through an anonymous phone call on Sept. 6 and began emailing owners. Milliam said even the insurance companies weren’t aware of them.
He told the crowd that he could do nothing but enforce the new requirements. “If you have concerns about it, contact your elected officials,” he said.
The elected officials who are likely to hear from the cab owners first will be members of the Raleigh City Council, which sets the rates taxis can charge.
“If they’re going to increase the insurance like this, why would they not increase the rate on the meter?” Faik said. “It’s just not fair.”
There are already far fewer cabs on the road in Raleigh than there were a few years ago. In 2013, the year the General Assembly blocked cities and counties from regulating Uber and Lyft, there were 745 permitted taxis in the city operated by 112 companies, according to city records. By this spring, there were only 342 taxis run by 65 companies.
Owners and drivers are particularly angry that the legislature would increase the insurance requirements without their knowledge. Senate Majority Leader Harry Brown, an auto dealer in Jacksonville, introduced the requirements as an amendment to an unrelated House bill on the floor of the Senate in late June, and within two days, it had passed both chambers and was on its way to the governor.
“We had no input, no knowledge,” says Lee Churchill, who has driven a taxi in Raleigh since 1974. “The legislature didn’t notify anybody, not even the cab inspectors.”
Brown says he wrote the amendment himself after researching the requirements, which he says had not been updated since the 1970s. The old liability requirements were the same as the minimum required for any motorist in North Carolina: $30,000 for bodily injury or death; $60,000 for bodily injury or death of two or more people; and $25,000 for property. The new requirements for cabs of $100,000, $300,000 and $50,000 are in line with what many drivers carry, Brown said.
“You would think that someone having a vehicle for hire should have higher coverage than an average citizen out there,” he said. “I didn’t have a single legislator say they didn’t think that was more than fair.”
Before Tuesday’s meeting, Churchill handed out copies of the bill along with a list of 13 insurance companies and their phones numbers to help owners and drivers research rates. Alan Wilson, who has been driving a taxi in Raleigh for a decade, said he has provided some paperwork to his insurance company and is awaiting a quote.
“I had a large student base; they all left me for Uber,” Wilson said. “This might put me out.”