Uber, Lyft facing insurance crackdown in Arizona

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By Brad Denny By Brad Denny
By Brad Denny By Brad Denny
By Brad Denny By Brad Denny

PHOENIX -- It's convenient, but using a ride-sharing company could cost you.

Several states, including Arizona, are trying to pump the brakes on this new trend. 

A lot of people use Uber or Lyft because they're cheaper than regular taxis, and a lot of those companies' drivers use their personal vehicles to pick up some extra cash.

The state is now cracking down on the popular rideshare companies, and has a warning for anyone driving for Uber or Lyft that they could get hit in the pocketbook.

"Are the civil penalties hefty? Yeah, you bet," said Shawn Marquez with the Arizona Department of Weights and Measures. "A $2,500 to $2,700 (fine) per stop." 

Marquez's agency has been fining a lot of drivers this year as they crack down on the popular rideshare companies.

"You're hauling human beings around," Marquez said. "You're not hauling pumpkins." 

Uber and Lyft have been popular for both its customers and for drivers looking to pick up full-time work or some extra cash on the side. However, Marquez says there's a reason they are targeting the firms.

"We are doing this because it is a matter of public safety," he said.

Many of their drivers operate with only their personal insurance and not a more comprehensive—and costly—commercial insurance policy. Marquez says that puts rideshare customers at risk.

"God forbid you get in a wreck or somebody else hits you," said Marquez. "Your insurance company is going to find out you were transporting people, and you're going to have your insurance canceled. Everyone's on the hook at that point."

This year the state has cited dozens of drivers, busting them either through customer complaints or undercover stings.

According to state records, 61 drivers have been cited this year with $2,700 fines. In total, the state has doled out roughly $160,000 in penalities.

"A lot of things are popular around here, but you still have to have a license for them," said Marquez. "That's the name of the game."

Representatives from Uber were not available for an on-camera interview, but they did send a statement to 3TV that they stand behind their driving partners and will fight any unjust citations.