HomeMy Public PortalAbout09) 10A Acceptability of Limited Insurance and Indemnity Policy Proposed by Lyft, Inc.AGENDA
ITEM 10.A .
COMMUNITY DEVELOPMENT DEPARTMENT
DATE:
TO:
FROM:
MEMORANDUM
September 3, 2019
The Honorabl e City Council
Bryan Cook, C ity Manage r
Via: Michael D. Forbes , Community Development Director
By : Ash le y Avery, Management Ana lyst
SUBJECT: ACCEPTABILITY OF LIMITED INSURANCE AND INDEMNITY POLICY
PROPOSED BY L YFT, INC. IN THE RIDESHARE PARTNERSHIP
AGREEMENT BETWEEN L YFT, INC . AND TEMPLE CITY
RECOMMENDATION:
The City Council is requested to provide direction to staff regarding the acceptability of
indemnification lang ua ge proposed by Lyft in the Rideshare Partnership Agreement with
Temple City .
BACKGROUND:
1. On July 17 , 2018, City Council gave staff direction to move forward with a Rideshare
Partners hip Agreement with Lyft. Thi s agreement would all ow riders to pay re duced
fares for Lyft, as the City wou ld s ub sidize the cost of standard Lyft rides taken within
th e City 's predetermined service area .
2 . In September of 2018 , staff began working with Lyft to negotiate the terms and
conditions of a Ridesha re Partnership Agreement.
ANALYSIS:
Temple City genera lly requires that contractors maintain a m inimum level of insurance.
Contractors carrying commercial and/or automobile liability insurance must add the City
and its respective officials , employees , and volunteers as additional insureds . The City
also requires contractors to indemnify and defend the City against claims arising from the
con tractor's performance .
City Council
Sept ember 3, 20 19
Pag e 2 of 2
W hil e negotiat in g th e contract terms for the Rideshare Partnership , the City and Lyft have
been unable to reach an agreement regarding indem nifica t ion fo r cla ims or losses . Lyft
carri es a specialized $1,000 ,000 insura nce policy for every ride that is undertaken through
its programs but will not indemnify th e City for any losses or claims in excess of that policy
arising from rid es in the prop osed program . Lyft is only offering indemnity for a breach of
co ntra ct , violation of re presentatio ns and warranties , int ellectu al prope rty allegations , or
legal violations by Lyft . This pos iti on by Lyft does no t meet t he City 's standard
req uirements f or ind emnifi cation and will require th e City to take on more risk than it
us ually accepts in most contractual ag re ements .
Ci ty staff contacted its representative at t he California Joint Powers Insurance Authority
(C JPIA) to discuss Lyft's l imited indemnity po l icy. CJ PI A informed staff that if the City
were t o enter into t his agreement with Lyft as it is currently proposed any claims would
still be covered und e r th e current Memorandum of Coverage . However, any losses that
a re incurred that exceed Lyft's $1 ,000 ,00 0 policy co uld result in CJPIA payouts that would
lead to premium adjustments per occu rre nce for the C ity in the future .
If City Cou ncil decides that Lyft's lim ited ind emnity policy exposes the City to a leve l of
risk acce ptabl e to the City Counci l, th e n a final draft of the agreeme nt can be bro ught
back to City Counc il for approval at a future meeting.
CITY STRATEGIC GOALS:
Determining the acce ptabi l ity of Lyft 's lim ited indem nity policy and the level of risk it
exposes the City to is consistent with th e C ity St rateg ic Goal of Good Governance .
FISCAL IMPACT:
Th e fiscal impact of accepting Lyft 's limited indem nity policy can not be determ i ned . Any
ad ju stme nt in insurance premiums are dependent upon whether an event, that is not
co ve red by Lyft 's insurance policy , occ urs and then if that event results in a loss to the City .
ATTACHMENTS:
A. None