Unveiling AB 2743: Ensuring the Future of Peer-to-Peer Car Sharing in California
Published Date: 07/31/2024
Unveiling AB 2743: How Assemblymember Blanca Pacheco’s Bill Protects California’s Peer-to-Peer Car Sharing Future
California’s relationship with innovation has always been a complicated one. The state that birthed Silicon Valley and the gig economy is also home to some of the nation’s toughest regulations — often creating tension between new ideas and old frameworks. One of the most recent examples of this is peer-to-peer car sharing, a booming model that lets everyday Californians rent out their personal vehicles to others through mobile platforms like Turo and Getaround.
But a new law scheduled to take effect in January 2025 could have unintentionally crushed this emerging industry under the weight of steep insurance requirements. Recognizing the problem, Assemblymember Blanca Pacheco (D–Downey) introduced Assembly Bill 2743, designed to protect consumers, encourage innovation, and ensure California remains a leader in the sharing economy.
Her appearance on Insurance Hour with host Karl Susman provided rare insight into how this legislation came to be — and why it matters for both small business owners and consumers statewide.
What Is Peer-to-Peer Car Sharing?
Pacheco began the conversation by answering a simple but important question: what exactly is peer-to-peer car sharing?
“It’s the ability to rent out your vehicle — your personal car — and allow someone else to utilize that vehicle when you’re not using it,” she explained.
Think of it as Airbnb for cars. Instead of renting a vehicle from a traditional fleet operator like Hertz or Enterprise, you rent directly from another individual who lists their personal car on an app.
“If you have a BMW, if you have a Tesla, you can rent it out,” Pacheco said. “And if you don’t — you can rent one!”
Apps like Turo and Getaround handle the logistics: matching owners and renters, managing payment, and providing short-term insurance coverage during the rental period.
How the Process Works
Susman, ever the practical thinker, asked Pacheco to describe how the process actually works for users.
“You open the app, search for vehicles in your area — like Downey, in my case — and you pick the car and the dates you want to rent,” she explained. “Then you follow instructions from the owner about where to find the keys and drop the car off when you’re done.”
It’s a seamless, smartphone-driven experience. Some owners leave keys in lockboxes, while others meet renters in person. Rentals can last from a few hours to a few days, depending on the listing.
“It’s really easy,” Pacheco said. “You can search for specific vehicles, choose your time, and voila — you can rent a vehicle.”
The Unintended Problem: Soaring Insurance Requirements
As Pacheco explained, everything was running smoothly — until a technical change in state law threatened to derail the entire industry.
A prior piece of legislation (authored by Senator Bill Dodd) inadvertently caused financial responsibility requirements for peer-to-peer car-sharing platforms to skyrocket.
“Right now, the limits are two times the usage compared to a personal car,” Pacheco said. “And starting January 1, 2025, we’re going to see an even more increase when it comes to peer-to-peer car sharing.”
That means that by 2025, the platforms facilitating these rentals would be required to carry liability limits up to three times higher than personal auto insurance policies — far above what most small operators can afford.
To make matters worse, California already requires higher limits than 43 other states and D.C.
“This was never the intent of the original bill,” Pacheco said. “Even Senator Dodd, the author of that law, acknowledged that it was an unintended consequence — and he’s now supporting my bill to fix it.”
Breaking Down “Financial Responsibility”
When Pacheco refers to “financial responsibility limits,” she’s talking about mandatory insurance coverage levels — the minimum amount of liability protection that a business or platform must maintain in case of an accident.
In traditional car rentals, large companies maintain these policies as part of their fleet operations. But for peer-to-peer platforms, which rely on thousands of individual owners, the insurance model is layered and more complex.
“The car owner has their own insurance,” Pacheco said. “Then, when they list their vehicle on an app, that app provides an additional layer of insurance during the rental period.”
So, if you rent out your personal car, your own insurance still covers your normal driving — but the platform provides coverage while someone else is behind the wheel.
That makes sense — until regulators start demanding that those platform-provided policies carry excessive limits, effectively turning small operators into major fleet insurers.
“We want to prevent that unintended consequence,” Pacheco said. “Our goal is to stabilize the financial limits for peer-to-peer car sharing so this type of business can stay in California.”
Why It Matters
AB 2743 may sound like a technical correction, but its impact could be significant. Without it, the sudden jump in insurance requirements could drive companies like Turo and Getaround out of California entirely — taking thousands of local car owners’ income opportunities with them.
“We want this type of business to remain here in the state,” Pacheco emphasized. “That’s what’s very important.”
The bill doesn’t seek to remove safety protections — it simply ensures that financial responsibility limits remain reasonable and competitive with national standards.
In other words, it preserves access for consumers, keeps small entrepreneurs in business, and maintains California’s reputation as an innovation-friendly state.
The Broader Picture: Regulating the New Sharing Economy
Susman noted that this debate over peer-to-peer car sharing reflects a broader challenge: how governments adapt to the sharing economy, where technology platforms connect individuals in ways that traditional laws never anticipated.
“We’ve seen it with Uber, Lyft, and Airbnb,” he said. “Every time a new model comes along, it pushes against outdated regulations.”
Peer-to-peer car sharing sits in that same legal gray zone — not quite a rental car company, not quite a private owner. That ambiguity makes it vulnerable to overregulation.
Pacheco’s bill, then, is more than a niche fix. It’s a case study in modern policymaking — how lawmakers can respond quickly to evolving business models without stifling innovation.
“We can’t ignore how people live and work today,” she said. “We have to make sure our laws reflect current realities.”
Balancing Innovation and Responsibility
Critics sometimes argue that peer-to-peer models allow companies to avoid regulation. But Pacheco’s approach strikes a balance — ensuring that platforms still carry adequate insurance while keeping requirements affordable and realistic.
“We’re not trying to get rid of oversight,” she said. “We just want to make sure it’s fair.”
That fairness, she added, extends to consumers, who benefit from lower prices and greater access to transportation. For residents who can’t afford traditional car rentals or full-time car ownership, peer-to-peer sharing offers flexibility — and a chance to participate in the new mobility economy.
“We want to encourage people to use these services,” she said. “They’re safe, they’re convenient, and they help reduce costs for everyone involved.”
Collaboration Across the Aisle
One of the most refreshing parts of the discussion was the bipartisan cooperation behind AB 2743. Senator Dodd — the author of the earlier legislation that unintentionally caused the insurance spike — has publicly supported Pacheco’s corrective bill.
“It’s encouraging to see legislators working together to fix unintended problems,” Susman noted.
In an era when political divisions often stall meaningful reform, this kind of collaboration offers hope that practical, consumer-centered policymaking can still thrive in Sacramento.
The Consumer’s Perspective: Simplicity, Not Confusion
Susman played the role of every curious Californian as he asked detailed questions about how car-sharing insurance actually works.
“So, the person has insurance on their car, and then they’re going to put that car out to be borrowed,” he said. “Then the company adds another layer of insurance — is that right?”
“That’s correct,” Pacheco confirmed.
While the system is straightforward for users, the regulatory burden behind the scenes can be complex. If left unchecked, excessive insurance mandates could cause costs to rise — ultimately passing those expenses on to consumers.
AB 2743 aims to prevent that chain reaction by keeping requirements at a sustainable level.
California’s Opportunity to Lead — Again
California’s identity as a hub of innovation is at stake in debates like this one. Pacheco’s bill reminds us that being “pro-innovation” doesn’t mean abandoning oversight; it means ensuring that regulations are smart, proportionate, and responsive to real-world conditions.
“We want to make sure that innovation stays here,” Pacheco said. “That people have options, and that small businesses can succeed.”
By taking a practical, corrective approach rather than a sweeping overhaul, AB 2743 positions California to remain competitive while protecting both consumers and entrepreneurs.
Final Thoughts: Protecting Fairness and the Future
As Susman wrapped up the episode, he praised Pacheco for bringing clarity to an issue that blends insurance, technology, and entrepreneurship.
“It’s an exciting space,” he said. “And you’re right — this isn’t about deregulation or overregulation. It’s about balance.”
That word — balance — perfectly captures what AB 2743 represents. It’s about balancing innovation with responsibility, statewide policy with local opportunity, and consumer protection with business viability.
By keeping financial responsibility requirements aligned with national norms, the bill ensures that peer-to-peer car sharing remains a viable part of California’s mobility ecosystem.
“We’re fixing something before it becomes a bigger problem,” Pacheco concluded. “That’s what good legislation is supposed to do.”
Key Takeaways
- AB 2743 addresses unintended insurance cost increases for peer-to-peer car-sharing companies.
- Without reform, new 2025 limits could make platforms like Turo and Getaround unsustainable in California.
- The bill stabilizes financial responsibility standards to keep innovation and affordability in balance.
- It highlights bipartisan cooperation and responsiveness in Sacramento.
- Ultimately, it protects consumers, small business owners, and the future of California’s sharing economy.
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