Dan Robinson
EF5
This might have some relevance to small-time storm chase tour operators. There are a couple of startup companies - Lyft and Uber - that have launched a sort of "crowdsourced" ride service to compete with taxis. There's a major controversy in progress. Authorities and taxi drivers are crying foul because the Lyft/Uber drivers are soliciting "passenger for hire" services using their personal vehicles on a personal insurance policy, which is (by the book at least) illegal. Some cities are fining the drivers as much as $1,300 each. Here in St. Louis, a judge has just ordered the service shut down in the city limits.
You can see the point of the taxi side. They have to pay for the commercial passenger-for-hire insurance policies (which can run as much as $10,000 per vehicle) as well as comply with all of the DOT regulations (vehicle maintenance, hours-of-service limits, etc). The Lyft drivers don't have those costs, and can offer the same service as a taxi for much less. Proponents of the crowdsourced ride services cite the lower fares that will benefit the community. The critics point out that the personal vehicles aren't 'legal' and are not insured in the event of accidents.
There are a lot of parallels in this story with the issue of using a personal vehicle to offer storm chasing tours. I once considered doing this, but I discovered the costs of insurance, compliance with regulations and associated permitting and red tape would make it too expensive. Not to mention a paperwork nightmare. With the capacity for only 2 or 3 guests in a car or SUV, it would be virtually impossible to break even on costs without charging guests exorbitant rates. The solution is to buy a large van and book it full each season to maximize capacity/revenue, which is why you see that with all of the tours that are operating legally. But, I decided that was too much of a financial/business commitment for me to make.
The biggest issue with running a chase tour is insurance coverage. Though the Lyft drivers are getting fined, the authorities likely will not raid a chase tour operator who doesn't have a DOT number or a commercial policy. But that operator will be in serious trouble if an accident occurs and his guests are hurt. That could be a storm-related incident or just a car accident on the road. In the Lyft story I see a lot of misinformed people saying that the personal policies will be enough - that would be nice, but they wont! Insurance companies have the right to deny coverage (and they certainly will) if the operator does not have a commercial policy. In fact, they can pursue insurance fraud charges for someone who tries to claim an incident this way on a personal policy. The Lyft/Uber drivers seem to be skirting the regulations by calling the payments donations instead of fares - but that's a semantic argument that may not help the driver in the case of an insurance claim. The driver will be at the mercy of the insurance company if he/she has an accident with just a personal policy.
The crowdsourced ride service controversy may eventually be battled out in the courts. Who knows - if the Lyft/Uber side of the issue wins, the legal requirements for a personal-vehicle-based chase tour service may become easier logistically. However, even if that happens, the insurance companies won't be obligated to provide commercial-grade coverage on a personal policy. In the end, they hold all the keys to what the premiums will be. Those premiums are the single biggest cost factor of whether a personal-vehicle chase tour service will be economically feasible.
You can see the point of the taxi side. They have to pay for the commercial passenger-for-hire insurance policies (which can run as much as $10,000 per vehicle) as well as comply with all of the DOT regulations (vehicle maintenance, hours-of-service limits, etc). The Lyft drivers don't have those costs, and can offer the same service as a taxi for much less. Proponents of the crowdsourced ride services cite the lower fares that will benefit the community. The critics point out that the personal vehicles aren't 'legal' and are not insured in the event of accidents.
There are a lot of parallels in this story with the issue of using a personal vehicle to offer storm chasing tours. I once considered doing this, but I discovered the costs of insurance, compliance with regulations and associated permitting and red tape would make it too expensive. Not to mention a paperwork nightmare. With the capacity for only 2 or 3 guests in a car or SUV, it would be virtually impossible to break even on costs without charging guests exorbitant rates. The solution is to buy a large van and book it full each season to maximize capacity/revenue, which is why you see that with all of the tours that are operating legally. But, I decided that was too much of a financial/business commitment for me to make.
The biggest issue with running a chase tour is insurance coverage. Though the Lyft drivers are getting fined, the authorities likely will not raid a chase tour operator who doesn't have a DOT number or a commercial policy. But that operator will be in serious trouble if an accident occurs and his guests are hurt. That could be a storm-related incident or just a car accident on the road. In the Lyft story I see a lot of misinformed people saying that the personal policies will be enough - that would be nice, but they wont! Insurance companies have the right to deny coverage (and they certainly will) if the operator does not have a commercial policy. In fact, they can pursue insurance fraud charges for someone who tries to claim an incident this way on a personal policy. The Lyft/Uber drivers seem to be skirting the regulations by calling the payments donations instead of fares - but that's a semantic argument that may not help the driver in the case of an insurance claim. The driver will be at the mercy of the insurance company if he/she has an accident with just a personal policy.
The crowdsourced ride service controversy may eventually be battled out in the courts. Who knows - if the Lyft/Uber side of the issue wins, the legal requirements for a personal-vehicle-based chase tour service may become easier logistically. However, even if that happens, the insurance companies won't be obligated to provide commercial-grade coverage on a personal policy. In the end, they hold all the keys to what the premiums will be. Those premiums are the single biggest cost factor of whether a personal-vehicle chase tour service will be economically feasible.