DMV

Paid Rideshare

What is paid rideshare?

Paid rideshare refers to for-hire passenger transportation provided by rideshare companies. A rideshare company is a corporation, partnership, sole proprietorship, or other entity that operates in this state and uses a digital network (an on-line enabled app, internet site, or system offered by a rideshare company) to connect riders to drivers who use their personal vehicles to provide prearranged rides for a fare. Iowa law calls rideshare companies “transportation network companies.”

Information for rideshare companies

How does a rideshare company get permission to operate in Iowa?

Rideshare companies are subject to chapter 321N of the Iowa Code. Under chapter 321N, any company that wants to operate as a rideshare company in Iowa must get a permit from the Iowa DOT that’s good for one year. The fee for the permit is $5,000. The Iowa DOT may issue the permit only if the company pays the fee and demonstrates that the company meets all of the requirements of chapter 321N and Iowa DOT rules that implement chapter 321N. Permit applications must be submitted to the Office of Vehicle and Motor Carrier Services via the following addresses or numbers:

  • By mail:
    Vehicle and Motor Carrier Services Bureau
    Iowa Department of Transportation
    P.O. Box 10382
    Des Moines, Iowa 50306-0382
  • By email: omcs@iowadot.us
  • In person: Motor Vehicle Division building, 6310 SE Convenience Blvd., Ankeny, Iowa.
  • Via fax: (515)237-3225

 

Are approved rideshare companies authorized to operate anywhere within Iowa?

Yes. Under Iowa law, once approved, a rideshare company may operate anywhere within the state, and is not subject to local regulation. There is an exception, however, for commercial service airports. Commercial service airports may regulate the operation of motor vehicles on the airport's premises to promote orderly use of the airport and may establish, alter, and collect rates, fees, rental payments, or other charges for the use of the airport's services and facilities. Rideshare companies and their drivers remain subject to these regulations.

Uber and Lyft are approved rideshare companies in Iowa.

 

Information for drivers

How do I become a rideshare company driver?

You don’t have to complete any application with the Iowa DOT to become a paid rideshare driver. The rideshare company must require you to submit an application to the rideshare company to determine whether you are eligible to be a driver in its network. The application must include your name, address, and age; a copy of your driver's license, a copy of the registration for the personal vehicle you will use to provide rides, proof of financial liability coverage covering your use of the personal vehicle, and proof of financial responsibility that shows you have coverage in the amounts required by Iowa law (see the discussion of insurance below for these amounts).

In addition, rideshare companies are required to complete a local and national criminal background check for you, search the national sex offender registry database for you, and obtain and review your driving record before permitting you to serve as a driver in their network. These are the requirements that apply:

  • Age: You must be at least 19 years old.
  • Driver’s license: You must have a valid driver’s license that allows you to drive a personal, noncommercial vehicle (in Iowa, typically a Class C noncommercial operator’s license). It does not have to be a commercial driver’s license or chauffeur’s license, but it can’t be an instruction permit, special instruction permit, or temporary restricted license, and it can’t be restricted to operating vehicles equipped with an ignition interlock device.
  • Driving record: You must have a clean driving record for the prior three-year period. A clean record means:
    • Your license is not currently suspended, revoked, barred, or otherwise not valid.
    • Your driving privileges have not been suspended, revoked, barred, canceled, denied, or disqualified at any time during the prior three-year period.
    • You have not been convicted of more than three moving violations during the prior three-year period.
    • You have not been convicted of any of the following during the prior three-year period:
      • driving while your license was denied, canceled, suspended or revoked;
      • driving while your license was suspended, denied, revoked or barred for an operating while intoxicated violation;
      • driving while your license was suspended, denied, or revoked for failure to provide proof of financial responsibility or security following an accident; or
      • reckless driving;
  • Criminal record. You must have a clean criminal record during the prior seven-year period. A clean criminal records means you have not been convicted of any of the following during the prior seven-year period:
    • any felony;
    • an operating-while-intoxicated violation; or
    • any crime involving resisting law enforcement, dishonest, injury to another person, damage to the property of another person, or operating a vehicle in a manner that endangers another person.
  • Sex offender registry. You cannot be a paid rideshare driver if you are on the national sex offender registry.

What kind of vehicle can I use?

You can use any personal, noncommercial passenger motor vehicle that is properly registered for operation in Iowa, and that is not a taxi, limousine, or other vehicle for hire. (Remember that a vehicle that seats more than 15 people, including the driver, is a commercial motor vehicle, so the vehicle cannot have more seating capacity than that.) It must be a vehicle that you either own, lease, or you are otherwise authorized to use.


What if there is a lien (loan) against the vehicle, or I don’t own the vehicle? Do I have to do anything special?

There are special notification requirements if there is a lien against the vehicle of if you don’t own the vehicle.

  • Lien. If there’s a lien (a loan) against the vehicle, you must notify the lienholder (the company or person that issued the loan) that you intend to use it as a rideshare company driver, within the seven-day period before you start using the vehicle to provide paid rideshare rides.
  • Vehicle you don’t own. If you don’t own the vehicle, you must notify the owner of the vehicle that you intend to use it as a rideshare company driver, within the seven-day period before you start using the vehicle to provide paid rideshare rides. You must also tell the owner that the owner’s automobile insurance policy, depending on the policy’s terms, may not provide any coverage while you are driving the vehicle for paid rideshare purposes (whether you are logged on to the rideshare company’s digital network and available for a prearranged ride, or in the course of picking up or transporting a prearranged ride).

These notices are required because most automobile insurance policies include a business use clause that excludes coverage for paid driving activities. The notice gives the lienholder or owner an opportunity to make sure the vehicle is properly insured for use in paid ridesharing and that their interest in the vehicle and potential liability will be protected in case you are involved in an accident while engaged in paid rideshare driving. You are subject to a $250 civil penalty if you fail to give a required notice to a lienholder or owner, and you will not be allowed to register a vehicle until the penalty has been paid.


Do I need special insurance? How much coverage do I need?

Most automobile insurance policies include a business clause that excludes coverage if you use the vehicle for paid driving activities. You should review the policy that covers the vehicle and consult with an insurance agent to make sure the vehicle is properly insured and that there will be insurance coverage if you are involved in an accident while using the vehicle for paid rideshare driving. Some insurers are now offering insurance “riders” (a special addition to the policy) that specifically provide coverage for paid rideshare driving.

When considering your coverage, be mindful of the specific insurance requirements that apply under section 321N.4 of the Iowa Code. Under that section, either you or the rideshare company on your behalf must maintain primary automobile insurance that:

  • Recognizes you are a paid rideshare driver or that you otherwise use a motor vehicle to transport passengers for compensation;
  • Covers you while you are logged on to the rideshare company’s digital network and while you are engaged in a prearranged ride; and
  • Provides the required amounts of liability coverage.

The required amounts of coverage are different, depending upon whether you are logged on to the rideshare company’s digital network and available to receive request for a ride but not yet engaged in a ride, or engaged in a prearranged ride:

  • Logged on and available: When you are logged on to the rideshare company’s digital network and you are available to receive requests for a prearranged ride, but are not engaged in a prearranged ride, the insurance must cover you in the following amounts:
    • at least $50,000 because of bodily injury to or death of one person in any one accident;
    • at least $100,000 because of bodily injury to or death of two or more persons in any one accident, and;
    • at least $25,000 because of injury to or destruction of property of others in any one accident.
  • Engaged in a prearranged ride: When you are engaged in a prearranged ride (meaning you have accepted a ride and are in the course of picking up the passenger, or have picked up the passenger and are in the course of delivering the passenger to the passenger’s destination) the insurance must cover you in the amount of at least $1,000,000 because of bodily injury to or death of one or more persons and injury to or destruction of property of others in any one accident.

The insurance requirements may be satisfied by insurance you maintain, insurance the rideshare company maintains, or a combination of both. Before you can start accepting rides through the rideshare company’s digital network, the rideshare company must disclose to you in writing the types, amounts, terms, and limits of automobile insurance the rideshare company provides to you as a paid rideshare driver while you use a personal vehicle while using the rideshare company’s digital network, and must also disclose to you in writing that your own insurance policy, depending on the policy’s terms, may not provide coverage while you are logged on to the company’s digital network and are available to receive requests for rides, or while you are engaged in a prearranged ride. You should carefully review the insurance information provided by the rideshare company and review that information and your own coverage with your insurance agent to make sure you will be legally and adequately covered at all times.


Do I have to carry proof of liability coverage? What if I am in an accident?

You are required to carry proof of liability coverage that shows you have coverage in the required amounts at all times you are using a motor vehicle in connection with the rideshare company’s digital network (both when you are logged on and available for a ride and when you are engaged in a prearranged ride). The proof may be an insurance card provided by your insurer or by the rideshare company, or both.

If you are in an accident, you must provide if requested proof of liability coverage to any other party to the accident or the party’s insurer, and to any investigating police officer. You must also disclose if requested whether you were logged on to a rideshare company's digital network or were providing a prearranged ride at the time of the accident.


Information for riders

Are there limits or controls on the fares a rideshare company can charge me?

No. Iowa law does not place any limits or controls on the fares a rideshare company or its drivers may charge you. However, Iowa law requires the rideshare company to give you an electronic receipt that contains the origin and destination of the trip, the total time and distance of the trip, and an itemized account of the total fare you paid. The electronic receipt must be delivered within a reasonable time after the ride has been completed.

How do I know if a driver or vehicle is really affiliated with and approved by a rideshare company?

Before you enter a personal vehicle driven by a rideshare company driver, the rideshare company must disclose to you a picture that prominently displays the face of the driver and the make, model, and license plate number of the personal vehicle used by the driver.

Am I entitled to protection of my personal information?

Yes. A rideshare company may not disclose your personal information to a third party unless you consent to the disclosure, the disclosure is required by law, the disclosure is required to protect or defend the terms of use of the company's services, or the disclosure is required to investigate a violation of the terms of use. “Personal information” includes but is not limited to your name, home address, telephone number, and payment information. However, the rideshare company may disclose your name and telephone number to your driver to help the driver identify and locate you.

Am I entitled to protection against discrimination and to equal access while using paid rideshare services?

Yes. Rideshare companies operating in Iowa must adopt and enforce nondiscrimination and accessibility policies. “Nondiscrimination policy” means a policy that prohibits discrimination against riders on the basis of race, age, disability, religion, color, sex, or national origin. “Accessibility policy” means a policy that prohibits discrimination against and assures equal opportunity and access to riders who are persons with disabilities under the Americans with Disabilities Act of 1990.

Where can I report complaints about rideshare companies?

If you have a complaint about a rideshare company operating within Iowa that is within the regulation and jurisdiction of the Iowa DOT, complete the Rideshare (Transportation Network Company) Notice of Complaint form and submit it to the Office of Vehicle & Motor Carrier Services. The form may be submitted to the following addresses or numbers:

  • By mail:
    Vehicle and Motor Carrier Services Bureau
    Iowa Department of Transportation
    P.O. Box 10382
    Des Moines, Iowa 50306-0382
  • By email: omcs@iowadot.us
  • In person: Motor Vehicle Division building, 6310 SE Convenience Blvd., Ankeny, Iowa.
  • Via fax: (515)237-3225

 

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