Lawmakers are being encouraged to expand the scope of the Graves Amendment as Congress prepares for the upcoming surface transportation reauthorization, which is set to replace the expiring Infrastructure Investment and Jobs Act after September 30, 2026.
The proposal calls for extending legal protections currently granted to traditional car rental companies under the Graves Amendment to peer-to-peer (P2P) and ride-share platforms. Supporters say this change would shield these companies from lawsuits when accidents are caused by drivers using their platforms, potentially lowering costs for consumers seeking rides by reducing litigation expenses.
The Graves Amendment was enacted in 2005 as part of a broader transportation bill and removed liability from car rental firms for accidents not caused by their own negligence. Before its passage, many states imposed “vicarious liability,” allowing lawsuits against rental firms for damages resulting from driver-caused accidents. Advocates argue that expanding these protections now makes sense given the growth of P2P car-sharing services and would align regulation with longstanding industry standards.
Historically, vicarious liability gained prominence in the legal system during the 1960s shift from negligence-based standards. This contributed to a major insurance crisis in subsequent decades, leading some insurers into bankruptcy due to escalating litigation costs and premiums across various sectors.
Currently, about 30 states have eliminated legal grounds for suing P2P car-sharing platforms. The upcoming federal reauthorization could override remaining state laws with a nationwide standard. Proponents note that most drivers on these platforms are independent contractors rather than employees, further supporting exemption from vicarious liability except in cases involving unsafe vehicles or unqualified drivers.
As policymakers finalize details of new surface transportation legislation in coming months, advocates say modernizing regulations will help support innovation while protecting consumers and businesses alike.
