(Bloomberg) — Car-booking services run by Uber Technologies Inc., Lyft Inc. and Side.Cr LLC are creating "serious" gaps in coverage for drivers, passengers and pedestrians, California's insurance regulator said.

Commissioner Dave Jones recommended that the startups provide $1 million in commercial liabilityinsurance starting from when a driver switches on one of their mobile apps, which connect vehicle owners with strangers looking for a ride, according to a statement today. He also urged the California Public Utilities Commission to adopt additional regulations of the industry after a recent investigative hearing.

The inquiry "revealed serious insurance gaps in the current business model of transportation network companies such as Uber, Lyft and Sidecar," Jones said in the statement. Such services are "encouraging non-professional drivers to use their personal vehicles to drive passengers for a profit, a risk which personal automobile insurance simply does not cover."