The question of the adequacy of insurance policies for rideshare drivers was one of the big debating points in the long process of California becoming the first state to promulgate statewide regulations covering ride services you summon via smartphone apps.
They are now called "Transportation Network Companies" in California — a category covering services like UberX, Lyft, and Sidecar. A feature story by me about how that happened and the regulatory tussles over such services across the nation will be in a soon-forthcoming issue of Reason (subscribe now!)
See this detailed KQED story from January for some interesting stories and conundrums involving insuring rideshare drivers, who generally find that their personal policies won't cover them if they are known to be getting paid for driving.
While Uber has for a long time offered a blanket supplemental insurance liability policy to cover its drivers while they are actually ferrying fares summoned via Uber app, today Uber has announced a new insurance plan to cover its drivers who are on call on all levels.
….there has been much written about an "insurance gap" during the time that ridesharing drivers are not providing transportation services for hire, but have the Uber app open and are available to receive a trip request. ….the novelty of this growing and innovative form of transportation has resulted in complex questions regarding insurance and there may be language in some policies in some states where ambiguity remains about whether personal insurance will cover the time between trips. The bottom line is that the drivers who use our app and the riders and communities we serve should have the confidence that any potential "insurance gap" is covered with a safety net as governments and insurance companies work out the details of ridesharing in their cities and states. So, in order to fully address any ambiguity or uncertainty around insurance coverage for ridesharing services, Uber is becoming the first and only company to have a policy in place that expands the insurance of ridesharing drivers to cover any potential "insurance gap" for accidents that occur while drivers are not providing transportation service for hire but are logged onto the Uber network and available to accept a ride. Starting today, if a driver's personal insurance policy is found not to cover an accident during this period, this new policy will provide contingent coverage for a driver's liability at the highest requirement of any state in the U.S: $50,000/individual/incident for bodily injury, $100,000 total/incident for bodily injury and $25,000/incident for property damage. Uber is taking this step to eliminate any ambiguity while the insurance industry and state governments update policies and regulations for the new world of ridesharing transportation. On the heels of us announcing that effective today, we are providing this coverage in every state, we learned that Lyft, another ridesharing service, is following our lead and will roll out this coverage over time state by state.
In a press conference call this morning, Uber's colorful co-founder Travis Kalanick continued to sound pugnacious about fighting off taxi protectionism across the nation. He condemned city councilpeople who are "in the pocket of the taxi industry, straight up" and seemed hopeful that easing people's mind on this insurance issue would help toward that cause.
Uber's adversaries in the regulatory process of the California Public Utilities Commission (CPUC) raised lots of questions about the quality and efficacy of the insurance policies that California's regulations require UberX to have. While CPUC reviewed the policies, their specifics have not been made public by Uber. Uber also stresses they had such policies even before being ordered to by CPUC. But Kalanick assured me today when I asked "whether our insurance works, it just does. There are a lot of eyes on Uber and we are going above and beyond in making sure" that the "drivers we are working with feel they are protected and covered, and the public at large" as well.
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