Do You Know if You Have Rideshare Drivers on Your Books?
If you haven't considered the impact of new ridesharing options, such as Uber, Lyft or SideCar, on client auto coverage, it's time to add it to your list of risk assessment issues. You may have clients right now who haven't even considered the impact on their policies if they are using their personal car to earn money as a rideshare driver.
The leading rideshare company, Uber, has only been around since it tested its first app in 2012. It's convenient for users, particularly since the instant pay option was added, and it's certainly a great choice for drivers looking for flexible scheduling. In addition, it's been reported that Uber's internal data reveals that "drivers who use the app to give rides-for-hire in their personal cars are making more money as chauffeurs than professional taxi drivers do — as much as $17 an hour in the District and Los Angeles, $23 in San Francisco and $30 in New York."
And Uber continues to expand, having recently added UberEATS (restaurant meal delivery), Uber for Business (to support business travelers) and UberPool (to provide commuting options).
So, knowing this, what's an insurance agent to do? First, it's important to understand what is covered by each insurance company.Typically (but not always — which is why you need to investigate each situation), personal auto coverage, including liability, applies when the car is being used for personal travel, and then rideshare companies assume coverage when there is a paying passenger in the car.
But who is responsible when the driver is actively using their car for ridesharing, but doesn't have a passenger at the time of an incident? Who is liable when the driver is simply driving to a pickup, waiting, or has just dropped off a passenger? This is the gray area that requires your careful analysis as an agent. Most personal auto insurance companies won't cover this transition time, arguing that these on-the-clock times are part and parcel of the job. Many companies view these times in similar light to those exclusions related to other commercial activities that a person may do with their personal vehicle, for example pizza delivery. There may also be gaps in liability or umbrella coverage during these time periods.
Unfortunately, there is no clear-cut, always reliable solution. Some insurance companies have begun offering a ride sharing endorsement that can be added to a personal auto policy. This "blended" solution bridges personal and commercial use, but again, it isn't available from every company or in every geography.
But now you know — rideshare has to be on your radar. Are you asking your clients directly if they're involved?