That makes sense. The insurance industry is willing to insure semi-commercial drivers if the coverages, payouts, and rates work out. This doesn't mean regular auto insurance will cover Uber drivers. It means buying a policy that's more expensive than a regular auto policy, but cheaper and more standardized than a taxi company would buy. GEICO is already offering such a policy.
It's more of a standards issue than a liability issue. Commercial liability policies are custom, complicated and negotiated. I've bought a few over the years, including one for a DARPA Grand Challenge team. What's needed for the Uber driver people is a standard policy that covers the rather uniform job they do. The universe of Uber drivers is large enough to allow statistical rating of the risk, so there's little need for an unknown-risk markup.
Of course, Uber is trying to dump the cost of this on their drivers. The insurance industry isn't taking a position on who pays the premium, as long as it gets paid.
Of course, Uber is trying to dump the cost of this on their drivers.
Loaded language aside, I don't see any other arrangement making sense than the driver being the policyholder; after all, (s)he can be driving for any number of companies, so whose insurance would pay if there was an accident during "Period 1"? It would be a liability mess, and probably much worse for the victims of the accident, who would have to wait out for that to be resolved.
It makes much more sense for drivers to demand a raise than to have the companies cover the insurance, in my opinion.
Why would the drivers need a raise? They've been driving with the risk that their insurance wouldn't pay out to cover them for an accident for a while now - effectively self-insuring - so that risk premium was presumably priced in to the rate Uber and Lyft offer. But self-insuring is inefficient, so drivers should have been demanding more money to cover that risk than they would need to pay an insurer to join a shared risk pool, so if anything this would allow rideshare services to lower the rates they pay.
Of course, the kind of drivers who are willing to take on a job which carries an unknown uninsurable liability risk are probably not good estimators of how much they should be pricing in to their rates to cover their downside, so the existence of insurance companies putting a price on that may tell them just how badly they've been underestimating their position.
Uber could easily just cover drivers while picking up or dropping off customers.
Honestly, Uber would be well served by allowing people to be very part time Uber drivers (<10h a week) as the market is both flexible and predictable. EX: Having a restaurant worker dropping off the bar crowd just after their shift. The fact they don't do this means people need to be Uber drivers most of the time which means the average Uber driver makes less money / hour and Uber is far less able to meet peak demand which lowers perceived quality.
IMO, the only reason why they did not do this is they were trying to get their drivers to drive on their existing insurance which was never going to fly long term. In the end having a supplier pay for insurance just means their charge higher prices so Uber ends up paying for insurance either way.
PS: They would likely have been liable if any large insurance company decided to sue them for this practice. IANAL but this seems like one of the few cases of clear http://en.wikipedia.org/wiki/Tortious_interference
The "idle' phase is part of picking people up. It's not like Uber drivers get paged while their sleeping at home to come pick people up. There is a clear 'on the lock' vs 'off the clock' situation which Uber already tracks.
Wouldn't the driver be covered under their personal insurance during the idle phase anyway? They don't have anyone else in the car, so e.g. A passenger would just be a normal passenger if they had one, not a paying client.
I don't see why they'd need some special insurance policy to cover the idle phase. Do personal insurance coverages have some disclaimer about waiting around with the intent to use your vehicle commercially?
Idol time is still commercial use. Consider if Starbucks suddenly decided to pay barista's on a minute by minute basis based on if they were actively making coffee. Clearly, that’s not going to let Starbucks get around minimum wage laws.
From a risk standpoint which is what insurance cares about Idling Uber drivers are going to spend way more time on the road than average so their much higher risk.
It's more of a standards issue than a liability issue. Commercial liability policies are custom, complicated and negotiated. I've bought a few over the years, including one for a DARPA Grand Challenge team. What's needed for the Uber driver people is a standard policy that covers the rather uniform job they do. The universe of Uber drivers is large enough to allow statistical rating of the risk, so there's little need for an unknown-risk markup.
Of course, Uber is trying to dump the cost of this on their drivers. The insurance industry isn't taking a position on who pays the premium, as long as it gets paid.