The rideshare industry has exploded in terms of popularity over the past half a decade, with giant corporations like Uber and Lyft devoted to making transportation reliable, safe, and more enjoyable. At a swipe of an index finger and tap of a button, a shopper can hail a stunning car via a smartphone. Within just a few minutes, he or she will be picked and whisked off to a nearby shopping mall or market.
The overall number of individuals using rideshare services is growing rapidly. However, this isn’t all good news for rideshare drivers, especially this holiday season. As of 2015, 15% of the United States population was using rideshare services. Three years later, this number increased to more than 35%. That means millions of clients and billions of dollars for Lyft, Uber, and other rideshare companies. However, some drivers are experiencing challenges in making profits and have been organizing strikes. This has impacted the companies’ profits significantly.
Part of these issues involves insurance. Different drivers planning to take part in this business have begun signing up in drives. There are about 1.5 million rideshare drivers in the United States, and a larger number of drivers spent approximately four hours on the days they drive to make decent income. Uber estimated that its drivers spent a total of over 8.5 million hours daily, and the business continues to thrive.
The increasing costs for driver
Generally, rideshare drivers must consider various expenses and logistics. To drive for any ridesharing company, you must have a four-door vehicle with no cosmetic damage. The vehicle must have at least five functional seatbelts and of a specified age. Besides, the driver must have a valid driving license and adequate auto insurance.
One thing you should know about auto insurance in the context of rideshare is that your personal auto insurance doesn’t cover every aspect of the ridesharing process.
One thing you should know about auto insurance in the context of rideshare is that your personal auto insurance doesn’t cover every aspect of the ridesharing process. Uber, Lyft, and other ridesharing companies have various policies that cover their drivers, riders, and vehicles during the work period. But the definition of ‘work’ varied and can be very confusing.
Why supplementary insurance?
Lyft and Uber provide a comprehensive cover for their drivers whenever engaged in a ride. That means from the time when a client contacts you to the point you deliver him or her to a specified destination, you are covered by a million-dollar policy. However, if you are on the clock but not engaged in a ride, the insurance aspect is very confusing. Your personal auto insurance policy no longer covers you because you’re engaged in commercial activities. And the ridesharing company isn’t covering you fully.
For this interim period, you need some form of ridesharing insurance in case you aren’t covered fully. Note that if you’re involved in an accident while logged in the rideshare app and not engaged in a ride, the ridesharing company offers some form of limited liability cover, but not comprehensive. That’s why you need rideshare insurance – this is what’s commonly referred to as supplementary insurance. Remember to consult with rideshare expert lawyer to understand how this insurance works.
Face the ugly truth
Generally, this form of insurance is a fixed cost policy, and though inexpensive, it must be considered a supplementary expense for expense for rideshare drivers. The highest amount is about $20 monthly, and the lowest is $6 monthly. This policy is considered a supplement for your personal insurance but isn’t available in some states.
Thus, drivers whose insurance plans don’t include this form of insurance are encouraged to get another plan, such as commercial driver insurance. This downside of this option is that commercial driver insurance is higher compared to rideshare insurance – you may need to pay about $1,800 annually.
With rideshare insurance, the policy is usually fully covered throughout the driving process, and sometimes the policy can be taken off taxes. You, the policyholder, can enjoy other perks of your driving insurance, such as safe-driving discounts, roadside distance, and more.
However, the extra expense will impact rideshare drivers and travelers in some way. During this holiday season and in the future, it is imperative for drivers who intend to make some income to plan for this extra expense if they want to operate safely.