There is finally a sort of insurance product tailored to the needs of Lyft, Sidecar, and Uber drivers. A group called Peers is trying to solve one of the most pressing challenges facing ride-sharing drivers: insuring their vehicles.
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Peers and a leasing and finance company called Breeze are offering a product called Keep Driving. Those that pay around $20 month will get a policy that will pay for a rental car that will keep them on the road and making money while their regular wheels are in the shop.
There are a few problems with this policy, which must be pointed out here. First Peers policy does not offer liability insurance, which is the biggest deficiency in Uber’s current set up. Liability insurance is the main insurance drivers need because most liability claims involve injuries, not damaged vehicles. Drivers are vulnerable to lawsuits and other claims.
Second the policy does not pay to replace a damaged or destroyed vehicle, in other words, collision insurance. It simply provides a rental car, which is questionable.
Third there’s no lost income insurance to help a driver pay bills if she is off the road for days or weeks because of an injury or lack of a vehicle. Peers offers this product for people who rent out their homes via Airbnb but not for drivers.
Fourth the insurance is only available in the San Francisco Bay area. If you’re driving for Uber in a place like St. Louis or Miami, you’re out of luck.
Obviously some better means of providing real insurance for ridesharing drivers needs to be found. If not, this industry is doomed from the beginning. Peers needs to work harder and find a better policy. Although, they may have little choice because major insurers are probably waiting to see how the legal battles around Uber play out before jumping into the business.
Breeze, interestingly enough, is developing a car sharing business of its own that could be far superior to Uber’s business model. Breeze is leasing Toyota hybrids to drivers for a flat fee. It might be a good market for Toyota’s fuel cell vehicles. The driver uses the vehicle as his or her personal car and can return it to Breeze if he or she wants to stop driving.
Breeze allows for high usage, so it sounds like a better deal for drivers. It also sounds suspiciously like a traditional taxi cab. It’ll be interesting to see how this works out and if one of the big rental car companies will jump into this business.
Interestingly enough, Breeze is backed by Dallas Mavericks owner and Shark Tank star Mark Cuban. It sounds like a better business model than Uber; maybe they should start making vans available to drivers as well.
Even with insurance becoming available, it would still be a good idea for average people to be leery of ridesharing. The legality and liability issues are not settled yet, which could get you into a lot of trouble fast.