The "gig economy" or "sharing economy" as it is sometimes called is a fast growing segment of the economy. Workers and industries alike are ditching the traditional 9-5, employer/employee relationship for on/off switch of platform/app-enabled and task-driven "gigs" in this new economic frontier.
It's astounding the volume of growth in this sector of the economy:
By 2020, 40% of the U.S labor force will be composed of gig economy workers. Seeking out the flexibility and autonomy afforded by gig work, these workers have fled traditional employment, and in the process assumed higher levels of personal risk. According to our primary research, these workers: tend to be underinsured; tend to underestimate their own risk; and are undereducated about insurance and how it applies to the work that they do
A big driver of work in this area is ride-sharing services like Uber and Lyft. These apps revolutionize local on demand transportation. Instead of waiting forty-five minutes at a bus stop to be driven in a circle to take an hour to where you need to be just a few miles away, or calling a taxi company and waiting for the dispatcher to send a driver your way, and paying through the nose to do it, in most cities you can have a freelance Uber or Lyft driver summoned to your precise location using an app within minutes.
This has direct implications for personal injury auto accident and premises liability claims.
Let's take an app like Uber. An Uber driver is generally considered an independent contractor, not an employee, of the company. However, this creates serious concerns for users of the App. It's one thing to get into the car with a taxi driver, or even to get on a bus. You know that the driver has been vetted in some way and a company is standing behind that driver. But what about an Uber or Lyft driver?
You likely wouldn't get into the car with a stranger and ask them to drive you across town for $20. Uber knows that. And we would get into serious issues with insurance coverage if Uber relied on the driver's insurance to cover an accident. So Uber has an insurance arrangement which covers drivers who are on their platform (i.e., using their app to pick up and drop off riders).
Uber drivers, for example, are covered by insurance that will cover the driver and Uber in the event of an accident where the rider or another party injured by the negligence of the driver has a claim for personal injuries and damages from the accident. Those coverages are commercial-type coverages, meaning not the low-level $30k insurance policy that is barebones standard coverage in Texas: Uber lists the policy as going $1,000,000 or more, depending on the requirements of the state where the accident occurs. This also protects Uber from potential claims of negligent entrustment of the vehicle by allowing for coverage that extends to them as the rideshare app operator.
This is a benefit for Uber, because it motivates people to use their service. It also avoids the problem of potentially no coverage if your own auto insurance (if you're a driver) finds out you were using Uber at the time of the accident and denies the claim for no coverage due to commercial use.
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