Ride-sharing startup Uber announced Friday morning that its drivers will now have insurance whenever they’re on duty, even if they don’t have a passenger in the car.
The change is in response to backlash the company has faced for not insuring drivers while they’re driving around waiting for pick-ups. The issue became a problem for the company after an Uber driver in San Francisco hit and killed a 6-year-old girl on New Year’s Eve while waiting for a fare. The girl’s family sued, and the case has drawn attention of regulators in various states where Uber is trying to expand.
In response, Uber announced that, starting today, it will carry insurance on its drivers as long as they’re logged on to Uber’s app. The coverage levels are significantly higher when a customer is in the car.
“Uber is becoming the first and only company to have a policy in place that expands the insurance of ridesharing drivers to cover any potential ‘insurance gap’ for accidents that occur while drivers are not providing transportation service for hire but are logged onto the Uber network and available to accept a ride,” the company announced in a blog post.
Drivers are still required to have a personal insurance policy but if it doesn’t cover an accident, Uber’s policy will provide coverage of $50,000 per person, $100,000 for bodily injury and $25,000 for property damage.
Uber competitor Lyft announced similar plans last night although the company hasn’t yet begun offering the between-customers insurance to its drivers.
UPDATE: Uber CEO Travis Kalanick told reporters today that one reason the company has moved to fill the insurance gap for drivers is that public officials have raised concerns about the issue. Lawmakers in Seattle, for example, have expressed worries about the lack of insurance coverage between rides.
“What we see is that this insurance gap, though incredibly rare, is something that we don’t want legislatures and regulators to have to think about while putting together those rules,” Kalanick said. “They can take the time to make sure this is done right.”
Uber and Lyft are among a handful of new “ride-sharing” companies that allow consumers to hire private drivers for short periods using apps. The services act more like taxi or limo services than traditional ride-sharing activities like carpooling and have attracted fleets of professional and amateur drivers.