Uber hikes rates so its drivers can pay for insurance

The ride-hailing service aims to address driver-relations issues raised against the company with the move

Uber hikes rates so its drivers can pay for insurance

Insurance News

By Allie Sanchez

To address issues raised about its driver-relations practices, ride-hailing firm Uber is launching a pilot program in eight states to cover the cost of insurance for its pool of drivers.

The firm announced that it is hiking its fare rates by 5 cents per mile to fund personal injury insurance in Illinois, Massachusetts, South Carolina, West Virginia, Arizona, Oklahoma, Pennsylvania, and Delaware.

Media outlet Buzzfeed reported that Uber has partnered with Aon and OneBeacon for coverage and will pay up to $1 million for medical expenses and $150,000 maximum for survivor benefits.

All of these benefits will cost drivers 3.75 cents per mile.

While the cost of a workplace injury is usually covered by an employer through worker’s compensation and disability insurance, Uber drivers are independent contractors. That means the company isn’t required to offer those kinds of coverage. Instead, Uber is raising rates for consumers and allowing drivers to decide whether to keep the extra cash or use it to pay for insurance, Buzzfeed reported.

"We believe drivers should have a low-cost option to protect themselves and their families against rare and unforeseen accidents that prevent them from working," said Uber head of safety and insurance Gus Fuldner.

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