# Risky business behind the wheel of the new economy



## LookyLou (Apr 28, 2014)

Decent article.

http://www.sacbee.com/2014/06/22/6497314/shawn-hubler-modern-sharing-economy.html


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## Sydney Uber (Apr 15, 2014)

LookyLou said:


> Decent article.
> 
> http://www.sacbee.com/2014/06/22/6497314/shawn-hubler-modern-sharing-economy.html


As business operators these are issues that you can't escape. I still can't see how Uber aren't forced to pay for full commercial coverage when its easily proven that a driver is working Full-time with them after being logged on for 40 hours or more. This should change the relationship of being merely a part time contractor to a full time worker.


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## UberComic (Apr 17, 2014)

I'd be screwed if I didn't have the money coming in from Uber/Lyft. I'm still paying debt from my old business.


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## Sydney limo (Jun 23, 2014)

I agree Sydney Uber, here in Australia Uber probably represents more than 80% of a contractor's income. I think that legally Uber would have to switch the contractors to full-time employees.


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## Sydney Uber (Apr 15, 2014)

Sydney limo said:


> I agree Sydney Uber, here in Australia Uber probably represents more than 80% of a contractor's income. I think that legally Uber would have to switch the contractors to full-time employees.


That may be the case for Newbies who put a car on without any pre-existing clients. But I'd hate to rely on one source of income in this industry to that extent.

With Uber, all it takes is a couple of over-entitled rich kids to drop your rating below 4.5 and Uber retains the right to deactivate the iPhone. I've seen some guys put on brand new 120k Q7s, the monthly finance on that is up around $1800 p/m not counting the final huge residual payment, fuel, running costs, insurance etc

If they are getting 80% of their earnings through UBER they'd soon need to be dodging the Repo Man. (Another great movie)


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## UberComic (Apr 17, 2014)

Sydney Uber said:


> If they are getting 80% of their earnings through UBER they'd soon need to be dodging the Repo Man. (Another great movie)


"Life of a repo man is always intense"

The fourth street bridge I posted a pic of earlier was used in the movie. Much of it was filmed in that area of downtown LA on and around Mateo and Santa Fe Ave.

Still have the soundtrack on vinyl somewhere. It's quite rare.


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## grams777 (Jun 13, 2014)

Sydney Uber said:


> As business operators these are issues that you can't escape. I still can't see how Uber aren't forced to pay for full commercial coverage when its easily proven that a driver is working Full-time with them after being logged on for 40 hours or more. This should change the relationship of being merely a part time contractor to a full time worker.


I found this earlier in an article about the California pending legislation:

"TNCs have argued that requiring $1 million coverage for the period when drivers have their app on but no match will kill their business model, as well as scare off insurance companies currently developing TNC products."

They are basically arguing that the business model only works because of avoiding insurance at certain levels at certain times - not so much innovation and service level. I realized when I put in full time hours, UberX was taking $1 per ride for the safe rides fee at the rate of about $20 per day. Arguably this fee is mostly for insurance, since it is per trip and 80% of it is passed on to regular Uber drivers I believe. So at about $400 per month in these fees, it seems that could come close to covering a primary commercial insurance for an UberX driver. Same for the similar Lyft fee.

As to the $1 million dollar amount, that may be to cover Uber and Lyft more than the driver. Most taxi limits I've seen are far lower than that. Perhaps it would be better to drop the $1 million to the 300-500k level, make it primary, and increase the relatively low property damage limits as well.

So in all of this, I don't really see why there isn't enough money from these $1 per ride fees to provide primary commercial insurance albeit at lower amounts more similar to the taxi driver levels of required coverage.


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## LAuberX (Jun 3, 2014)

grams777's math: $400.00/20=20days, pretty much full time. That should pay the monthly premium on a mid level commercial policy, I agree.

If another driver just turned on the app 3 hours per week and only got 2 hits, the math to pay a monthly premium is out the window. $9.00 per month buys nada.

Most Insurance is by the month, not just from 6-9 p.m. Saturday night.... So the way Uber does it now is the only way for it to make sense financially for the app owners.

This is the main reason for the uproar, being pushed by both the outdated taxi's and the insurance companies wanting to sell individual policies to all rideshare drivers.

The thing I never see mentioned is the GROWTH of customers for ride share. People summon Uber or Lyft at a much higher rate than "taxis" for many different reasons.... not just $$$

regulators protecting the industry they were created to regulate... ever see a teacher get fired? ours reminds me of the uphill battle charter schools face.


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## Sydney Uber (Apr 15, 2014)

LAuberX said:


> grams777's math: $400.00/20=20days, pretty much full time. That should pay the monthly premium on a mid level commercial policy, I agree.
> 
> If another driver just turned on the app 3 hours per week and only got 2 hits, the math to pay a monthly premium is out the window. $9.00 per month buys nada.
> 
> ...


Insurance companies are already offering discounts to Motorists who DONT commute, and park their cars for most of the week.

With the UBER App's geo-locating & tracking it would be a VERY simple process for UBER to calculate the actual miles/ KMs that a UBERx driver does. Then for those that are truly part-time have a Policy that charges them on a Pro-Rata basis.

The secondary benefit to this would be the modification of driving behaviour where Ride share drivers would aim to keep unnecessary dead miles down by employing the "drop & stop" method to wait for the next ping.

UBER could announce their "new" environmentally sound practice of employing "drop & stop" vehicle operation. They could direct customers to have a look at the UBER app and observe available cars stationary and waiting for their request. compared to old school Taxis constantly cruising and burning fuel, this saves on wear & tear, fuel, carbon emissions and lowers the risk profile - pretty hard to hit someone when parked.


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## grams777 (Jun 13, 2014)

I found a couple of lawsuits to show how this can play out in an accident:

Herrera vs Uber (UberX driver at fault)
http://www.scribd.com/mobile/doc/212005329
(link to Uber's response)

Lawrence vs Uber (Passenger opens door hitting bicyclist - requesting $3.5 million+, $325k of medical expenses incurred)
http://www.scribd.com/mobile/doc/200545863

In the response, Uber's responses basically say, none of this is our liability. It's all on the driver, passenger, other driver, or anyone else. The driver indemnifies Uber (see fifteenth defense in the Herrera response).

There are some interesting arguments in the first complaint about how Uber is involved in the process instead of just a software company. They tell the driver how to act, they match the driver and rider, they set the rates, they collect the money, they pay the driver, they basically hire and fire based on performance, etc.

It does seem the whole independent contractor idea is sketchy. To argue they are technology only, it would seem they would need to be closer to a model like airbnb, ebay, or perhaps zimride. In those applications, the buyer and seller are more obviously involved with each other in the transaction with more control. They negotiate price and decide who they do business with. Accounts aren't suspended (fired) because of a < 4.x star rating. That decision is the buyers unless something illegal was done or major terms violated.

The other problem here seems to be driving for Uber (or Lyft) saddles the driver with a deep pocket co-defendant for whom the driver has agreed to indemnify of any liability. This can be a very bad thing compared to say just running a small livery service or even a local cab company.

It does look like something needs to be done to get the driver into primary commercial insurance. For the drivers sake at least. And the policy amounts will need to be very high because plaintiffs will sue for big money because of the deep pockets involved (3.5 million + in the Lawrence case with 325k just in medical). But such cost and risk, do not seem to be reflected in the current rates which are in a free fall race to the bottom.


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## kalo (Jun 28, 2014)

grams777 said:


> So in all of this, I don't really see why there isn't enough money from these $1 per ride fees to provide primary commercial insurance albeit at lower amounts more similar to the taxi driver levels of required coverage.


The problem with this is that some drivers might be servicing their own clients, working for Uber, Lyft and Sidecar, all at one time. It's impossible to manage. With NO client and all of the apps on, which company should be responsible?


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## kalo (Jun 28, 2014)

I found this CPUC doc. Not exactly sure what it is. Likely hints at the direction we will see in California for TNC's soon. It shows many players different positions and ideas how to resolve this TNC dilemma esp during period 1, app on no client. I like the idea that if a driver is working for a TNC, his personal insurance will have a rider or such that covers the gap, taking into account the insurance that the TNC company will have for periods 2 and 3. The drivers would pay more for insurance, but likely not to the level of full commercial insurance.

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M098/K126/98126852.PDF


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## MJP (Jul 1, 2014)

grams777 said:


> There are some interesting arguments in the first complaint about how Uber is involved in the process instead of just a software company. They tell the driver how to act, they match the driver and rider, they set the rates, they collect the money, they pay the driver, they basically hire and fire based on performance, etc.


so if it looks like a duck and walks like a duck.....it's a duck!


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