In a move that is sure to have repercussions for Uber’s ongoing war with regulators and the taxi industry, the ride-sharing giant is rolling out specialized insurance for UberX drivers. Uber and Metromile, an insurance company that produces a special “smart dongle” for cars that tracks mileage, made the announcement in San Francisco on Wednesday. The new insurance product will be available in California, Illinois, and Washington state in the coming months.
Metromile’s ride-sharing insurance product, which is offered in conjunction with Uber, works on a variable pricing plan on top of a monthly fee. It toggles between personal insurance and Uber’s own insurance package from the time they accept a ride request from a customer to the time a customer exits the car.
Drivers will be charged per mile and will be covered only under their personal policies, however, as they drive around looking for fares. Metromile’s dongle, which plugs in under the dashboard, uses Uber’s API to differentiate between when a driver is “on the job” or using their car for personal or ride-seeking use.
Dan Preston, Metromile’s CEO, told Fast Company that the insurance product would switch from charging drivers by the mile to flat coverage for their role as UberX drivers once triggered by Uber’s app. “From the point where an Uber driver accepts the ride, they’re not being billed through Metromile. They’re being billed through Uber,” he added.
The decision to offer drivers specialized policies tailored towards part-time ride sharing takes care of one of the most vexing complaints that has followed Uber, Lyft, and Sidecar: That drivers are underinsured, and that the personal insurance many part-time drivers rely on doesn’t offer coverage when they are on the clock. In anti-ridesharing promotional material aimed at the public, taxi industry trade associations have been attacking Uber on the insurance front with frequency.
In San Francisco and Chicago, users will also receive push alerts to help them avoid alternate side parking tickets. Beyond solving insurance issues for some drivers, the Metromile/Uber partnership has a secondary benefit: Locking part-time drivers even further into Uber’s ecosystem. The ride-sharing company offers everything from loans to buy new cars to partnerships with Spotify that allow riders to control the music in drivers’ cars.
San Francisco-based Metromile, which was founded in 2011, is a specialty car insurance provider whose business model revolves around their plug-in dongle for car OBD-II ports. In exchange for giving their insurance company a steady data stream from their automobile, drivers receive steeply discounted insurance costs. An app shows users Fitbit-style insights about their driving habits and analytics of their life on the road; the company’s flagship product is a pay-per-mile insurance product aimed at irregular urban drivers.
Users will be able to join a waiting list for the policies starting January 28, and enrollment will open in February. Metromile says they have been working on insurance for Uber drivers for approximately one year.
This article has been revised to clarify details of how Metromile’s insurance product and plug-in works.