Uber's Workers' Comp Insurance: What's Covered?

Uber's classification of its drivers as independent contractors has sparked debate about whether the company should provide workers' compensation insurance. While Uber argues that this classification releases them from providing benefits such as workers' comp insurance, others disagree, highlighting the company's control over drivers and the challenges drivers face when injured without adequate coverage. To address this, Uber offers optional injury protection insurance, which covers medical expenses and lost wages for drivers, but it is not a substitute for traditional workers' comp.

Uber drivers are independent contractors, not employees

Uber has long argued that its drivers are independent contractors, not employees. This classification releases them from the duty to pay overtime, benefits, and workers' compensation insurance. However, this is a highly contested issue, with some courts ruling that Uber drivers are employees because the company directs drivers on what to do and who to pick up.

The debate centres on the level of control Uber has over its drivers. Uber drivers control their own schedules, choose their passengers, and are required to file their self-employment tax returns. They do not have taxes withheld or get any of the benefits that regular employees do. They are also paid by the customers, not directly by Uber.

However, Uber unilaterally sets the pay received by its drivers, and provides various training materials and requirements. Uber also takes a 25% fee for each fare, and adjusts the sum the driver receives for any reimbursements, promotions, or bonuses.

In 2020, the state of California passed Assembly Bill 5 (AB5), a controversial law that made it significantly harder for employers to classify workers as independent contractors. However, less than a year later, California voters approved Proposition 22 ("Prop. 22"), which created an exemption to AB5 for Uber, Lyft, and other app-based ride-hailing services. In 2021, a California state judge ruled Prop. 22 unconstitutional, but in 2023 a California appeals court overturned this decision.

The National Labor Relations Board (NLRB) has also issued an advice memorandum finding that Uber drivers are independent contractors, because they have control over their cars, work schedules, and log-in locations, and are free to work for competitors.

Despite this, there is evidence to suggest that Uber drivers more closely resemble employees. Most Uber drivers are not trying to get rich or start a new career as a driver, but are simply making a little extra money to help with their bills. Uber also has complete control over the payments received from customers and paid to the drivers.

Uber does offer Driver Injury Protection in some states, which covers medical expenses up to $1,000,000, disability benefits up to $500 per week, and survivor benefits up to $150,000. However, drivers are responsible for paying their premiums.

Uber drivers are not eligible for workers' compensation

Uber has argued that its drivers are independent contractors as they drive their own cars and provide rides to customers independently. According to Uber, this classification means they are exempt from paying overtime, benefits, and workers' comp insurance.

While some courts have ruled that Uber drivers are employees because the company directs drivers on what to do and who to pick up, others have sided with Uber, stating that drivers act independently, use their own property, and are paid by customers, not directly by Uber.

Uber drivers who are injured on the job have a couple of different options. One is to file a claim under Uber's Driver Injury Protection Policy, which covers medical bills and other damages due to an accident. However, this insurance is voluntary, and drivers must elect to enroll in the program at their own cost.

Another option is to file a claim in court. In recent years, judges have been increasingly willing to address whether companies like Uber are misclassifying their drivers in an attempt to avoid paying benefits. Drivers who believe they have been misclassified can also file an appeal with the workers' compensation commission, which will assess a number of factors to determine whether a driver is, in fact, an employee.

Uber offers optional injury protection insurance

Uber offers its drivers optional injury protection insurance, which is available in 41 states and Washington, DC. This insurance is offered through Affinity Insurance Services Inc. and underwritten by Atlantic Specialty Insurance Company.

The insurance is designed to provide peace of mind for drivers and delivery people working with Uber in case of accidents. It covers medical expenses of up to $1,000,000 with no deductible or copay, disability payments of up to $500 per week, and survivor benefits of up to $150,000 for the driver's family in the event of a fatal accident.

The insurance costs less than $0.03 per mile on covered trips, with the premium calculated based on miles travelled while on a trip or delivering an order. The premium is automatically deducted from the driver's earnings, and Uber takes no compensation from the premiums.

Drivers can enrol or terminate coverage at any time through the Insurance section of the Uber Driver app. The insurance covers drivers in the following scenarios:

• While online and available for trip requests
• While en route to pick up passengers or deliveries
• During a trip using the Driver app

It is important to note that the insurance does not apply if the driver is performing services for another company or driving their vehicle for personal reasons.

Uber drivers can file a claim under Uber's Driver Injury Protection Policy

Uber classifies its drivers as independent contractors, and as such, they are typically not eligible for workers' compensation benefits. However, Uber does offer its drivers an alternative in the form of its Driver Injury Protection Policy.

This policy is optional and is offered through Affinity Insurance Services Inc. and underwritten by Atlantic Specialty Insurance Company. It is available in 41 states and Washington, DC, and costs less than $0.03 per mile on covered trips. The premium is calculated based on miles traveled while on a trip with a rider or en route to drop off an order and is rounded to the nearest cent at the end of each trip.

The policy covers the following:

• Earnings replacement up to a maximum of $500 per week
• Accident medical expenses up to a maximum of $1,000,000 with no deductible or copay
• Temporary total disability up to a maximum of $500 a week
• Continuous total disability up to a maximum of $500 a week
• Accidental death up to a maximum of $50,000
• Survivor benefits up to a maximum of $150,000
• Accidental dismemberment up to a maximum of $200,000

The policy applies in the following scenarios:

• When the driver is logged in and active on the app, it applies as long as the driver is available for trip requests (they do not have to be in transit)
• When en route to pick up a customer
• During an official trip using the app

The policy does not apply if the driver uses the vehicle for personal reasons or while working for another company.

To file a claim, drivers can report the incident to Uber through the "Help" section of the app. Once Uber has confirmed that the driver has purchased the Optional Injury Protection insurance, Uber will inform Atlantic Specialty Insurance Company on the driver's behalf. Drivers can then contact Atlantic Specialty Insurance Company to file a claim or check the status of an existing claim. It is important to note that the claim must be filed within 20 days of the injury.

While Uber's Driver Injury Protection Policy is not workers' compensation, it does provide some financial protection for drivers who are injured while working.

Uber maintains insurance on behalf of drivers

Uber has long argued that its drivers are independent contractors, a classification that exempts them from providing certain benefits to their drivers, including workers' compensation insurance. However, Uber does maintain insurance on behalf of its drivers, which is said to cover them in the event of an accident.

Uber provides its drivers with a commercial insurance policy, the coverage of which varies depending on the driver's activity at the time of the incident. For example, while a customer is in the car, the driver is covered for $1 million for third-party liability. This coverage drops while the driver is on the app but isn't driving a customer. This insurance is meant to cover damages and liability to the customers. It also comes with a large deductible that must be paid before anything else.

Uber also offers its drivers the option to enroll in its Driver Injury Protection Policy, which is not free and is paid for per mile. This policy covers medical bills and other damages due to an accident, including medical expenses of up to $1 million and disability benefits of up to $500 per week in lost wages.

In California, Uber purchases Injury Protection insurance on behalf of its drivers, and in Washington State, rideshare drivers may be eligible for workers' compensation insurance coverage.

While Uber maintains insurance on behalf of its drivers, it is important to note that this is not the same as workers' compensation insurance, and the level of coverage provided depends on various factors, including the driver's activity at the time of the incident and the laws of the state in which the incident occurred.

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