Uber’s Workers’ Comp Pilot Program May Drive Others to Follow

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By Tyrone Richardson

A pilot program offering some Uber drivers workers’ compensation benefits could be mirrored by other gig economy platforms, insurers and industry observers told Bloomberg BNA May 12.

The ride-share platform this week teamed with insurers OneBeacon and Aon to launch a driver injury protection insurance program in eight states. The optional protection, which costs drivers 3.75 cents per mile and riders an extra 5 cents per mile, offers $1 million maximum coverage of medical expenses and weekly earnings due to a work-related accident.

For now, coverage is available in Arizona, Delaware, Illinois, Massachusetts, Oklahoma, Pennsylvania, South Carolina and West Virginia. That could expand to more states as Uber sees the results of its pilot program, company spokesman Michael Amodeo told Bloomberg BNA.

The program resembles other benefits proposals already being considered for on-demand workers. “Gig” economy workers are often treated as independent contractors who usually aren’t offered benefits and don’t get minimum wage, overtime and workers’ compensation protections.

Gig businesses have been reluctant to offer benefits, at least partly because they fear it would make courts and regulatory agencies more likely to find that contractors should be classified as employees.

Some Could Mirror Concept

The National Employment Law Project, which advocates for workers, criticized Uber for passing along the cost of the benefit to drivers and consumers. But the concept is expected to drive other on-demand platforms to launch similar plans.

“This is just one step further into how the gig economy and independent contractors are needing to establish ways to take care of themselves,” Gene Zaino, president of MBO Partners, which provides business services to independent contractors, told Bloomberg BNA. There are more and more ideas in the pipeline, he said.Aon spokeswoman Donna Mirandola told Bloomberg BNA that there “are other gig economy platforms looking” to offer insurance protections, adding that she was “unable to disclose information at the moment.”

Uber’s concept comes as Congress and state lawmakers are considering legislation that could provide workers with portable benefits such as insurance, retirement and other benefits. The concept, which would follow a worker from job to job, could largely resemble the building trades unions in the 1950s when carpenters worked for multiple contractors.

Gig Economy Businesses Considering Measures

Adrian Durbin, spokesman for ride-share platform Lyft, told Bloomberg BNA May 11 that the company welcomes new innovations for drivers to gain insurance protections.

“We are looking into a number of possibilities but don’t currently have something precisely like this,” he said, referring to the Uber concept.

Such a plan could be hard to mirror, according to Natalie Foster, a fellow at the Aspen Institute’s Future of Work Initiative. “In general, companies tell us that it is hard to provide in the context of the independent contractor relationship,” she said.

Foster cited the online cleaning site Handy’s, which says on its website that “as an independent contractor, you are not eligible for workers’ compensation,” according to the site. “Because your health and safety should be your highest priority, we recommend you secure insurance for yourself as a precaution.”

Handy is one of the gig economy businesses talking with New York state lawmakers about possible legislation that would provide workers with portable benefits. The bill would also update the legal line between independent contractors and employees.

Workers’ Comp Concepts Exist

The Uber driver insurance program resembles plans already in place for other workers.

That includes the Black Car Fund, a nonprofit organization created in 1999 to provide wages and medical benefits for black car and limousine drivers injured on the job in New York. The protection is paid by a fee added to the ride fare.

Other gig economy platforms offer some similar protections. That includes delivery platform Postmates.

The company offers its independent contracts free protections such as up to $1 million in general liability insurance for its bike couriers. Postmates offers its independent contractors free protections such as up to $1 million in general liability insurance for those on bikes impacting third parties, and auto excess insurance for those using automobiles, according to Vikrum Aiyer director of policy and strategic communications for Postmates.

“That’s on par with industry standards within the on-demand space,” he said to Bloomberg BNA.

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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