Gig Economy Drivers Say Auto Insurance is One of Their Biggest Financial Burdens

More than a quarter of rideshare drivers say that vehicle insurance is one of their biggest financial burdens, and 25% say insurance is too expensive.

Those are among the results from a survey of Americans who drive for on-demand rideshare and delivery apps like Uber and DoorDash conducted by INSHUR, an insurance provider to the on-demand economy.

The survey is a deep dive into what the on-demand economy looks like for drivers and their attitudes towards insurance.

Other findings in the survey include:

• 26% of drivers say that on-demand platforms should make efforts to offer better pricing for insurance to their drivers, and 25% say they should also offer help with buying insurance.
• 10% of female drivers say that over half of their earnings from driving go towards vehicle insurance.
• 31% of drivers say that driving offers better pay than other work available to them.
• In the cities where driving hours have increased the most in a year, New York City (37%) and Dallas (25%), drivers are most likely to look to platforms to provide financial aid and consultation as well as training.

The results of the survey show that with more than 1.5 million active Uber drivers and more than 1 million DoorDash couriers in the U.S., the need for tailored insurance solutions is becoming a critical issue for these workers.

According to a recent survey by Statista, roughly 36% of U.S. workers are engaged in gig work, which includes driving for ridesharing and delivery services. This shift toward flexible employment has introduced unique challenges, particularly regarding insurance. Traditional personal auto insurance policies often exclude coverage for commercial activities, leaving many drivers vulnerable to financial risks.

Data from the Insurance Information Institute shows that nearly 68% of gig workers report having inadequate insurance coverage while driving for on-demand services. This gap is concerning, especially given that a report from the National Highway Traffic Safety Administration revealed that rideshare drivers are involved in accidents at a rate of 3.5 per 1,000 drivers annually, compared with 1.5 for the general driving population.

In response to the pressing need, both Uber and DoorDash have developed insurance products tailored specifically for their drivers. These offerings aim to fill the gaps in coverage that many gig workers face.

• Coverage types: Uber provides drivers with liability coverage of up to $1 million, as well as collision and comprehensive coverage during rides. DoorDash offers similar coverage, including liability insurance while drivers are on the job.
• Integration and convenience: A survey conducted by The Rideshare Guy found that 65% of drivers prefer purchasing insurance directly through their driving app due to its convenience.
• Cost-Effectiveness: According to data from the National Association of Insurance Commissioners, app-based insurance options can be more affordable, with some drivers reporting savings of up to 30% compared to traditional policies.

Feedback from drivers underscores the effectiveness of these insurance services. A survey by Rideshare Central revealed that 78% of drivers who use app-based insurance felt more secure knowing they were covered during their work.

As the gig economy expands, the demand for comprehensive and flexible insurance solutions will likely continue to grow. The potential for new companies entering this space is significant. A report by McKinsey estimates that the gig economy could represent a $455 billion market by 2023, driving further innovation in insurance products tailored to this workforce.