Written By Chris Dolan and Aimee Kirby
This week’s question comes from Arsen from South San Francisco, CA, who asks:
I had been driving for a rideshare company before the laws were changed, and although it was hard during the pandemic, I continued to drive for them. I need clarification about their different insurance options and if it is in my best interest. I know from the internet that other drivers have gotten into accidents, and their insurance policies would not cover the vehicle damage or the claims for their passengers’ injuries. Then, I think the law changed, which made us all independent contractors and provided us with Worker’s Compensation Coverage and other insurance. I have read the links and tried to understand why the insurance would be better than collecting disability and getting some form of emergency Medi-Cal or government-assisted policy through the marketplace.
Dear Arsen,
Thank you for reaching out. I completely understand the frustration of understanding where you stand with various companies. The law you are referring to is Proposition 22 in California. In 2020, a ballot measure was created that allowed Uber, Lyft, and other platforms to classify their workers as independent contractors rather than employees. This was a landmark ballot measure because there are distinctions between employees and independent contractors. Employees have certain rights and protections, like minimum wage requirements and disability benefits. Further, if employees are negligent, their employer would be responsible for their actions. This law was challenged and eventually made it to the California Supreme Court, where it was upheld as constitutional.
Before this law took effect, drivers could argue that they the rideshare companies’ employees; thus, these companies would cover them as drivers if they were involved in an accident. After this law took effect, the rideshare companies reduced the coverage provided to their drivers; under the argument, they are no longer considered employees, and, thus, the companies are not responsible if they get into accidents as independent contractors. Uber now provides $50,000.00 per person and $100,000.00 per accident if you are online and awaiting an assignment on the application platform. They also provide $25,000.00 in vehicle coverage for liability coverage.
Besides liability coverage, the rideshare companies, in applicable states, also created an Optional Injury Protection Program. This program only covers the driver when the driver is operating a vehicle on behalf of Uber. It does not cover medical losses outside of operating the vehicle. This coverage will allow for $500.00 a week in disability payments and coverage of up to a million dollars in medical expenses without deductibles or copays. Additionally, it will provide survivor benefits of up to $150,000.00 for a driver’s family. However, due to various sub-limits of the health coverage for services, many drivers feel that the coverage does not cover much. Further, this optional coverage requires certain reporting requirements by the drivers and the cost deducted from their pay. Therefore, many drivers have opted to seek medical coverage in the marketplace under the Affordable Care Act. I hope this was of some assistance. This area of the law is evolving each day, so it is bound to cause a certain level of confusion.
