Uber and an unusual pay-by-the-mile auto insurance company have teamed up to make sure that drivers have either personal or company coverage at all times.
The arrangement, which has been approved by state insurance regulators, seeks to close what critics call a "coverage gap" that could leave Uber drivers and passengers, other vehicle occupants and pedestrians unprotected by insurance after an accident.
San Francisco-based Metromile's product will let Uber drivers use their personal insurance for the miles they drive when they are cruising on their own time or waiting to be hooked up with a paying passenger. The combination will make sure that the drivers in their personal cars are covered by either their own policies or an Uber policy any time they are on the road.
As a result, Uber drivers won't have to worry that their personal insurance policies will not cover them because their vehicles are sometimes used for commercial purposes to carry fare-paying passengers, who connect with drivers using an Uber smartphone application.
Uber and Metromile have come up with the ride-sharing industry's "first technology solution" that "strives to provide continuous, seamless insurance coverage for Uber driver partners," the companies said in a statement Wednesday.
California Insurance Commissioner Dave Jones has given Metromile the go-ahead to start marketing the innovative new policy for Uber drivers. He encouraged other insurers to develop similar coverage.
"Our door is open for automobile insurers to propose new products that provide drivers with additional choices," Jones said.
The new Metromile policies will be available for sale to Uber drivers in California, Illinois and Washington state in February.