Ten years ago, the foods that naturally came to mind when one thought about calling out for delivery were Chinese and pizza. The cost of hiring a full-time delivery driver often prevented restaurants from offering regular food delivery. Now, food from restaurants at every tier, from McDonald's to the Cheesecake Factory, is being delivered at an astounding rate by several on-demand food delivery services, such as GrubHub, DoorDash, and Uber Eats.
The ride-sharing economy has proven to be very lucrative over the last few years, with companies like Uber and Lyft claiming that their drivers can make over $20,000 a year driving full time. But along with the relatively good income, ride-sharing comes with longer trips and passengers, and high standards on the vehicle being driven. On-demand food delivery services offer an alternative for drivers who want to make money driving but who don't want to take part in ride-sharing, or who drive an older vehicle. Transporting meals, though, requires different insurance coverage than transporting people.
First, let's talk about basic coverage that Uber provides when participating as a ride-sharing driver. While the app is on but before a ride request has been accepted, the driver is covered for their liability to a third party if they are in an at-fault accident. When a driver is on their way to pick up a rider, and while driving that rider to their destination the driver is covered for third party liability coverage, uninsured or underinsured motorist bodily injury coverage, and contingent collision and comprehensive coverage. While using the car for personal use, no coverage is provided through Uber. The ride-sharing economy emerged earlier than the on-demand industry, and the risks are higher.
At the outset of ride-sharing, the Uber policy did not kick in until the driver had a passenger. They have since changed that stance since the standard personal auto policy does not cover using the vehicle as a public or livery conveyance.
An Uber Eats driver will pick up food at a restaurant and deliver the order. Similar to how a regular Uber driver works, an Uber Eats driver can drive around and wait for a request from a particular restaurant looking for a driver. Another option is to wait at a restaurant that has partnered with Uber until they need someone to deliver food. Pay is based on the distance and time traveled. An individual who worked through the breakfast and lunch rush would likely be able to make more money but would be potentially exposing themselves to higher risks driving consistently through some of the busiest hours of the day.
So what about the insurance? Does a driver have the same coverage through Uber as a driver who carries passengers, or is that different? Looking at the standard personal auto policy, the exclusion is for public or livery use, and includes the period of time an insured is logged into a "transportation network platform"(TNC) as a driver, whether or not a passenger is in the vehicle. The policy does not address delivering food. However, the exclusion includes but is not limited to using a vehicle to transport passengers by using a TNC.
So is driving for Uber Eats covered by the auto policy or not? The devil is in the details. The standard personal auto policy defines "transportation network platform" as an online-enabled application or network that connects passengers with drivers using their vehicles for providing pre-arranged transportation for compensation. It says nothing about delivering goods. However, the exclusion is for using the vehicle as a public OR livery conveyance. The next sentence in the exclusion is critical. "This includes but is not limited to any period of time a vehicle is being used by any "insured" who is logged into a "transportation network platform" as a driver, whether or not a passenger is "occupying" the vehicle.
A comma separates the two phrases; the one discussing being logged into a TNC, and the other discussing whether or not a passenger is in the vehicle. Looking at the two clauses it could be taken that livery is excluded because the insured is logged into the TNC. However, the definition of TNC then enters the picture. The TNC is defined as arranging transportation for passengers, not goods. Technically, delivering goods is different, and while the driver is still using a TNC by common definition, the policy definition restricts it to transporting passengers. This could imply coverage. So then we're back to the beginning of the exclusion. Liability arising out of ownership or operation of a vehicle being used as a public or livery conveyance is excluded. Period. But what exactly is using a vehicle as a livery? When you order from Uber Eats or DoorDash, you're ordering from the company, and not an individual driver. You haven't hired John to deliver your food, you've hired DoorDash, and DoorDash assigns a nearby driver to deliver the food. Similar to pizza delivery, you haven't hired Lisa to deliver your pizza, you've called Dominos. The only difference is that someone driving for Uber Eats or DoorDash is that the driver is doing so more consistently than the pizza delivery person is, but not necessarily. The clauses regarding TNCs are for clarification, and to ensure that insureds know that driving for Uber, Lyft, or other ride-sharing platforms is excluded. It does not include food deliveries in the definition so that exclusion does not apply to the delivery of food or other goods. The Uber Eats platform is unclear as to provisions for drivers delivering goods and what if any insurance is provided.
Driving for a ride-sharing or food delivery company will always affect car insurance, and participation in such a program should be reported to the insurer. Carriers may vary as to their wording of exclusions, and it's possible that certain carriers have a specific exclusion for delivery of products. If a driver is in an accident while on duty and attempts to conceal the fact that they were transporting people or food for profit, and the insurer finds out, that driver will be guilty of insurance fraud.
February 2019.