One of the most pressing questions for those starting ridesharing programs is what they should use for insurance. When ridesharing first came onto the scene, it was a nightmare for both insurance providers and drivers as they were struggling to find proper ways to insure their vehicles. The ridesharing companies themselves, rightly so, cared mostly about insuring liability on their end, ensuring background checks and strict substance and quality controls for their drivers and vehicles. As the industry has evolved, however, creative solutions have arisen. My personal favorite player in the space is Metromile. Metromile's pricing model is very exciting for an Economics-nerd such as myself, paying per-mile above a standard monthly fare.
Metromile's model includes both a monthly fee AND a per-mileage fee
The majority of a person's liability to a company is dependent on their intensity of mileage. This is why insurance companies ask a lot of questions about annual mileage and primary usage of your vehicle. With new technologies, however, Metromile can track your exact mileage. Where beforehand, high mileage drivers were getting away scot-free and low-mileage users were paying too much, Metromile is able to properly charge the risk to each of their riders.
(Remember: Uber is offering $300 to try 40 rides driving for its platform! Try it, quit if you don't like it)
The first question I always get when I sing the praises of Metromile is why a ridesharing driver would use a per-mileage insurance policy: they are the drivers that will put on the most mileage! Uber currently offers a link with Metromile where they will pay for each mile going to or during a pickup. This effectively makes insurance free while using the Uber app. In another article, I laid out my per-mileage costs of $0.18 ($0.13 deprecation and $0.05 gas) which is lessened by the $0.056 above because of this agreement. It may not seem like much but when you are performing small 3-4 mile rides, the total mileage of 5-6 (remember, you need to go pick up the passenger too) saves ~$0.25-$0.30 per short ride. This may seem very small but when your margins are already very low and you may be picking up fares in the $6-$8 range, an extra $0.50 actually amounts to a 5-7% increase per ride!
5 days of ridesharing mileage (2/1 - 2/5 above), 296.9 miles saved = $16.62
There are many other cool features that Metromile has since they have a lot of data and new tracking capabilities compared to traditional insurance companies (I have heard that Progressive's Snapshot tool might transition to similar capabilities). I have received e-mails from Metromile when I have been parked in a restricted parking area, or a street sweeping zone (shoutout to SpotHero), which is nice to be forewarned. They also have ways to budget mileage per month and give daily mileage accruals.
Almost 400 miles on Valentine's Day!
They also have functionality that can show you individual rides and allows you to see your mpg of a given ride as well as your speed during the ride. Overall, the ease of use and the integration with Uber has made me a massive fan of Metromile and I will continue to promote them (this is not a sponsored post - Metromile, hit us up with an affiliate link!)
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