New York, NY (WorkersCompensation.com) – Despite rolling out a pilot program to cover its drivers in case of injury, critics say the plan can’t be called workers’ compensation.
In fact, even the insurance documents say the program isn’t workers’ compensation.
In May, ride-sharing service Uber started offering its drivers a voluntary insurance policy to cover them in case of injury on the job. As reported in WorkersCompensation.com, the pilot program was offered in eight states, provides drivers with a personal injury policy, paid for by drivers at a cost of 3.75 cents per mile.
The insurance pays out up to $1 million for medical expenses, up to half of a driver’s average weekly earnings and a maximum of $150,000 in survivor benefits.
"We believe drivers should have a low-cost option to protect themselves and their families against rare and unforeseen accidents that prevent them from working," Gus Fuldner, head of safety and insurance for Uber said in an interview with Buzzfeed at the time.
The US Department of Labor’s Bureau of Labor Statistics labels taxi driver as one of the ten most dangerous jobs in the country. Taxi drivers, like Uber drivers, are twice as likely to die on the job as police officers, bureau statistics show.
But critics say the plan isn’t anything like workers’ compensation.
The insurance policies, part of a partnership between Uber, OneBeacon and Aon, are optional and are paid for by the employees. In workers’ compensation, the insurance policies are required by law in all states and are paid for by employers.
In an article, The Intercept provided a copy of an Uber insurance policy to experts. Those experts said the policies fall far short of workers’ compensation. In fact, the policy itself said “THIS INSURANCE IS NOT WORKERS’ COMPENSATION INSURANCE” on its cover.
There are other differences over traditional workers’ compensation policies. In an article on The Intercept, a comparison of Uber’s policy with traditional workers’ compensation found that Uber’s policies are a step down in terms of quality, said Michael Gruber, president of the Workers’ Injury Law and Advocacy Group.
Gruber said that in some states, workers’ compensation can pay out two-thirds of a workers’ salary when an employee is too injured to return to work, while the Uber policy maxes out at half of a driver’s average weekly earnings.
The policy doesn’t cover mental health and trauma, nor permanent partial disability, experts said. Additionally, the policy doesn’t cover a driver who is on the clock, but has not yet gotten a fare.
Another difference is that Uber’s policy appears to require drivers to submit to binding arbitration, instead of having their claims adjudicated by a State Board. In fact, the policies explicitly deny Uber drivers’ rights to have their claims heard by a workers’ compensation board, or to sue or join in a class-action lawsuit, according to the Intercept article.
Because Uber identifies its drivers as contractors instead of employees, the company is not required to provide them with workers’ compensation coverage in most cases. In New York, the company is required to cover its drivers as “Black Car Drivers,” eligible for a form of workers’ compensation funded by state-wide surcharge on fares. Last month, Uber admitted it had been taking a portion of that surcharge, as well as other fees and commissions, essentially underpaying its drivers by hundreds of millions of dollars, according to the New York Times.
Uber said the policies are just right for their contractors.
“Driver injury protection provides people who drive with Uber a low-cost option to protect themselves and their families against unforeseen accidents that prevent them from working,” an Uber spokesman said in an email. “The product is specifically tailored to fit the flexible nature of ridesharing and provides access to coverage that was previously cost prohibitive or administratively difficult for drivers to access on their own.”
Worker advocacy groups said Uber should focus on treating its drivers like employees instead of finding work-arounds.
“We don’t think that Uber’s personal injury plans meet workers’ compensation standards,” said Rebecca Smith, deputy director of the National Employment Law Project, in an email interview with WorkersCompensation.com. “First, states that are looking at Uber’s relationship with drivers are finding that it is an ‘employer,’ subject to workers’ compensation laws. These include Oregon …and Alaska… Second, it appears that Uber is charging customers for this coverage, and it’s not clear whether Uber might also be making a profit off of the programs. Finally, in the two states we have looked at — MA and PA — the system isn’t as comprehensive as state workers’ comp. We think that Uber should just pay its share of payroll taxes and cover its workers.”
While Uber charges drivers 3.75 cents per mile for the voluntary policy, it has also raised its prices by 5 cents a mile to help pay for the policy.
Alan Pierce, immediate past president of WILG, said that while the policies raise concerns, they are better than nothing.
“Certain concerns do need to be addressed,” Pierce said in an email interview with WorkersCompensation.com. “What exactly are the wage loss benefits? Does the driver have a choice of physician? What type of state or governmental oversight would be available to make sure such a plan is fairly administered? How would disputes be resolved? Should not the cost of such plans be paid for by Uber rather than the driver? Since many Uber drivers hold other jobs and those lost earnings would be covered under a workers’ compensation program, would Uber’s policy also cover the entire wage loss or just the Uber portion?”
Noting that many states’ workers’ compensation programs are inadequate for workers’ needs, Pierce said the policies were a step in the right direction for Uber’s drivers.
“Insofar as Uber drivers (or as they are referred to by Uber as ‘driver-partners’) are not eligible for traditional workers’ compensation coverage, this type of personal injury policy is an improvement filling the void,” he said. “I, and most attorneys versed in the field of job related injuries, would rather see the state workers’ compensation definition of ‘employee’ broadened to include members of the so called gig economy — giving these workers the same rights and benefits of the more traditional employee. This is preferable than a possible myriad of hybrid quasi workers’ compensation policies lacking consistency and due process considerations.”
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