This is a transcript of Episode 21: New Rideshare Insurance Requirements, Employee Rulings and 1 Year Site Anniversary. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.
Man: Welcome to the Rideshare Guy podcast, the site that’s dedicated to helping drivers earn more money by working smarter, not harder. So whether you drive for Lyft, Uber, Sidecar, or anything in between, we’ve got you covered. And now here’s your host, Harry Campbell.
Harry: Hey, what’s up, everybody? How are you doing? Welcome to Episode 21 of the Rideshare Guy podcast. I’m excited to have you here today, and today it’s actually gonna be just me and you. We’re not gonna have any guest today. We’re gonna cover a few of the current events that are going on in rideshare right now that have to do with some insurance requirements, new employee rulings that are going on, and I’m gonna give you guys a little update on the site since we just had our one-year site anniversary.
So I haven’t done one of these podcasts in a while where it’s just been me talking and no guest, so hopefully you guys won’t get bored, you can make it through till the end, and I’m definitely working on lining up a couple great guests. So stay tuned for future episodes. If there’s anyone you wanna hear or anyone you want me to interview, definitely let me know.
And speaking of guests, one of the best ways to help me attract more higher- and higher-profile guests and different guests and people that I can interview in the industry is to leave a review on iTunes. So the more five-star reviews we get, the better we look, and then it also helps us reach more people. So definitely thanks to everyone that’s left a five-star review on iTunes. It looks like we’re up to 48 five-star reviews, so almost at 50, which is awesome.
And I just want to give a quick shout out, quick thanks to a few recent reviewers who left us five-star reviews in iTunes. So thanks to Laker-Fish, iamsaltlake, Brandon McLaughlin, Data driven podcast!, and Ktc.713. So you guys can all leave a link in the show notes, if you guys wanna hop on to iTunes or you can always go to the rideshareguy.com/itunes and that will take you right to the podcast in iTunes where you can download episodes or listen to the show.
So today’s show is gonna actually be about some current events that are going on and what they mean for drivers. So we’re gonna tackle some insurance issues. There are a couple of new requirements in California that is definitely big news and then also just to clarify some insurance policies and what Uber and Lyft’s policies are because there’s a few questions that I’ve been getting over and over. And even though a whole lot hasn’t changed in the year since I have recorded my podcast on insurance and then written a few articles, there’s still a lot of new drivers and a lot of people who just frankly probably haven’t done research into the insurance aspect side of things, so I’m definitely gonna clear all that up.
And then I’m also gonna go and talk about some of the new rulings that have come out lately on employees and independent contractor and I’ve written a couple of articles on things like dependent contractors and basically what it all means for drivers. So that’s definitely gonna be interesting and stay tuned for that.
And then finally, I’m gonna give you guys a little update on the site, a quick one-year update. So share with you guys a few cool stats, tell you a little bit about what I’ve been doing, what’s going on on the site, how I’m making money, all that kind of fun stuff. So definitely stay tuned till the end for that.
And I wanna give another quick thanks to everyone who used YourMechanic last month. As you guys know, they’re one of my big . . . well, one of my really only advertising partners on the podcast and on the blog. And last month, they let me know that I actually referred and booked over 100 people and sent them appointment. One hundred people booked appointments with YourMechanic last month which is awesome. It’s a great number. They’re expanding all over the country and they’re providing great service, so I definitely enjoy hearing that you guys are signing up and giving me good feedback on them. If you have any negative, positive, anything, just let me know and I’ll be sure to look into it for you. I have yet to hear a complaint about them, so I’d say that’s definitely a good thing.
And for me it’s great finding partners who are a great deal for drivers and great to work with. So I definitely think you guys should check them out. I think right now they’re even giving out five free oil changes for your friends and family after you do your first service with them, so that’s a pretty cool feature that they have. You can also take a look at . . . I’ll leave a link in the show notes, you can take a look. They just expanded to four new cities, Detroit, Chicago, Boston, and Pittsburgh, and then they’re all over the country.
So other than that though, this episode and show notes can be found at therideshareguy.com/episode21. And before we get started with the podcast, I just wanna let you know that I have a nice little surprise for you at the very end of the podcast. After we’re done talking about all these cool issues and all this important stuff, I’m actually gonna share a new Rideshare Guy jingle that one of my readers, one of our listeners, made for me and I’ll give you guys a quick little rundown, a quick little story about how that happened at the end. I think it’s pretty catchy and you guys may just find yourself singing it after you hear it so definitely stay tuned till the end. So without further ado, let’s get started.
So it’s been a while since I’ve covered any type of in-depth insurance issues on the podcast. And to be honest, about a year ago, when I recorded my big podcast on Everything You Need to Know About Rideshare Insurance, that episode took a lot out of me. So what I mean by that is that I spent a lot of time researching, checking out the very specific details of Uber, Lyft, and Sidecar’s policies, and basically just doing a lot of research. And I’m almost embarrassed at how much time I spent researching and learning about how rideshare insurance works.
Fortunately for you guys, I explained it all pretty concisely, I think, and then in a few articles since then. So definitely take a look back or listen and check those out because in the past year, not a whole lot has changed in regards to rideshare insurance. I’m gonna share with you guys a few numbers from some surveys I’ve done but for now, what you really need to know is that rideshare insurance is still somewhat of an issue for drivers.
Now, the most important thing I think that you guys, if you’re out there listening right now, you have to be a little bit willing to look into it because I think a lot of drivers kind of just assume that it’s all worked out or that they won’t need insurance or that they’re not gonna worry about it until they get into an accident. And unfortunately, I think that’s a really . . . probably not the right approach that you want to take, because I mean the whole point of insurance is to protect against the things that are unlikely to happen or unreasonable or a low probability of happening. But when they do happen, you definitely want to be ready and you want to make sure that you’re not risking personal assets or anything that you weren’t aware that you’re risking.
So if you guys are out there looking for a rideshare-friendly policy, a personal insurance agent who’s gonna insure you as a rideshare driver, that’s probably the first step that I would look for. If you’re a new driver, if you’re someone who says, “Hey, I don’t wanna have to deal with anything, I just wanna go and get a policy that works, one that where I know that I’ll be covered by my personal insurer, there won’t any gaps, I won’t have to lie to my insurance company,” luckily you guys are starting to have some options.
Now, not every driver in every state has options right now but I’ve been working pretty hard. I have a new page on my site that I’ll linked to, and it’s right there. You can access it from the main menu or I’ll put a link in the show notes. And basically, in that post, I call it Rideshare Insurance Options for Drivers. And I used to have this big . . . and I’m not gonna say fancy . . . spreadsheet but it was a big spreadsheet of insurance companies basically by state. You guys may have seen it before and unfortunately, it was not the best organized and it wasn’t super clear and not very concise.
So over the past few weeks, I spent a lot of time reworking that spreadsheet into a post, into a page on my site that I’m now gonna keep updated. And I put a nice little drop-down menu which basically allows you to select your state. And so if you’re in California, for example, you’ll go through . . . I don’t have all 50 states. I only have the states where rideshare insurance options exists and you can go through that, select your state, and then it will give you a quick update on what’s going on in your state. It will say, “Hey, you now have Farmers, you now have USAA,” whatever insurance companies are now available in your state, I’m gonna keep that page updated for you guys so you have a nice quick resource where you can go. If there are states that are adding insurers and I haven’t updated yet, I have a nice little comment section where you can leave a comment below and let me know or e-mail me and I’ll look into it.
So I also have a cool feature on there where I have a bunch of recommended agents. Well, not a bunch. We have a few up there and not for every state. But these are agents who . . . basically the problem I was finding was that a lot of drivers, let’s say, “Hey, okay, Harry is saying Farmers will work in California.” Now, I’m gonna go call a Farmers agent and then they would call the agent and the agent would have no idea what they’re talking about. They’d say, “Rideshare, oh no, we don’t insure that,” or they didn’t know how to write the policy, and it was kind of a waste of time for everyone. So what we did was we basically saw that some of these agents just had no idea what they were talking about, maybe they weren’t vetted, so we looked and went out and reached out to drivers and asked them, “Hey, who do you guys recommend, who have you used to create a rideshare policy?” We spoke with these agents to ensure that they know what they’re doing. And so that’s how we have listed right down that page.
So if you see any agents recommended for us, we haven’t run thorough background checks or anything like that but we Googled their name, we searched about them, make sure that they’re legit, we’ve spoken with them over the phone to make sure they understand what rideshare drivers need, and so these are all agents that you can call if you have no idea what’s going on. These agents will understand. They’ll be able to clearly and concisely explain exactly what type of policy you need and they’ll be able to help you out, more importantly. So if you have any feedback on those agents or agents you want to recommend to us, definitely reach out. We’re actually adding options by the week, so if you have any updates or if you have new companies or anyone that you think we should know about, definitely reach out to us.
So really what I want to focus on with this part of the podcast is the current state of rideshare insurance. What’s going on right now? What do drivers need to know? Where are they at risk? How can they minimize their risk without spending money or without spending too much money? And basically we would just help ensure that you guys are informed, because I’ve seen some communications come out from Uber and other sites, and I just want to clear everything up and tell you what I think, what you need to know. And maybe there’s some additional research or some additional work that you guys might need to go out and do. Because insurance, it’s not the most sexy topic, but it is super important. Because the potential implications are huge if something does happen. So you want to make sure that you are at least aware of the situation and prepared in the off chance that something happens.
So what’s going on right now? And what I think is going on right now is a lot of drivers are still on their personal policies. So what I mean by that is a lot of drivers are still using policies through maybe a big insurer like GEICO or State Farm where they may have had these policies already in place before they became a driver or they have policies that basically they’re probably not allowed to actually be rideshare drivers. Because there’s these clauses in nearly every personal auto insurance policy that says your car can’t be used for livery and that’s basically what rideshare is, it’s what Uber and Lyft are.
So that’s kind of what’s going on right now. And I actually ran a poll on my site recently and I asked people, “Hey, do you guys have a rideshare-specific insurance policy?” And I got over a couple hundred responses, so plenty of responses. And I was pretty sure I already knew the answer because I ran a similar poll back in January and I think 80% or 90% of the people that responded, they said no. This time, I got a little more specific with the answers. I let people vote on whether yes, they did have a rideshare insurance policy, no, but they wanted one, and no, and I don’t plan on getting one. So the results of the survey were pretty interesting, about in line with what I thought, and 10% of you said yes, that you do have a rideshare insurance policy, 70% said no, but you want one, and then 20% said no and I don’t plan on getting one.
So what I would take away from that survey is 90% of drivers still don’t have rideshare insurance policies. Now obviously that situation isn’t ideal because there are certain risks and certain liabilities that are associated with not having a rideshare insurance policy. And I’ll definitely get into that and cover that so you guys know what those risks are, but that’s kind of the situation right now. And I think the 20% of people “no and I don’t plan on getting one,” I think a lot of those people are probably okay with the risk and maybe they are ones who have done the research or are okay with lying to their insurance company, which I’ll get into a little more. But 70% of you, a majority, said no but I want one.
And I think that hopefully . . . my hope has been all along that these insurance companies will really realize that there’s this huge market, that there’s hundreds of thousands of drivers, 90% of them don’t have rideshare insurance polices, 70% of them want insurance policies. So that’s hundreds of thousands of policies at stake. And I really think that . . . my hope is that more and more of these companies will start offering options for drivers. And we’re already starting to see that, which I’ll definitely get into, but that’s kind of the poll that I ran on my site.
And I think that while most drivers are on their personal policy still, they may not realize why this is a problem and I’ve covered this before. I wrote a huge article and I called it “Rideshare Insurance, the White Lie of Rideshare Insurance,” basically. And the problem is, if you’re on a personal policy, is that if you do get into an accident or if there’s some instance comes up where you do have to make a claim with your personal insurer and they ask you if you’re a rideshare driver, you could potentially get dropped. And at that point, it gets a little bit murky where do you wanna lie to them. Obviously you probably don’t wanna lie to your insurance company. I don’t know if that’s legal or illegal, but I would have to guess that it’s illegal, and so that’s kind of where things get a little murky as far as insurance. And the real risk is when you do have to go and make a claim.
Let’s say there’s 90% of drivers out there who haven’t told their insurance company that they’re a rideshare driver. Your company isn’t gonna go and call you one day and say, “Hey, are you driving for Uber?” The risk comes into play when you go and need to, I don’t know, for whatever reason, meet with them and renew your policy. Or if you get into an actual accident, most people don’t even realize even right now with certain, some of the top companies, if you get into an accident and you’re not rideshare driving, they’ll still ask you. That’s just their standard question now. They say, “Hey, have you ever used your car for business?” or “Have you ever used it to drive for Uber and Lyft?” And that’s when things get a little murky.
So there’s a real risk that you could get dropped from your personal insurance policy. And I think that that’s the biggest thing that you have to take into account right now as rideshare drivers is are you okay with getting dropped and are there other options in your state if you do get dropped. Let’s say you’re in California and you know that you have Farmers but you’re with GEICO. If you don’t wanna switch, if something comes up and you get into an accident, you have to make a claim, now are you gonna be okay with switching. Because a lot of people have their auto insurance policies tied in with home or with other owners of vehicles of their cars. So it’s definitely a hassle. It’s not easy to just switch your insurance.
So right now, I wanna get into a little bit of the specifics of what type of coverage you have during which Periods. Now, Period 1, 2, and 3 might be some terms that you guys have heard thrown around. And I’m gonna give you a quick summary of what they mean and also more importantly, what type of coverage you have during those times.
So with Uber, right now, during Periods 2 and 3, the coverage is not a problem during Periods 2 and 3. So let’s start with Period 1. Period 1 starts when you have the app on, right. If you’re just driving around . . . that’s, I guess you would call it Period 0, right. Let’s say you’re just driving around, driving to the store, driving your friends around, whatever, that’s Period 0. Your personal insurance will cover you, no problem, no questions asked, right. Now, Period 1 happens when you turn the app on but you’re waiting for a request. Now, this we’d call the insurance gap period which I’ll go into in a second, but all you need to know is that it’s when the app is on but you have no passenger. So you could have the Uber app on and you’re sitting there or maybe you’re driving around, looking for request or waiting for a request, which I usually don’t recommend. You probably shouldn’t be driving around but maybe you have to make a quick move.
And then Period 2 actually happens once you’ve accepted a ride and then you’re en route to the passenger. So that’s what you guys need to know about Period 2, okay. Now, Period 3 actually begins as soon as you get to the passenger and begin the trip. So what’s interesting, though, is that where a lot of people get tripped up is Period 2 and Period 3 actually have the same coverage.
So with Uber, they give you $1 million liability, $1 million uninsured/underinsured motorist injury, contingent collision, and comprehensive. So what that means, that contingent collision, it still means that you may have to make a claim with your personal insurer during that Period 2 or Period 3, and Period 3 will actually end once the rider exits the vehicle. And once Period 3 is over, as long as you go back online, you’re now back into Period 1 again.
Now from what I’ve heard if drivers are getting into accidents in Period 2 or Period 3, Uber hasn’t been making drivers make a claim with their personal auto insurer even though technically, since they are providing contingent collision, you should. So that’s been a little point of confusion and I can’t confirm one way or the other, but from what I’ve heard from drivers is that if they’ve gotten into an accident during Period 2 or Period 3 while driving for Uber, they’ve been able to just deal with Uber, they haven’t had to deal with their personal insurer at all and they’ve been able to get coverage.
Now, the coverage is pretty good during this Period 2 and Period 3 since it is $1 million liability, $1 million uninsured/underinsured, and then the contingent collision and comprehensive. Now where you have to watch out though with that collision, there’s actually a $1,000 deductible. Now with Uber, it’s $1,000 and with Lyft, it’s actually $2,500, which I think is absurdly high. It should be a lot lower. Most deductibles you wanna have in the $500 to $1,000 range, so that’s pretty important.
You guys definitely need to be aware of those deductibles because if you don’t have that money saved up, when you get into an accident and you report it to Uber, your account is automatically deactivated until you get your car fixed. So you won’t be able to work, you won’t be able to make money until you can pay that deductible and get your car fixed. So I know a lot of drivers have had problems with this in the past because they didn’t realize that they had to pay a deductible or they didn’t realize that they wouldn’t be able to work in order to make the money to pay that deductible. So that’s definitely something you guys need to consider, you need to be aware of.
Now Period 1, the biggest problem with Period 1 is even though the coverage limits are a bit lower, now Period 1 is times when you might be sitting there or you might be making a short move so the insurance provided to you by Uber is liability $50,000 per injury, $100,000 total, $30,000 for property, and $200,000 excess liability. Now you’ll notice I didn’t say anything about collision and that’s really where the biggest problem is during that Period 1, there’s no collision coverage available. So it’s not an excess, basically it’s not provided at all. So during that Period 1, you could potentially not get any collision coverage if you were to get into an accident, and that’s really where the biggest risk is.
And that’s where these rideshare-friendly policies come in handy. Because during Period 1, let’s say you’re just sitting there and you hit someone and get into a collision that way or you’re driving around, you’re just moving your car a very short distance, which is obviously it’s a lot less likely that you’ll get into an accident during that Period 1 compared to 2 and 3, but still, it’s a possibility. And during Period 1, that’s where these rideshare-friendly policies that are being offered by companies across the country and the list that I have on my site, that’s where these policies come in handy because they’ll actually cover you completely during Period 1. They’ll provide the liability, they’ll provide the collision at basically the same rates as if you weren’t driving for Uber. So that’s why you’re seeing maybe 6% to 8% increase in premiums because they’re gonna now cover you during that Period 1.
So I think the odds or probability of you getting into an accident during that time, especially if you don’t drive around much, are very, very low, but you still need to understand that there is a risk that you won’t be covered for collision during that period by Uber. So if I had to give an overview of the current state of insurance for drivers and what they need to know, that’s what it would be, knowing that risk of being dropped by your auto insurer and then knowing that there’s really no collision coverage during Period 1.
Now the last thing I wanna talk about in regards to insurance is Uber’s new update for California drivers. Now even if you’re not in California, this may be important and you probably wanna listen to this because it will likely apply to you at some point. A very similar law was passed in Colorado and Uber implemented a strategy there. And then they came to California, which is obviously rideshare’s biggest state. I think there’s over 100,000 drivers right now. Thirty-five percent of my audience comes from California, so I know that this will definitely be relevant to the thousands, if not more, of my listeners and readers.
So basically Uber sent out this e-mail and they talked about a July 1 deadline. Now what happens was beginning July 1, 2015, there’s a new law in California and it’s going to go into effect on July 1, 2015. Basically, under this new law, your personal auto insurance, it no longer applies while you’re logged in to ridesharing apps. So if you have one of these regular policies with whoever and you get into an accident during that Period 1 time, even though they wouldn’t cover you before, now it’s basically a law that they can’t cover you.
So the only exception is if you purchase specific insurance for ridesharing. So for example, in California, Farmers offers these rideshare-specific policies. So the only way you can be covered now during Period 1 . . . So if you go and tell your insurance company, “Hey, I was driving for Uber. I had no passenger in the car,” they can’t legally cover you anymore. That’s basically what this law is saying.
Now it’s a little bit tricky because that’s kind of how the situation was before. And what Uber has gone out and done is in order to protect drivers . . . well, I would say protect . . . but in order to satisfy this law, they’re basically updating their liability insurance that they maintain on your behalf. Now basically what they did is they changed the liability insurance. It used to be in excess during Period 1, which means that you would have had to make a claim with your personal insurer first. If they denied it, which they likely would, and they might probably even drop you if you make a claim during that Period 1 for liability, then they would come in and then they would cover you.
So basically this new law, it doesn’t really affect your ability to drive with Uber but it’s pretty important to understand. And it really only affects the period of time when you’re logged in to the Uber partner app during Period 1, right. So there’s no changes at all to Period 2 or Period 3. And really I would almost say that the coverage that they’re offering basically just went from being an excess during Period 1 to primary during Period 1. And that’s really all that you need to know about this law in California.
The funny thing is, though, that before, if you were to make a claim with your personal insurer and tell them you’re an Uber driver during Period 1, they likely wouldn’t have covered it. And now it’s basically a law that’s saying the same thing. So I think a lot of drivers might be confused by this because Uber sent out this extremely confusing e-mail that made it seem like, “Hey, you don’t need to go and get rideshare-friendly insurance anymore.” But to me, I read this e-mail and say, “Hey, Uber still isn’t covering you during collision during Period 1.” They said before that your personal insurer wouldn’t cover you and they would cover you in excess. Now, they’re saying they’ll cover you primary, but there’s still no collision coverage, period. There’s no collision coverage during Period 1 before and there’s still no collision coverage, not even in excess during Period 1 right now.
So for me, the risk is really still exactly the same before this law and after this law. Basically what Uber did was just kind of some fancy words and manipulating their policies in order to comply with this new law. But what drivers need to know is that right now . . . So after July 1, 2015 in California, nothing has really changed for you. If you go out and let’s say you have a policy that is not rideshare-friendly, let’s say you’re with GEICO in California, for example, and you go out and you get into an accident during Period 1, Uber will cover you for the liability portion which they would have had to do before because if you make a claim with GEICO, they’re not gonna cover it and so Uber would step in.
Now Uber is basically saying, “Hey, you don’t have to make a claim for the liability portion, we’ll just cover it.” But the problem is when you get into an accident, you generally have a collision, right. That’s what the collision part of your insurance is for. So now you’re still not receiving any collision coverage. So that’s what you need to understand about that Period 1.
So I think that these policies and laws are stepping in the right direction, but we’re still not quite all the way there. And it’s definitely frustrating for drivers, because it took a lot of time . . . I think I spent an hour just reading this e-mail from Uber and seeing what other people were saying and making sure that I was interpreting right because it’s confusing. So if you’re a driver out there, let’s say you’re in California and you’re considering, “Hey, do I need rideshare insurance?” I think that what you want to understand is that there’s still no collision coverage during Period 1. Period 2 and 3 I think are pretty much solved.
You may still have a little anxiety or a little angst because you might be with a policy that doesn’t cover, just doesn’t want you to be a rideshare driver, period. But during that Period 1 is still a little bit of a problem, we call that the Insurance Gap Period, because basically personal insurers don’t wanna cover you unless you’re paying them some type of premium. So I’ll actually be getting a quote with Farmers to test it out and we have a few agents on our site that we recommend that you can go and take a look and see what your quote comes in at. And what you need to know if you’re in California is basically that these new policies and these new laws are sort of meant to protect you but there’s still this problem of collision during Period 1.
So hopefully that clears things up for you guys. I think that definitely going forward, I predicted at the beginning of the year that there’s gonna be more options, and I think we’re starting to see more and more carriers . . . big carriers, too, USAA and GEICO . . . start to offer insurance-friendly polices. Now the big problem, though, is that insurance is a state-by-state matter. So you might have Farmers in California but you might not have Farmers in Florida or Texas, right, and you might have USAA in Texas but not in California. So that’s kind of the goal of my site and the resource that I’m trying to provide with the insurance options page for drivers. So you guys can log on quickly, see what options you have, and hopefully as the year goes on and as the years go on, there’ll be more and more options for drivers so that you guys don’t have to live with this ambiguity.
All right. So we’ve talked a bunch of insurance stuff so far. Hopefully it wasn’t too boring. Now if you guys have been paying any attention at all to the news lately, you’ve probably seen that there have been a ton of articles and a ton of stories about this latest Uber employee ruling. So right now I wanna take a few minutes and summarize everything that I’ve learned while doing my research and talking to people, talking to drivers, talking to reporters, and basically help you guys understand what this latest ruling means, what it means for drivers and how it might affect you going forward.
So I’ve been doing a lot of research into this topic. And for those of you guys who don’t know, there was a case with a driver named Barbara Ann Berwick who basically, she was an Uber driver back in 2014 and I guess at some point in 2015, she basically decided to go to a Board called the California Labor Commission and argue that she was an employee. Now, if she were to be ruled employee, she basically would be allowed to get back pay for things like mileage and expenses and all of that stuff that normal companies would reimburse their employees for.
So what happened with the case was that she actually ended up winning the case. The California Labor Board ruled in her favor and said that she earned $4,000 or $5,000, so that was basically her bonus, right, for all of her expenses and things like that. So it wasn’t a ton of money. I think it came into the ruling order that Uber pay Berwick $4,152, something like that. So basically those are all the expenses that she accrued from spending eight weeks as a driver. And even though this ruling was made on June 3, it actually came to light a couple of weeks later because Uber appealed the judgment. And on that day, two weeks later, that’s when you saw all the news stories and that’s when you saw, I don’t know, hundreds of articles about employees and contractors, and probably when you started to get overwhelmed.
So what you guys need to know is that this ruling actually only applied to Berwick and she’s a driver in California, right. And although it technically isn’t binding, which means that it won’t apply to other drivers in California . . . And that’s the other thing to keep in mind, these rulings are all right now, since this case is going on in California, it’s only applicable or it only is potentially applicable to drivers in California.
Now Uber released a statement that said that this judgment that they’re already appealing was non-binding, which basically means it only applies to this one driver. So if another driver wanted to bring up a lawsuit, they would have to go and do a completely separate case. They couldn’t use any of the facts or any of the judgments from this case. Now there are a couple of good breakdowns of this case that I can definitely link to if you guys wanna read more.
And basically what you need to know is that this outcome really only affected one driver, but it obviously holds huge implications for the industry because not only Uber but Lyft and Postmates and Instacart and all of these on-demand companies use this independent contractor model. Although Instacart did come out last week and say that they were testing out using employees, using the part-time employee model for some of their grocery shoppers, so not the delivery drivers but the people who actually find and shop for their groceries.
But either way, there’s a pretty big lawsuit right now in California that you guys might have heard of being headed up against Uber by Shannon Liss-Riordan, I think is how you say her name. And basically I can read you the description from the website, but it says, “Uber drivers have filed a class action lawsuit claiming that they have been misclassified as independent contractors and are entitled to be reimbursed for their expenses that Uber should have to pay, like for gas and vehicle maintenance.” So it’s basically they’re now suing for the exact same thing that this one driver went to the California Labor Board for.
Now I think that the Judge at the pretrial hearing basically he indicated that it seemed like Uber was a lot more employer than independent contractor model. So that’s kind of got things in motion and then in August, it’s actually set for a jury trial. Now, the CLC, the California Labor Commission ruling, it won’t actually have an effect on this future trial, but obviously it sets a precedent and people are gonna take it into account. But what you guys need to know as drivers is how it affects you, right. Now if you’re out there and you’re a driver and you’re wondering, hey, do I wanna be an employee, do I wanna be an independent contractor, or even a term that I’ve thrown around here and there and some people have thrown around is dependent or hybrid, dependent contractor or hybrid type of classification.
Now I actually did a poll on my site. I’ve been really the polls lately for some reason, as you can tell. I’ve done a couple polls lately. And I asked my readers, “Hey, which classification would you like to see drivers fall under?” And this one had over 100 votes and about 20% of you said employee, 50% of you said independent contractor, and the rest, almost 30%, said dependent contractor or hybrid classification. So basically what I think that shows is that what we kind of already know, right. A lot of drivers really value the flexibility of working for Uber and they know that, “Hey, I have been an employee before, I had to get in at 8 a.m., I had to get in at 9 a.m. and work till 4 or work till 5, maybe I had to work later than that and not get paid overtime.”
And with Uber, I think that the biggest thing that people enjoy is that they really don’t tell you when to work. And that’s what a lot of this hinges on. I think Uber’s huge argument is that, “Hey, we don’t have any control. They can work whenever they want.” But as you guys know, there is a lot that they do control, right? They don’t really control when you work but they control how much you charge, whether or not you can do certain things, what your ratings are, all these different factors that really fall into it.
And I think that basically what I think I’m not okay with is I don’t think we want to be employees. I don’t think most drivers wanna be employees. I think down the road, there could be a model like Instacart is using where they do hire some employees or maybe those drivers who are doing 40 to 60 hours and would prefer a set schedule. But I think there’s a lot of room for compromise. I think the independent contractor model has worked out really well for drivers, but it’s pretty clear that it’s worked out even better for Uber. The company is valued at in between $40 to $50 billion, and while being a driver is still a great job and there’s still a lot of benefits in regards to the flexibility, there are also a lot of problems. Let’s not kid ourselves. There are a lot of issues that drivers have and I think that Uber is really getting the best of both worlds, while drivers aren’t. And I think it’s completely reasonable that Uber gives up a little of this success they’ve had to reward the drivers.
So obviously I’m hugely biased because I am a driver myself and I run a site for drivers. Of course, I’m gonna want the best thing for drivers. But I think it makes a lot of sense just from a commonsense point of view to find this middle ground, to find this room for compromise. And personally, I think that going forward, it will really be interesting to see how a lot of this plays out.
I will mention that Berwick, the woman in this case, does have a pretty litigious history. I think she’s sued over 20 companies. And I don’t wanna make any assumptions, but just someone like that, right, that’s always suing big companies, I don’t think a person like that is really looking out for the best interest of drivers. Maybe they’re just looking out for themselves. They see a big company that they can go ahead and sue and take advantage of. I think that there’s much better solutions than being employees.
But unfortunately, it might take pressure like these lawsuits against Uber to really afford change because I don’t think that Uber is voluntarily . . . they haven’t shown any signs to me that they’re voluntarily gonna go out and say, “Hey, we’re gonna start treating workers better. We’re gonna give you guys benefits. We’re gonna do this. We’re gonna make this better,” right. That just hasn’t really happened.
So I think it’s definitely gonna be interesting to see . . . And as far as timeline on all of this, that’s the other thing you guys really need to keep in mind and think about, is that a lot of these media headlines are pretty gloomy and dark and say, “Oh man, this whole industry could come crashing down.” But really, this one case, this Berwick case, is gonna be appealed. Now, it’s gonna go to a jury trial. Now if Uber loses that jury trial, it can actually go to an appellate level. At the appellate level, if they are to lose, that’s when things could get interesting because at that point, if they lose in the appellate level, then that decision can be applied to other drivers. After the appellate level, it goes to the Supreme Court. So I’m not a lawyer. I guess the extent of my law experience comes from watching about, I don’t know, hundreds of “Law & Order” episodes. I’m sure some of you guys can relate. So maybe I think I know a lot about law but in reality I know nothing. But what I do know is that lawsuits take a lot of time and you don’t have to be a lawyer to know that one.
So I don’t think that anything is gonna happen instantly in the next few months and then maybe probably not even in the next year. And I think there are a lot of things that Uber can do to adapt its business model. My hope is that there’ll be a middle ground, there’ll be some room for compromise. And it might end up that Uber has to make the line very clear of independent contractor versus employee. And in that case, they could end up giving drivers more freedom, maybe to accept tips, or maybe to set their own rates, whatever they need to do to really make it clear that drivers aren’t employees. Because I think that can be like a worst-case scenario for Uber if they have to ensure that all of their drivers are employees. I think that might even be worse for Uber than it would be for drivers.
So it will be definitely interesting to see how this all plays out, but like I said, the timeline on all of this with the sheer amount of lawsuits and even the big lawsuit this summer that’s being brought against Uber and Lyft in the courts in San Francisco, I don’t expect that to really have a huge effect until much later down the road. So it’s hard to put a timeline on all of this. It will definitely be interesting to follow all of it and I’ll be doing my best to update all of you guys on the situation.
So to update you guys on the site, the site is actually doing better than ever. I’ve been super happy with the growth. I’ve been super happy with the feedback I’ve gotten as far as the podcast and the articles and the YouTube videos and the course we launched. And then I’ve got a few other projects in the works which I can mention. But basically, in the first six months of this year, I think I’ve had close to 20%, 25% traffic growth every single month and the e-mail list is also growing. And in the past two months, for whatever reason, I think I’ve seen some pretty insane traffic bumps close to 30%, 40%. So we’re actually getting over 100,000 people coming to the site every single month.
Now I wanna say 100,000 drivers because I think a lot of my site is obviously geared towards drivers, but for me, that’s a pretty crazy number. I think the total page use is coming in at over a couple of hundred thousand. And I’ve started websites in the past and I’ve never got anywhere close to that. But I guess for me, I’m very happy, I’m ecstatic about the progress I’ve made in just a year. And obviously growing so much in such a small amount of time and in such a small niche . . . although it is growing and there are hundreds of thousands of drivers . . . I think it really says a lot about how much is going on in the industry and just basically how much there is to talk about.
I kind of joke at times that if Uber and Lyft were a little bit better at providing information or giving customer service or training their drivers, I might not have a job. But for me, I’m pretty happy with the situation and I’m still feeling super energized. I guess the biggest thing is at times when you spend so much energy and so much effort on a project, you can obviously get burned out after just a few months or six months or 12 months. And I’ve been driving now for over a year and I’m still eager to try out new services like Postmates and DoorDash. And I’m still enjoying writing and still enjoying podcasting and interviewing and recording YouTube videos.
So for me, it’s been really awesome. I feel really fortunate that I was actually able to leave my job a few months ago and do this full time. And I guess it might sound a little bit cheesy that, hey, I’ve found something that I’m really passionate about but at the same time, it’s also a business opportunity. And for me, obviously this site is my job now. It’s my full-time job and I work really hard at it so I just wanna say thanks to everyone who supported the site and listened to the podcast and read the articles. You guys have been a huge inspiration and I’m not gonna lie, there have definitely been times where I was getting a little, I’d say not burned out but kind of heading down that path. And I get e-mails, not to say always, but I do get e-mails from time to time saying basically just how appreciative people are for the content.
And really, I know that people are very appreciative, but in my mind I feel like I’m providing a very simple service. I’m writing articles, I’m doing a lot of work and a lot of research just to provide good information, and I’m really happy that I don’t have to charge people for it. Obviously we have products and we have sponsors, but at the same time, I’ve been fortunate to be in a position where I’m really just focused on growing the site. And I know that the monetization opportunities will come later on down the road and I can really focus on the core aspects of my business.
So basically I feel lucky. I’m happy I was able to quit my job, do something that I really love. Obviously, there are a few big advertisers on the site right now at this point. The driver referrals have been huge for me. That’s been a main source of my income. And for me, it’s been very nice because the driver referrals present very little conflict of interest, right. I’d say I really think that a lot of drivers enjoy coming to my site because I tell the truth, I tell it like it is. I say, “Hey, maybe Uber, the earning potential isn’t as great as it once was but here are the things that you can do to combat that, right. Here are the things you can do to make the experience better, right.”
I’m the type of person that I’m gonna work at something until I make it work or I’m not gonna do it, right. I’m not gonna sit there and complain about how much I hate something. I’m gonna figure out solutions to take advantage of the opportunities, whether they’re directly from driving or all the ancillary opportunities of starting a business and promoting these side businesses, referring passengers, referring drivers, right. So for me, it’s definitely been nice that obviously these companies are paying such high driver referrals because I’ve been able to refer a few drivers here and there and cover my expenses, cover the expenses of the site.
Obviously we have a few writers and when you start getting high traffic, you need to pay more. I guess that’s kind of the good and the bad. When you start getting more and more people, you have to . . . Every month, it seems like I have to pay more to MailChimp for my e-mail list and every month I have to pay more for hosting because I’m always going over the data allowance that I have. But those are all the technical stuff that you guys don’t care about.
And then I also have some of the more . . . A lot of people always ask me, “How do you make money with the blog?” So I can share a little bit of info with you guys right now. And obviously after the driver referrals, my biggest ad partner that I mentioned at the top of the show is YourMechanic. So they’ve been a really cool company to partner up with and I guess they’ve been very successful so that has also helped me out a lot because since they’re now expanding into nearly every city, it basically has allowed me to promote them to my entire audience. And even though I have a lot of California drivers in my audience, I also have drivers from all over the place . . . Tulsa, New York, New Jersey, Chicago, Boston, Miami, right, all of these other states, the south and mid-west. So it’s definitely been cool that as they’ve been expanding, more and more of my readers and listeners have been able to take advantage of them.
And I guess one of the biggest things for me is that I’ve really . . . I know that from blogging, it really takes a lot to build up a lot of trust with your readers. And that’s one of the reasons why I’m so careful with the products and the companies that I promote because I know that if I were to promote a company like YourMechanic and they turned out to be a total crap company, I would lose a lot of the respect and a lot of the trust. And maybe the next company that I promote, even if they are really good, then no one’s gonna listen to me and no one’s gonna trust my opinion. So that’s like a little blogging lesson that I’ve learned in the past.
And then of course, I also have more traditional Google ads on the site. And actually one cool way that I know I’ve mentioned here and there is anytime you see an Amazon link on my site, you can actually click on that and any product that you buy within 24 hours, I get a small commission. So that’s been cool because I know I’m a huge fan of Amazon and I do all my shopping on Amazon. I order everything from toilet paper and paper towels to paper, printer paper, or household items, household goods. That actually reminds me I need to order a dish washing soap right now, for example, so I’ll do that after this podcast, otherwise my wife might get mad at me. But yeah, so it’s definitely been cool promoting all of these products and doing the site.
So I just wanted to give you guys a quick recap of all that’s gone down in the past year of my site and let you know what’s going on going forward. So I’m pretty excited about the direction of the site. When people ask me where do I see this going or what do I plan on doing, I guess I usually tell them that hey, I’m pretty happy with what I’m doing right now, right. I’m still able to hire a few people. But I still have a big part in the business side of things but I also still can do the things that I really enjoy like writing and podcasting and recording videos and actually going out and driving and doing these services, trying out Postmates and trying out new services or figuring out new strategies for Uber. So for right now, I’m pretty content doing what I’m doing and I hope that you guys are, too. So if you have any questions or comments or feedback, definitely let me know.
All right, guys. So we covered a lot today. We talked about insurance and the new requirements and everything you need to know and updated you on the current state of insurance, went through some of the employee rulings and touched on everything that’s affecting drivers, what the timeline looks like, should you be worried, should you go out and find a new job tomorrow. The answer is no. Don’t worry, nothing is gonna happen too soon. I think it’s interesting to be aware of all of these issues. Obviously, insurance isn’t the most exciting or most fascinating topic but it’s super important, right?
And I think just as in general in life, there’s certain things like taxes and insurance and things that are, let’s be honest, a little bit boring but they’re often very important. And while you might not need to know the nitty-gritty and the nuts and bolts of how things work, it’s important to be able to know the basics, to be able to say, “Hey, I understand my risk and I understand that if I get this policy, what could happen or if I get that policy, what could happen.”
So I don’t expect you guys to go out there and spend 10 hours researching insurance like I did, but you can definitely listen to a podcast like this or go and talk in a Facebook group or post in a forum and just get a little bit of feedback. And then that way, you kind , you ensure that, “Hey, I’m protected. I understand what the situation is.” Because just a little bit of investment of time right now listening to a podcast like this or spending an hour or even 20, 30 minutes doing some research can pay huge dividends down the road when you get into an accident or you avoid having to pay a huge deductible, right.
So there’s lots of these little investments that you can make and that’s what I’m always on the lookout for. And what I’m trying to help you guys with, is trying to give you enough information that you can really get the basics, maybe do a little bit of additional research on your own, and then protect yourself or help yourself out down the road.
So hopefully you guys find the podcast and information like this really helpful. I know that I’m more than happy to provide it. And as always, if you guys have any questions or you wanna check out the show notes, subscribe to the e-mail, you guys can all log on to the website, head over to therideshareguy.com/episode21, you’ll get all the information, all the links that we mentioned in this show, and I think we mentioned a lot, will be in the show notes there. And then you guys can subscribe. Check us out on iTunes, Stitcher, or wherever you get your podcast. And of course, if you have any questions, make sure you contact me, shoot me an e-mail, hit me up on social media, Facebook, Twitter. And if you guys really need to get in contact with me, just know that I respond to each and every single one of your e-mails. So for me, e-mail is probably the best way, but I’m all over the place.
And finally, before I go, I wanna share with you guys a cool story and a little song that one of my readers made. So I actually posted on Facebook about a site called Fiverr, F-I-V-E-R-R. Now, Fiverr is a really cool site because you can actually get gigs done for five bucks. Now they have everything from really cheesy, weird stuff like people singing happy birthday to you in their backyards with their shirts off, maybe a male doing that. It’s not like that type of site or anything. But they have all this cheesy stuff. And then they actually also have useful stuff, too.
So I actually got the logo for my site and the business card design that I got printed on Fiverr for five bucks each. So it’s not always the greatest quality and sometimes it’s a total miss but sometimes it’s also a hit. And I was talking about just this as another way because I know that there are some people making money off services like this and others, eDesk and oDesk and Elance and TaskRabbit, services like that. So just another way to . . . I know a lot of people use Fiverr where they have a passion about something and then maybe they sell a little gig.
So right now I’m gonna share a song from one of my readers named Jeremy and I actually bought his gig. So when I posted about this on Facebook, he linked to his Fiverr gig, and I checked it out. He had good ratings and I decided to buy it. So hopefully you guys enjoy this song and until next time, I’ll talk to you guys on the next podcast. All right. Take care.
Jeremy: Rideshare Guy, he’ll take you wherever you want. Rideshare Guy, he’ll take you wherever you want. And he’s got a lot of information [inaudible 00:51:01] your job or two, like Uber and Lyft and Postmates. Like Uber, Lyft, and Postmates. He’s the Rideshare Guy. He’ll take you wherever you want. He’s the Rideshare Guy. He’s got knowledge. [Inaudible 00:51:26] he’s the Rideshare Guy. He’ll take you wherever you want. He’s the Rideshare, he’s the Rideshare Guy. He’s the Rideshare, he’s the Rideshare Guy. He’s the Rideshare Guy.
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This is a transcript of Episode 21: New Rideshare Insurance Requirements, Employee Rulings and 1 Year Site Anniversary. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.
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