Metromile and Uber: An Insurance Solution?

The pay-as-you-drive Insurance company has partnered with Uber to help bridge the gap for rideshare drivers on their personal insurance policies. Is this the future of insurance?

car and skyline

We’ve written about Metromile and we’ve written about the insurance gap for rideshare drivers, but this week brought an interesting development that binds the two together — a partnership between Metromile and Uber.

It works this way: Because Metromile tracks (and charges for) insurance by number of miles driven, the company will now coordinate with Uber to determine which of a driver’s miles, on any given day, were for personal use, and which were commercial — aka the time they spent providing ridesharing services. The two companies will share data on both timeframes and miles. And then, Metromile explains, “For each monthly bill, rideshare miles will be subtracted from the total, and the driver is only billed for the personal miles.”

Why the Partnership Makes Sense

Metromile claims that the result of this kind of tracking might be huge savings on insurance costs. The company was designed with low-mileage drivers in mind, so for those rideshare drivers who spend most of their time driving commercial miles (covered by Uber), this might make sense. But there’s an additional benefit to this partnership as well: Metromile is one of the first car insurance companies outwardly addressing the growing population of rideshare drivers on personal auto insurance policies. (USAA is currently piloting an insurance product specifically for rideshare drivers in Colorado.) Many insurance companies, if they learn you are rideshare driver (say when you go to file a claim, for example), will either drop you immediately or not renew your policy. But not Metromile.

“Not only do drivers have the potential to save money, but ultimately they finally get peace of mind,” Metromile explains in their post announcing the partnership. “They no longer have to live in fear of being denied coverage by a personal auto insurer because they participate in an Uber TNC, nor will they worry about coverage during formerly-ambiguous gray areas.”

Metromile’s CEO Dan Preston spoke with Quoted via email about the collaboration, which he says has been a year in the making: “The partnership with Uber was a natural fit and began organically, starting as a conversation at a networking event,” Preston says. “Metromile’s pay-per-mile insurance model is ideal for this partnership because we are able to monitor when the Uber driver partners are driving for Uber and when they are driving for personal use. We are providing a unique solution for a market where traditional personal auto insurance products may not otherwise provide coverage. This allows drivers to have peace of mind, knowing they are insured at all times.”

Drivers can have peace of mind, knowing they are insured at all times.—Dan Preston, Metromile CEO

A waitlist is live on Metromile’s site, but they’re not yet releasing any numbers around sign-ups. Available in February in California, Washington, and Illinois, we think the program fills a hole that is currently gaping — In Metromile’s own words, a “personal auto insurance product that recognizes and covers the dual nature of rideshare vehicles for personal and commercial use.” We asked Preston about Lyft, but he said the company is focusing only on an Uber partnership for now.

We also reached out to Harry Campbell, aka The Rideshare Guy, to ask a real-life driver’s opinion on the merger. He’s not convinced yet on the savings aspect: “The Uber and Metromile partnership is definitely a step in the right direction for drivers. It probably won’t save them much money but it does remove a lot of the uncertainty about who provides coverage during the insurance gap period and more importantly it allows for drivers to not withhold from their personal insurer that they are a rideshare driver. Based off surveys I’ve done on my site, 90 percent of my readers have not told their insurance company that they are a rideshare driver.”

Campbell adds, “This partnership will put a lot of drivers at ease when it comes to disclosure but it’s unfortunate that the agreement doesn’t extend to Lyft and Sidecar drivers. With close to 50,000 drivers in California alone, I suspect we will see more insurance companies jump on board and offer some type of hybrid policy or riders that allow drivers to be rideshare drivers, at a slight increase in cost of course.”

Most rideshare drivers cannot afford commercial insurance, because most rideshare drivers are not working full time. What do you think — could Metromile and Uber have found a solution?