Dive Brief:
- Uber, the international ride-hailing firm, is testing workers’ comp-type insurance coverage to give it South Carolina drivers financial protection if they’re injured on the job, reports The Post and Courier.
- The insurance policies will help cover drivers’ medical bills and replace their regular earnings if they’re injured while transporting customers. The insurance plan, reportedly the first of its kind, is a means of offering wage protection to gig economy workers, says The Post and Courier.
- Insurance policies will cost drivers 3.75 cents a mile for up to $1 million worth of coverage. Passengers will subsidize the costs through a five cent increase in fares.
Dive Insight:
Offering Uber drivers insurance policies is a step employers might be inclined to take to protect independent contractors and other gig economy workers' wages.
Employers are facing the dilemma of hiring on-demand workers without worrying about the cost of providing benefits as opposed to offering them wage protections. Recently, Uber drivers have sued the company over what they perceive as lost wages — denied benefits to which they feel entitled — threatening unionization .
The larger issue is the fact that gig workers are projected to outnumber traditional workers by 2025. Their looming numbers are causing Congressional lawmakers to think about revising the decades-old Fair Labor Standards Act to accommodate these nontraditional workers in the labor force. This was the argument made by House Republican Virginia Foxx (NC) earlier in the week.
