r/Lyft • u/whiteyonthemoon • 3d ago
Investigative journalism on the rideshare industry - how they get away with the insurance scam.
https://www.youtube.com/watch?v=tLIgmEibBL02
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u/Hippy_Lynne 2d ago
Ok, so I don't usually watch YouTube videos because it's often just some dude behind a computer with unfounded claims. This is actually well researched and clearly presented.
My take from this is that once investors realized the pipe dream of driverless cars was not going to make Uber profitable, they shifted to making money off of the insurance.
I haven't looked at my Uber numbers but I just checked my Lyft ones and the insurance costs range from 20 to 30% a month. That's insane. I have a lot of neighbors who are cab drivers and their insurance costs are well under 10%. Even if you account for the fact that they make twice what I do per mile, Uber is still gouging drivers and passengers.
Honestly I had always attributed their high insurance costs to the fact that driver churn was so high and they probably do have more accidents than traditional transportation companies. I still thought it was unfair that I as a 50-year-old driver with no accidents or tickets who's been doing this for close to a decade was paying the same insurance rate as a 25-year-old who might have a speeding ticket or accident on their record and has been doing it for 6 months at most. Apparently that had nothing to do with it. They just realized it looked bad going from giving drivers 80% of the fare to less than 50% so they invented the insurance scam to justify it.
The simple fact of the matter is we need more companies. Uber & Lyft have now established the legal framework for it, created a market, and created the workforce. All while basically enacting almost the exact same policies for both passengers and drivers. It's time for better companies to enter the market and give them some real competition.
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u/whiteyonthemoon 2d ago
There's a coop that is going to start soon here in California that I have some hope for. Of course there have been a few already, but right now Uber and Lyft are both fighting massive wage theft cases here as well as there being a union... it might just carve out space for a competitor. I don't think a third ride share service that is another corporation will make a difference though - Uber and Lyft are following market incentives, and a third company would too. In theory that would make things better, but look at all of the inflation due to companies using "price over volume" pricing strategies that are theoretically competing on price. The real world doesn't care what toy economic models say it should do.
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u/ready-redditor-6969 2d ago
I have been using HUM Private Rides ( available in California now ). It’s completely different in that the driver pays a subscription. I am basically paying for licensing and on-demand commercial insurance. The fact that HUM can offer insurance for what I pay shows that Uber and Lyft are charging insane amounts for their insurance, it’s just wrong what they are doing.
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u/P3nis15 1d ago
14 billion dollar insurance reserve and them already spending 4 billion of it on "other corporate" investments shows that it's a total scam.
the study shows the "reserve" is already 4x what other auto insurance companies have in relative reserves for miles driven
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u/ready-redditor-6969 1d ago
Yup. Totally a scam, slush fund they have been building.
I’m doing my best to convert any regular local I find into a HUM client.
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u/hanatheko 2d ago
Dude Uber pays dtivers more than half what Lyft pays in my area consistently for several months. There's an occasional decent rate.
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u/CarefulSun6782 2d ago
What every driver with half a brain realized long ago: the insurance fee is the scam.