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  • Writer's pictureAndré Rembert

Uber Launches Workers’ Compensation Trial Run in South Carolina

workers compensation

Uber Launches Workers’ Compensation Trial Run in South Carolina

Ride-sharing tech company Uber is prepared to use South Carolina as a testing ground for a brand-new workers’ compensation program. The results could have a considerable impact on worker protections in what has been referred to as the up-and-coming “gig economy.”

South Carolina Uber drivers will have access to a new personal injury policy that serves as a form of workers’ compensation insurance, helping drivers who have been involved in car accidents to pay their medical bills and replace their typical wages (up to $500 per week) if they are injured while working for Uber.

Unlike a typical workers’ compensation plan, the policy is entirely optional for drivers. Those who opt in must pay for it at the rate of $.0375 per mile for up to $1 million in coverage. Uber will allocate the money to pay out insurance settlements from passengers, who will see prices across the state raised by 5 percent.

Worker protections in the ‘gig economy’

Increasing numbers of Americans are participating in the gig economy, the term used for side jobs that offer supplemental income. Other examples outside of Uber and its main competitor, Lyft, include longstanding businesses like Mary Kay and Thirty-One, which allow people to work for them as representatives to sell their products and earn income.

This new insurance plan Uber is exploring would be the first of its kind. There has previously been no such safety net for anyone working in the gig economy, as they are typically classified as independent contractors. This status means they do not have access to most of the common benefits and protections available to employees.

Uber representatives say the policy has already been in the works for at least a year, with Uber working alongside its insurance providers like OneBeacon and Aon to determine exactly what such a policy would look like. Depending on how the trial period goes in South Carolina, it could be rolled out to the rest of the nation in the coming months. Several other states have also approved the insurance policy option and are awaiting a test period of their own.

It is currently unclear how many drivers in South Carolina will sign up for the plan.

The presence of a workers’ compensation policy does not do much to lighten the pressure placed on Uber from advocates such as the National Employment Law Project, which has long called for greater protections for all on-demand service workers. It also will not settle the longstanding question of whether drivers for Uber should be treated as traditional employees. Uber’s argument is that it is a technology platform connecting drivers and riders rather than a transportation service employing drivers.

To learn more about the workers’ compensation plan being introduced in South Carolina and how it could impact your rights as an employee or contractor, speak with a skilled workers’ compensation lawyer at The Rembert Law Firm.

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