USAA headquarters in San Antonio. If stood on end, it would be 300 stories tall, three times the height of the Empire State Building. Photo courtesy of USAA.
USAA has over 36,000 employees across the globe, with the majority in the San Antonio area. Credit: Courtesy / USAA

Cities across the country have been struggling to figure out how to accommodate – or not accommodate – transportation network companies (TNCs) like Lyft and Uber that connect personal vehicle drivers to riders via a mobile application. For many regulators, issues of liability and insurance coverage represent a central issue.

USAA has launched a pilot program in Colorado that gives rideshare drivers the opportunity to sign up for a policy that extends their existing USAA coverage and deductibles and provides enhanced coverage the moment rideshare application is turned on until to the moment they are hired to pick up a customer.

This interim phase of the rideshare process, when a driver is technically on the job or driving to the job, but not yet connected with a customer, has proven difficult to resolve in terms of liability and exactly who is responsible for coverage, the driver or the rideshare company.

Commercial use of a personal vehicle may void personal insurance policies in the event of an accident and TNCs don’t want to foot the bill for drivers that aren’t technically “working” for them en route to a specific customer. Many drivers wait in their living rooms or at coffee shops to be hired.

“It (the pilot program) covers that gap,” said Jesse Mata, USAA product management director based in San Antonio.

USAA’s pilot policy will act as the primary insurance during this “unmatched phase” of ridesharing, Mata explained. USAA is not the first insurance company to work with rideshare, but it is one of the first major companies to begin to experiment with a new product to cover ridesharing.

According to USAA, the pilot policy costs about $6-$8 more per month, or roughly $40-$50 more for a six-month insurance policy.

In San Antonio, City Council recently approved rideshare regulations that requires TNCs to provide primary insurance for as long as the app is active.

(Read More: San Antonio Imposes Strict Rideshare Rules)

Texas, like most states, does not operate with a set of statewide regulation. The result is a wide range of different municipal regulations.

Colorado became the first state to legislatively allow rideshare in June 2014, but that permission included a phased-in insurance requirement that all drivers obtain primary coverage covering all vehicle operations from log-in to log-off, beginning Jan. 15. While Coloradans can sign up for USAA’s pilot policy now, it won’t take effect until Feb. 10. TNCs will likely cover drivers in the interim.

Colorado Springs is home to a major USAA regional office and the state is home to thousands of customers, called members, including active and retired military – many of whom have become rideshare drivers themselves. Colorado thus became an ideal environment to test the rideshare insurance market.

“The industry is so new, there’s really a dearth of information,” Mata said. “We’ve gathered as much information as possible … keeping track and keeping up to speed (on various regulation and statistics) as we do our research.”

The pilot policy has no set timeline or strict framework, he said. “It’s there to test and learn and, if need be, we can go back and adjust the pricing.”

USAA’s new product is something that TNCs have been waiting for amid a nationwide debate in cities over how to regulate rideshare, which doesn’t fit the same definition of traditional taxi services.

“We are excited about the creation of modern insurance policies tailored for drivers who participate in peer-to-peer transportation, and expect additional carriers to bring products to Colorado in the coming weeks,” a Lyft representative stated via email. “We continue to believe that innovation in the insurance marketplace is the most effective way to maintain the highest level of safety while allowing ridesharing to thrive.”

Uber had a similar statement to share:

“We are encouraged by the fact that USAA is leading the industry in creating flexible insurance products that recognize ridesharing. As technology evolves, so do the industries that rely and support these advancements,” stated an Uber spokesperson via email. “This is a timely reminder that regulations should be written broadly enough to make room for such growth and innovation. We hope the city will take this latest advancement into consideration as we near the March 1st implementation of the new TNC regulations.”

Both Lyft and Uber continue to operate in San Antonio, despite regulations that representatives say may make the cost – money and time – of doing business for the companies and its drivers too high to continue to operate. The new ordinance goes into effect on March 1. Neither company has indicated its intentions in San Antonio beyond that date, but representatives from both Uber and Lyft have indicated they are searching for ways to make the service a viable one here.

*Featured/top image: USAA headquarters in San Antonio. If stood on end, it would be 300 stories tall, three times the height of the Empire State Building. Photo courtesy of USAA.

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Senior Reporter Iris Dimmick covers public policy pertaining to social issues, ranging from affordable housing and economic disparity to policing reform and mental health. She was the San Antonio Report's...