Drivers pay giant insurance fees to Uber
“All the benefits flow to Uber” new investigative report finds
“Commercial insurance rates” collected from Uber drivers on every trip flow to Uber itself through Aleka Insurance, according to a new investigative journalism report.
“Aleka Insurance is a wholly owned subsidiary of Uber, and its sole purpose is to self-fund Uber’s insurance system. It is nothing more than a department of Uber, if you look at it that way,” Consumer Advocate Jamie Court told Eric Gardner of news site More Perfect Union in a report which aired on August 19th.
“Every other insurance company in America has to publish how much they pay out in claims, how much they take in in premiums. Aleka doesn’t have to do any of that because its only customer is Uber, and Uber controls Aleka.”
In the video, Uber CEO Dara Khosrowshahi is quoted saying Uber rates have gone up because of inflation.
“They said the cost of insurance has gone up. They didn’t say they were charging themselves for insurance,” Court points out.
Len Sherman of Columbia Business School says commercial insurance has turned into a “money making machine” for Uber.
“All of the benefit essentially flows to Uber,” says Sherman, who has tracked Uber’s history and performance for over a decade.
Aleka Insurance, Inc. is a wholly owned subsidiary of Uber Technologies, Inc. Formed by Uber executives and managed by Aon, it self-funds roughly 95 per cent of the ride-hailing company’s commercial auto insurance risks, holding billions in reserves.
Aleka Operates as a captive insurer to handle self-insured auto liabilities, absorbing commercial auto risks, including a $345.1 million legacy transfer of ridesharing policies from James River Group, which canceled its insurance policies with Uber in late 2019 due to mispriced risks and high losses, particularly in Florida. In September 2021, James River transferred its remaining legacy commercial auto liabilities from 2013–2019 to Aleka.
