The annual festival of football frenzy and consumer excess is on the horizon. Parties will abound. Millions will order pizza and wings, fried chicken and beer and Chinese food. Millions of delivery drivers will zoom back and forth, hustling from their cars to doorsteps and back again.
And nearly all of them will be risking their future.
Substandard wages and the hope of tips fuel the delivery sector of the gig economy. Most drivers are supplementing other low-income jobs, just trying to pay the monthly bills.
Many are happy for an opportunity to make extra cash while setting their own hours, and some are quite pleased with the extra income. It has an upside.
But the gig comes with a hidden catch. If drivers are involved in an automobile accident while making deliveries, their auto insurance company will almost certainly deny the claim, leaving them in the lurch.
I learned this the hard way. One of our adult children, still included in our family policy, was involved in a minor accident on a rainy night while delivering sandwiches for Jimmy John’s. He told the truth when grilled by an investigator from my insurance company, and the company immediately denied any responsibility.
This turns out to be an industry-wide practice: every major auto insurer has a built-in exclusion for drivers who are logged in to a delivery platform. Whether they work independently through companies like DoorDash, Uber Eats, or Grubhub, or whether they’re employed as drivers for chains such as Domino’s, Papa John’s, or Kentucky Fried Chicken, they’re on their own.
Insurers don’t publicize the exclusion. I eventually found it in my policy, buried several pages deep in the part that nobody reads any more than they read the full text of software or online service “Terms and Agreements” before clicking “Agree.” I am confident that most people taking advantage of food delivery jobs are unaware that they are the ones being exploited.
Ride-share companies like Uber and Lyft offer the option to purchase extra insurance, but it’s only good while a passenger is in the car. If drivers are logged in but between pickups when a wreck happens, they’re out of luck.
A few insurance companies offer supplemental policies for delivery drivers at extra cost, but only for limited types of self-employed delivery services. My agent insisted he didn’t know a single auto insurer that would cover someone making deliveries when employed by a fast-food company or restaurant. Their only option for coverage is to purchase a commercial policy, something far beyond the reach of a part-time delivery person.
The situation not only puts drivers at risk, but it can also force them into sticky ethical situations. A young man I know who works for a major pizza franchise said he was told, in case of an accident, to immediately call the restaurant and log out, then lie about what he was doing.
People struggling to make a living should not be squeezed into that kind of ethical vise.
The situation is a sweet deal for everyone but the delivery drivers. Insurance companies rake in many millions of dollars at lower risk from customers who don’t realize their coverage is worthless while they are making deliveries.
Food providers get cheap labor while leaving all the risk to employees who use their own vehicles and pay for their own insurance without realizing it becomes void when they’re on a run. Just hitting a deep pothole can blow out a tire and bend a wheel rim. That can easily run $1,000 or more to repair.
If drivers are involved in a more serious accident while making a delivery, their insurance company will quickly wash its hands of the affair. The driver will be left to not only repair or replace their own car, but also the cost of damages to any other party’s vehicle, and potentially many thousands of dollars for medical bills or damages.
Many drivers bringing food to office lunches or to fans enjoying the Super Bowl can’t afford major repairs to their own car, much less the other party’s vehicle. These days, even a minor fender-bender can generate repair bills of well over $10,000.
The other party’s insurance will likely pay for their customer’s repairs – and then hire a debt collector to hound the driver for reimbursement under a policy known as subrogation. It could easily push drivers deeper into debt or even bankruptcy.
That’s not fair. Both insurance companies and the food-service industry are profiting from taking advantage of low-income and sometimes desperate people who are typically unaware of the risks they take with every doorstep stop.
Meanwhile, customers who order food for delivery benefit from the convenience of free or low-cost deliveries – which makes them implicit in the ethical dilemma.
There’s probably little hope of legislation that would require insurance companies to include coverage for gig drivers, or to require food service companies to provide such insurance. Money, not morals, often rules.
Auto insurers have a moral obligation to notify policy owners upfront that coverage for delivery driving is excluded. My agent claimed that would take too much time, as if an annual email blast to customers would be too taxing. They’d rather keep it confined to the back pages — unless other companies are more forthcoming than mine.
Likewise, food service companies should warn potential drivers of the risks they take, but that would reduce the pool of likely candidates.
Is there anything we can do?
We could go pick up our own food. While relieving someone else of the risk, however, it would also reduce their opportunities for income.
Or, we could go ahead and order out, and then meet the delivery person at the door with two tips. First, we should offer at least enough cash to cover what our time would be worth if we had gone to pick up the food ourselves.
The second? We could ask, “Has anyone ever told you that if you have an accident while making deliveries, both your employer and your insurance company will leave you high and dry? Be careful out there.”
That tip won’t cost us anything – but it could save them a lot.
Professor of Old Testament at Campbell University Divinity School in Buies Creek, North Carolina, and the Contributing Editor and Curriculum Writer at Good Faith Media.