Thinking Through All of the Implications of the Gig Economy

Thinking Through All of the Implications of the Gig Economy

      In the so-called “gig economy,” workers are self-employed and work as independent contractors of any number of companies including Uber, Lift and DoorDash. Of course, the gig economy extends well beyond these transportation companies to include freelancing graphics design, artists, participants in the computer industry and even contract attorneys. For each person so engaged, they need to carefully consider what it means to be self-employed. 

      According to a recent newspaper story, a woman working for Grubhub learned the hard way that she had not fully considered those implications. While working on a delivery, she was, at her fault, involved in a significant automobile accident. After the driver of the other car was made whole by his insurance company, that insurance company came against her, exercising its subrogation rights. She turned that claim over to her automobile insurance provider, and there is where the problem arose. She had an ordinary, and not a commercial/business, insurance policy. On the basis that she was engaged in business (i.e., delivering for GrubHub) at the time of the accident, the insurer denied that she was entitled to coverage, a denial that extended as well to the damage to her own vehicle. She is now facing the possibility of filing bankruptcy. 

      As reported in the newspaper article, she believes that at least part of the fault lies with GrubHub. She presented a copy of her personal insurance policy, and they did not tell her that she needed to have a commercial policy. Whether that was really GrubHub's obligation is subject to debate. Regardless, at the time of this accident she did not have insurance that would protect her from the consequences of an accident taking place while working as an independent contractor of GrubHub.

      HERE IS A LINK to that news story.

      Persons involved in the gig economy need to carefully consider all of the implications of working as a self-employed independent contractor including as to the full range of appropriate insurance.