How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I always say it’s best to be general about the transportation type within the name of their business, especially as market conditions change. You may be heavy in taxi trips one year but then obtain a paratransit contract and do more of that the following year. The more years of favorable loss history (loss runs) you can provide, the better chance you have at obtaining the lowest insurance rates. Choosing a business name that is general such as Laura’s Transportation Service, LLC. allows you flexibility to transform and evolve your business as the industry demands change.

3) Loss Control is Everything

Underwriters give commercial fleet insurance at the lowest insurance rates to companies with low levels of paid claims. Even in a hard insurance market, with rates rising for the good guys too, you can expect to pay more for commercial fleet insurance if you’re prior insurance companies have paid a lot in claims. Here are some suggestions in tightening loss control for your transportation service company:

  •  Hire a full-time loss control or driver manager who will enforce a safety culture. Doing this, will lower the frequency and severity of claim payouts and put your transportation service company in a better position to obtain the lowest insurance rates. This person should be in charge of overseeing the overall safety of your company. Managing and coaching your drivers is the key to a successful transportation service company. You are only as good as your worst driver.
  • commercial fleet insurance Invest in cameras that capture not only accidents but also driver analytics. This type of camera system will allow you to review driver behavior and correct bad habits before they cause an accident. We like to say this method is similar to that of a professional athlete. How do they improve? They watch their game film and correct bad habits. Driving professionally is the same. The more you do it, the more comfortable you get and having drivers watch themselves reduces risky behavior dramatically. Additionally, it’s a known fact that many commercial fleet insurance claims are paid because of he said/she said situations. Having accidents on camera is the best way to know who exactly was at fault and exonerate innocent drivers.
  •  Hold weekly safety huddles and or monthly meetings. Review the data and claims that have occurred recently and talk to your drivers about how they could have been prevented.
  •  Commit to investing in annual defensive driving training for your drivers. This annual reminder to drivers will ensure that bad habits are addressed and give each driver a time to reflect on their own performance.
  • Implement a reward program for safe drivers. Giving an incentive, even if it’s small monetary gift cards – keeps your drivers focused and motivated on safe driving habits.

4) The Driver Pool

The Driver Pool is so important when trying to achieve the lowest insurance rates from commercial fleet insurance providers for your transportation company. How you chose to manage drivers and who you hire is crucial. Create formal guidelines that clearly outline what is acceptable for employment. We recommend only hiring drivers with zero accidents within the past three years and minimal moving violations. Clean MVRs are best but we know that professional drivers with experience usually do not have clean MVRs and this is ok. Professional drivers are on the road up to 3x more than someone commuting to/from work so it’s a given that they will most likely have more violations on their records. Repeat offenders can impact the cost of your commercial fleet insurance and should be let go. No one is perfect, but you should train your drivers with the goal to be as safe as possible. Excessive violations on a driving record can cause surcharges and prevent you from obtaining the lower insurance rates. Additionally, younger drivers sometimes generate higher premiums for commercial fleet insurance as well as newly licensed individuals.

5) Contact an Experienced, Transportation Insurance Broker

commercial fleet insurance

Working with a transportation specialist versus a local agency makes a huge difference as commercial fleet insurance brokers have access to many more transportation focused insurance companies. Also, an experienced broker will review your company data prior to submitting to commercial fleet insurance companies. If they see something a commercial fleet insurance company won’t like, they can address it with you and provide you with an opportunity to make changes before submitting to each carrier. The more information you can provide to a commercial fleet insurance underwriter, the better chances you have at achieving the lowest insurance rates. Because the for-hire, livery insurance market is so thin, carriers often get multiple submissions from duplicate brokers. Try to work with one broker at a time. You may think contacting multiple agencies well help you, but if they are all going to the same markets for commercial fleet insurance – it’s duplicating not only your own work, but the insurance companies as well. The livery market is a tough class of business and finding an experienced broker will absolutely give you a leg up on finding the lowest insurance rates over a generalist broker.

American Business Insurance Services, Inc. has been working with transportation companies across the nation for 35+ years. We have direct relationships with the most competitive commercial fleet insurance companies. We know what it takes to submit a complete application and present your company in the best light possible – which will no doubt translate to finding commercial fleet insurance at the lowest insurance rate.

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  Top 5 Issues When Choosing Lyft or Uber vs Taxi

Top 5 Issues When Choosing Lyft or Uber vs Taxi

Written by Laura Loftus on Wednesday, December 5th, 2018

lyft or uber vs taxi ridesharing cost and safety

With travel increasing as we approach the holidays, many of us default to using a Lyft or Uber vs Taxi because we are under the impression that it’s faster, cheaper and all around more convenient than taking a taxi. However, I have a different perspective. As a west-coast based insurance broker who has clients all over the country, I tend travel about once every two months or so.

Most recently, I’ve visited San Francisco, New York City, Denver and Las Vegas for work meetings. I have to tell you, there were times where hopping into a cab was not only easier but also less money than their TNC counterparts.

Nowadays, people seem to think taxis are antiquated. But in reality, taxis are the same thing as an Uber or Lyft app, and I honestly feel safer in a cab. Here’s why.

1) Safety

Safety is my top concern when entering into a Lyft or Uber vs Taxi. For one, Uber and Lyft do not limit how long someone must have been licensed to drive for them. Someone could’ve moved to the US a few weeks ago, obtain a Driver’s License and as long as they have access to a qualifying car and pass a MINIMAL background check – they are approved. Nobody trains them, monitors them, or ensures that they are familiar with the area in which they drive.

The city highly regulates taxi drivers. They require taxi drivers to go through numerous EXTENSIVE background checks. Only then does the city in which they operate in allow them to start transporting people. Many cities require taxi and limo drivers to obtain a Hack License or Chauffeurs license. That means they have endured many hours of classroom-style and behind-the-wheel training.

Besides safety concerns regarding the driver, there are concerns around the vehicle. All taxi companies start their days by inspecting vehicles. They are required to get a vehicle inspection yearly to keep their operating permit. Lyft or Uber vs Taxi vehicles are not regulated at all. Once the driver is approved, there isn’t much regulation unless the ride share vehicle is in an accident.

With ride sharing, you are taking a risk as to who you are getting into a vehicle with. You could end up getting into a vehicle of someone with a criminal background who is dangerous. Even more concerning, I have heard of people leasing or renting out their Uber or Lyft accounts. So, for someone who doesn’t qualify themselves, they will find someone who does qualify. They’ll have to go through the approval process and use someone else’s account to work. That freaks me out, a lot.  When comparing Lyft or Uber vs Taxi, this type of situation would not happen. That’s because fleet owners know exactly who they are leasing the cab out too.

2) Insurance

Insurance issues are a huge concern when riding in a Lyft or Uber vs Taxi vehicle (and I’ll admit, I do use ride sharing apps regularly). Despite being an insurance broker who specializes in Public Auto

lyft or uber vs taxi ridesharing cost and safety

Transportation risks (specifically for-hire, livery businesses such as Taxi’s, Limo’s, Non-Emergency Medical Transportation, shuttles, etc), I often hop into a Lyft or Uber vs Taxi because, let’s face it, it’s super easy.  Hop on an app, order a car, and it will arrive in 4-5 minutes. This is especially the case when you’re in a residential or suburban area where cabs aren’t just lined in the street waiting for their next fare. I often think about what would happen if the car I am in was involved in an accident.

I am extremely knowledgeable on the coverages that Uber and Lyft’s insurance policy include and it’s spotty at best. For one, the driver and passenger are only covered if the app is on and the driver is logged in. What if there is a technical issue and the driver is logged out? If their phone dies, what now? What if they’re in an area with poor reception and the driver is disconnected from the app? A passenger could be held responsible for injuries incurred. Additionally, the majority of ride share drivers do not have commercial insurance. Plus, Uber and Lyft require drivers to turn the claim into their personal auto carrier before they’ll accept liability.

Commercial auto insurance is expensive, about 2 – 5 times higher than personal auto and most ride share drivers do not buy it because their profit margin on operating is thin. They pay for the vehicle itself, maintenance of the vehicle, gas and almost every TNC driver who calls for a quote on commercial auto insurance so that they can be properly insured does not buy it because no one is making them. This means the only coverage they have for their vehicle and the passengers is through Uber or Lyft, which all hinges on the driver being logged into the app.

3) Accessibility

lyft or uber vs taxi ridesharing cost and safetyAccessibility and ease of getting a ride from an airport, in my opinion is far greater for a taxi than a ride sharing unit. When deciding on an Lyft or Uber vs Taxi, typically, I exit a plane and walk straight to a taxi to my destination. I don’t have to rely on my signal being strong enough for the app to work. I don’t have to wait for the car to come through traffic or walk to somewhere off the premises to get a ride. In some airports, they don’t allow ride share units to pick up. If they do, you often have to go up a level to the departure area or walk to a far end of the airport. When I get off a plane, I personally prefer to get straight into a car and quickly be on my way.

On my last trip to San Francisco, I saw a sign that said Ride Share pick up and I could see a side walk with several waiting areas. According to my app, Ride Share would be about 75% of the cost of a cab. I looked at the taxi line and it was empty and there was car waiting. For experimental purposes, I sacrificed my usual cab ride for a Lyft ride to see if it was actually faster and cheaper. I logged into my Lyft app and requested a vehicle. Because the airport was busy, it took 5 minutes for a driver to accept my ride plus 15 minutes for them to actually pull up to the curb. The whole time I kept my eye on the taxi line. I watched person after person get into a cab and drive away.

I wanted to cancel my ride as I had a meeting to get to, but I wanted to complete the experiment. When my driver arrived, the car was new and clean. No complaints. But by the time we sat in traffic and crossed the Bay Bridge from Oakland into San Francisco, the price was literally the same as a taxi. And it delayed my arrival by 30 minutes.

4) Pricing

lyft or uber vs taxi ridesharing cost and safety

Pricing for a ride share trip isn’t consistent. Taxi’s are transparent on how much they charge and most have the pricing displayed on the vehicle. During my last trip to Las Vegas, I spoke with a conference attendee. She complained the surge pricing was triple that of a taxi when she wanted dinner on the strip. And the taxi was ready to go right there. I also found this to be true during my last trip to Denver.

I’ve gone two years in a row for three days of Phish. The band is best known for their musical improvisation, extended jams largely influenced by Grateful Dead, Led Zeppelin, and their dedicated fanbase. The first year we went, we tried to order a Lyft. The price was about $150 to literally go 11 miles!

At 7 am in Times Square, I left my hotel.  My return flight home awaited. It was 30 degrees outside with some expected snow. Out of habit, I opened by Lyft app to find a driver 4 minutes away. As I exited the warm hotel lobby to the frigid air of the NYC streets, I saw a cab waiting right there. I waited a few minutes staring at my phone as the Lyft driver slowly creeped through traffic up the block. I asked the driver if he was available to take me to the airport, and he was. So, I cancelled that Lyft ride and walked straight into a fully insured, inspected vehicle with a professional trained driver. It was a flat fee of $55 which was the same price my Lyft app was quoting had I waited for it.

5) Supporting a local business

lyft or uber vs taxi ridesharing cost and safety

Supporting a local business rather than the corporate monopoly is another reason to consider when deciding between a Lyft or Uber vs Taxi. In a world where Google and Amazon dominate, it’s gratifying to support the local population directly. Most cab companies are the result of families passing down their businesses from generation to generation. In today’s world, it feels as if many businesses are struggling because of the monopoly of corporations that are taking over in so many industries.

It’s hard for me to be ok with living in a world where everything is giant corporation. What does that mean for the rest of us? As the world changes and modes of transportation evolve, many feel taxi cabs will one day be extinct. But many taxi companies are revitalizing and evolving their business models to withstand the test of time. They are upping their standards when it comes to the quality of vehicles they buy. Moreover, they are investing in technology to create booking apps so that they can appeal to the smart-phone dependent generation.

 

Although Uber and Lyft may seem like the cheaper and more convenient option, I strongly urge you to think about all of the above issues around big box ride sharing companies. Is it really worth risking your time, your wallet and most importantly your life – all because it feels easier?

 

More about us: American Business Insurance for taxi companies: https://abiweb.com/services/taxicab-insurance/

HyreCar CEO Thanks Us

HyreCar CEO Thanks American Business Insurance

In an interview with Nasdaq, HyreCar CEO, Joe Furnari, shared how American Business Insurance helped the company grow and succeed. It is our pleasure to work with this amazing company. Read below about the HyreCar company origins, the ways Uber and Lyft drivers can succeed despite obstacles, and the role of transportation network insurance.

The Origins of HyreCar

Three years ago, Joe Furnari was not the CEO of HyreCar. In fact, he was their first customer. At the time, he had a car in his garage that he barely drove. He was actually getting ready to sell his car when he came across the HyreCar start-up. So, he decided to give it a shot by listing his car for rent. When HyreCar had matched him to a driver, the three original founders were so excited they drove to Furnari’s house to meet their first client and be there when the driver came to pick up his car. The driver could then drive for Uber or Lyft. It didn’t take long for Furnari to see a profit by renting his car out, and he became so enamored with the business model that he eventually left his job at the time to become the CEO of HyreCar.

As insurance brokers, we get calls all the time from people who are looking to start a new commercial transportation business. Whether it be someone aspiring to start the next Uber and Lyft or someone who wants to start a small shuttle business, it is our priority to weed out those who are serious and have spent time in their business model, compared to those who woke up one day thinking it would be easy to hit the ground running.

HyreCar lyft uber insurance

 

Where We Came into the Picture

In 2015, our agency President Dave Haley and insurance industry veteran (as recently dubbed by BusinessWire) received a call from the two original founders of HyreCar. Marciano Kim and Abhi Arorahe, the HyreCar founders, found our auto insurance company via google. “I spent 3 minutes on the phone with the founders and immediately, I loved the idea HyreCar was going for. I knew there were a lot of people who wanted work (for Transportation Network Companies like Uber and Lyft) but couldn’t because they didn’t have a vehicle that qualified for it,” Haley said.

At the time, HyreCar and similar companies represented an untapped insurance market as well. Haley was tasked with what felt like an impossibility – to find an insurance company to charge per day, per mile, and per minute. After shopping the marketplace and many declinations, he finally found a carrier that was as interested in the business model as he was. And within a rapid 60 days, HyreCar was insured and able to really launch their platform.

Uber and Lyft Drivers Can Rejoice

There is a big problem for many people who want to drive for Uber or Lyft. The obstacle is obtaining a vehicle that meets Uber or Lyft company requirements. Many drivers have to rent cars and then have to procure insurance on that vehicle. Personal auto specifically excludes any use of your vehicle that generates revenue.

Many Transportation Network Company (TNC) drivers use their personal auto regardless, but technically this is risky. In the case of an accident while driving for Uber or Lyft, their personal auto carrier would deny the claim. Additionally, the driver would face  the possibility of cancellation and non-renewal. With HyreCar’s model, drivers are able to rent a car at an affordable price. Plus, they would obtain an insurance ID card through HyreCar that allows them to qualify for Uber and Lyft. The great news is it does not put them at risk for being cancelled for unauthorized use of the vehicle.

HyreCar CEO Speaks to the Importance of Good Insurance

Uber driver Lyft Driver insurance hyrecar

 

Since launching three years ago, HyreCar has expanded into all 50 states. They have provided solutions for a disrupted transportation, car dealership and insurance industry. HyreCar recently went public and CEO Joe Furnari was interviewed by Nasdaq. In the Nasdaq interview, Furnari attributes part of HyreCar’s ability to grow and succeed to partnering with the right people on the insurance side. Furnari spoke specifically of American Business Insurance. The video clips and press releases included in this article effectively articulate from Furnari on how HyreCar has helped drivers, car dealers, and the insurance industry step forward into this ever-changing transportation marketplace.

Written by Laura Loftus on October 16th, 2018.

 

For more information about insuring your shared economy or transportation network company like HyreCar, click here: https://abiweb.com/services/tnc-provider/

WATCH THE INTERVIEW BETWEEN NASDAQ AND FURNARI BELOW

WATCH ANOTHER INTERVIEW WITH FURNARI HERE: https://www.facebook.com/Nasdaq/videos/2638290029729362/UzpfSTI2ODE1MjMzOTg2NjU2NzoyMjg5Mjc2ODE3NzU0MDk5/

How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

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How to Insure Transportation Network Companies: A Detailed Guide to Getting your TNC off the Ground

Written by Laura Loftus on Monday, May 6th, 2019

Whether you are looking to start your own Transportation Network Company, On-Demand Delivery App or other Shared Economy business, one of the most important factors to consider is insurance! Sounds boring, I know. But as the world around us changes, insurance markets for transportation network companies are creating new structures and products. As an independent agency, American Business Insurance has direct relationships with all insurance companies currently writing specialized policies for transportation network companies.

Finding insurance for transportation network companies or other app-based businesses is no easy feat. As you may have already come to realize, most of your local brokers who specialize in personal lines don’t have relationships with insurance companies in this space. Many local brokers don’t understand what information to collect from business owners to present your transportation network company in the most insurable light.

Finding An Insurance Broker To Write Policies For Your Transportation Network Company

Most of the common insurance companies you may have already heard of are not writing policies because of the high-risk nature for transportation network companies. Insurance companies who are writing policies for transportation network companies are Surplus Lines carriers whose focus is in this specialized, technology driven market place.

Some people think that it is easy to join the long list of people who are trying to start transportation network companies to compete with those already dominating the world – Uber and Lyft. But in reality, the people who have created these transportation network companies worked for many years prior to actually launching.

To some, that might seem like a really long time but when an experienced insurance broker who is familiar with writing policies for transportation network companies asks you to assemble a list of items, it’s best to know exactly what you are getting yourself into. Don’t be fooled, there is a lot of prep, time and money that is required to build transportation network companies like Uber or Lyft.

transportation network companies

Minimum Premiums For Transportation Network Companies

As you might have anticipated, buying an insurance policy for transportation network companies is not cheap since most insurers in this space have minimum premiums of $75,000-100,000. We know, that is a lot of dough! The good news is, most of the carriers will accept a portion of that up-front and some even offer premium eroding endorsements. This means if your business doesn’t generate premium up to that amount within the year, they will carry over the credit to the following year.

Obtaining a quote requires you to find a broker who specializes in writing insurance for transportation network companies. Working with the right broker will not only save you time and money, but prevent you from buying coverages you don’t need and making sure that you have the ones you do. An experienced broker who is familiar with writing insurance for transportation network companies will know exactly what information to collect from you. They will also know how to present it best to the insurance markets who are writing policies for transportation network companies.

American Business Insurance Services, Inc.

Lucky for you, you found us! As an agency, we have been around long before ordering a ride from your smart-phone was an option. We specialize in public auto which means we understand more than anyone how transportation network companies operate.

transportation network companies

Items Transportation Network Companies Should Have Ready Before Calling Your Broker For A Quote:

Build the App:

  • One of the first questions I ask customers looking for insurance for transportation network companies is if the app is complete. Insurance company underwriters will want to download your app and make sure it’s working. Also, some companies have technology-based policies, meaning they integrate with your app to capture data on the drivers. Some even offer lower insurance rates based on favorable data collected (less speeding, hard stops, etcetera). Most policies for transportation network companies are usage based, so they have to be able to download your app and make sure it’s compatible with their insurance structure. Insurance companies often want to be able to pull reports from your app which include and are not limited to:

1. Knowing When A Trip Starts and Stops

2. How Many Miles For Each Trip

3. How Many Minutes/Hours For Each Trip

Business Plan & Projections:

  • There is a checklist of items the insurance company will want to see attached to the submission your broker sends. Your broker should be narrating to the insurance company all the hard work and thought you’ve put into creating these transportation network companies. Insurers will want to see a “pitch deck” which is something you might already have created to obtain investors. This document will present and explain your business model, why it is different from what is alreadyout there and how it will work long term. Some of the questions this document should answer are:

transportation network companies1. What are the company’s growth plans?

2. How will you monitor safety/loss control?

3. How is pricing structured so that the company is profitable?

 Safety and Training:

  • Safety and training is a big deal for insurers who are writing policies for transportation network companies. They will want to know what restrictions, checks and balances and training you will provide to drivers. They want to know how often you will check driving records and how often people have to pass background checks. The younger in age the drivers are that you allow to join your transportation network companies, the more expensive you can expect your insurance prices to be. Insurance companies want to know how you are going to prevent accidents from happening so that you build a positive reputation within the industry along side other transportation network companies like Uber and Lyft.

Bios on Key Officers/Investors:

  • Insurance companies want to know about the people behind the transportation network companies! If you want to join the group of dominating transportation network companies, they are going to want to know what experience you have, not only in transportation but also in being an entrepreneur. Take the time to write detailed bios for yourself and all other key members, officers and investors behind your transportation network company. Make sure to detail the knowledge and life experience you are bringing to the table in starting transportation network companies like Uber and Lyft. A well written, detailed bio will separate your company from all the rest and will give you a better advantage to better pricing on insurance for transportation network companies.

 Terms of Service & Privacy Conditions:

  • Although this may seem like a small piece of the puzzle to getting insurance for transportation network companies, most insurers want to see the liability of the app in regards to what they are promising to both their drivers and users. If you are a peer to peer platform, they want to see how the transaction will take place. Some of the questions that should be answered here are:

1. What Security Measures Are In Place To Protect The User?

2. How Should Complaints Be Filed?

3. What Terms and Conditions Does Your Company Adhere To? 

transportation network companies

Financial Balance Sheet:

  • Basically, a lot of what it takes to insure transportation network companies is having money, and a lot of it. Due to the hefty size of the minimum premiums for transportation network companies, generally ranging from $75,00-100,000, insurers want to make sure you not only have money to pay for the policy, but to also keep your business afloat and operating before you start turning a profit. It’s no secret that most transportation network companies do not profit until after the first year. Insurers want to see that you have raised money, not just for the cost of insurance but also for operating expenses, advertising and promotions.
  • When I review the balance sheet for transportation network companies, I know that most insurers want to see that you’ve raised at minimum $250,000-$1,000,000 in capital. Sometimes more. The reason for them wanting transportation network companies to raise this much money is because they know what it takes to gain traction in this unique space. They want to make sure the work they are putting in to quote and bind your policy will create a lasting relationship with you.

Guidance From American Business Insurance Services, INC

Starting any business takes time, research and money. We get phone calls from people daily thinking they are going to be the next Uber and Lyft. And believe me, we want you to make it big and compete against the monopoly that currently exists for transportation network companies. But in reality, we know that few of the phone calls we receive have actually taken the above steps which are required to make transportation network companies insurable.

If you have questions or need guidance, please give us a call and we will be happy to discuss over the phone! While some of the larger, corporate run agencies have the same relationships as us, few will offer the personal touch and value we have with every client.

Exclusive Contracts

Additionally, we have exclusive contracts with some companies that allow us to write at a lower minimum premium than others. We are an independent, family-run business with 75+ years of combined experience in the business insurance industry. We have invested in other transportation network companies, peer to peer and shared economy types of businesses. Most of us utilize transportation network companies and peer-to-peer apps regularly.

We literally have boots on the ground in this space and if you want the best pricing with the smoothest transaction – we are here for you!

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How to Save the MOST Money on Your Commercial Fleet Insurance Rates

ABI Transportation Experts Speak: How to Save the MOST Money on Your Commercial Fleet Insurance Rates

Written by Laura Loftus on Thursday, February 28th, 2019

 

When speaking with clients about their commercial fleet insurance, the most common concern is how to get the lowest insurance rates. About 100% of the customers I speak to daily all have the same goal – they want the lowest insurance rates available and will do whatever it takes to get it. Whether you own a Taxi, Limo, Paratransit or Shared Economy company (peer to peer platform app), it’s a given that you want your commercial fleet insurance coverage at the lowest insurance rates available. What many companies don’t realize, especially start-ups, is that commercial fleet insurance underwriters do quite a bit of digging on your company through a variety of platforms to “check you out” prior to releasing a quote. They read Yelp reviews, they look at your website, they do Better Business Bureau checks – all of it.

There are common mistakes that transportation service companies are repeatedly making that will create doubt in a commercial fleet insurance company. These mistakes actually prevent your broker from being able to find the lowest insurance rates for your company. Most of these companies think they are making business decisions that will guide them toward the lowest insurance rates, and are unaware that their current website or driver pool is actually hurting their chances of achieving the lowest possible commercial fleet insurance rate.

Five common flubs transportation service companies are making that prevent your commercial fleet insurance broker from obtaining the lowest insurance rates possible:

1) Company Website

The first and most common mistake we see from commercial auto risks who are in the “wheels” business as us underwriters call it – is that you over the amount of experience or size of your transportation service company.  It is common for commercial fleet insurance underwriters to google your company to pick apart your website. Here are some items you may think are helping your chances at obtaining the lowest insurance rates but are actually red flags to commercial fleet insurance companies:

  •  Words like “Fast Pick-up” or ‘Delivery in Minutes” – no commercial fleet insurance underwriter wants to see that you are promising rushed services. Rushing = equals unsafe driving behavior.

commercial fleet insurance

  • Advertising vehicles that are not actually part of your fleet. For example, just yesterday I was helping a 35-car fleet in Portland with obtaining commercial fleet insurance quotes. The list of vehicles they provided were all private passenger type vehicles (meaning seating capacity of 8 or less) – good! But when I searched the company online, they advertised a large shuttle bus and a higher seating capacity van. When I asked the client about this, they those vehicles had been sold and they had no plans to replace them. Keeping your website up to date and only advertising only what you can actually deliver will keep unwanted questions from creeping into the commercial fleet insurance underwriters’ mind. Creating uncertainty is the last thing you want to do with a commercial fleet insurance underwriter when trying to obtain the lowest insurance rates.
  •  Age of vehicles is important to commercial fleet insurance companies. Publishing a picture of a 30-year-old vehicle is no bueno. Keep your fleet serviced regularly (we recommend every three to four thousand miles and cycle out old units. Newer, cleaner & well-maintained vehicles are not only more desired by clientele (when trying to compete with Uber/Lyft) but also preferred by commercial fleet insurance companies trying to avoid claims due to mechanical defect.
  • If you boast 20 years of experience but your LLC was filed three years ago, it creates uncertainty with insurance companies. It’s better to accurately reflect your business as it is now, and not what you want it to be five years from now. Just as there are items to avoid putting on your website, there are points that you should include on your website. It is always a good idea to brag about highly trained drivers and safety training you provide (more on this later). Be sure to note the maintenance you keep up with for your fleet, the background checks the city you operate in mandates and the highest level of driving records required for your drivers. Commercial fleet insurance underwriters like stable fleets with safe drivers. Bottom line, safer risks translates to commercial fleet insurance underwriters offering the lowest insurance rates.

2) Creating a Business Name

This may seem simple enough but for transportation business owners looking to for the lowest insurance rates, people often think that commercial fleet insurance companies give the lowest insurance rates to Limo’s and Non-Emergency Medical risks over a taxi or airport shuttle. While this might be true, cornering yourself into a specific type of transportation in your business name narrows the list of commercial fleet insurance carriers you are eligible for. Many markets write only taxis or only limos. So, if you file your business name with the Secretary of State as Laura’s Taxi & Limo Service, LLC. – it could possibly make you ineligible for a limo commercial fleet insurance program because they don’t insure taxis and vice versa – even if your unit type meets their requirements. When talking with clients, I al