Rideshare drivers celebrated while Uber and Lyft castigated the California judiciary last week after Alameda County Superior Court Judge Frank Roesch declared the controversial Proposition 22, which exempted rideshare companies from classifying drivers as employees, unconstitutional. Efforts to secure expanded benefits and protections for gig workers have gained a higher profile, and there’s good news on the horizon for independent workers in search of insurance coverage.
Insurance platform InShare has announced a new seed funding round of $5 million to further build out its cost-saving insurance solution for both employers and workers in the sharing economy. The company estimates that 20,000 users are already taking advantage of its services, but it expects to use the additional funding to reach as many independent workers as possible.
“Think about it as bringing the scale that a Fortune 100 employer would to give great benefits to its employees, but doing that at scale for independent workers,” CEO Mark Warnquist told Modern Shipper.
For employers, InShare offers an array of services including next-generation products that reduce insurance costs, plus loss control expertise and an end-to-end claims solution. For workers, the company strives to maximize subsidies to provide high-quality insurance at a reduced cost. Benefits are portable, meaning they can apply to any number of sharing economy companies with which a worker does business.
A different approach
The new seed round, led by ManchesterStory and The Hive, brings InShare’s total funding to $7.5 million. The company plans on using the funding to build out its technology, as well as expand into untapped markets and launch new ventures.
“A lot of insurtechs start with the tech and then build out the insurance,” said Warnquist. “We’ve done the reverse.”
InShare started off offering commercial auto products to last-mile drivers and platform companies, building out the required insurance infrastructure. Since then, the company has expanded to offer cargo, general liability, workers’ compensation and occupational accident services. Now, it plans on evolving again.
“We need to be able to be facile and quick in delivering products for the sharing economy. That requires technology to be able to do that,” Warnquist told Modern Shipper. “So we’re building out tech and investing in regulated products to be able to be facile, and do something different than the rest of the insurance world is doing.”
Alongside the seed funding, InShare announced two new hires to do just that. It brought on Brandy Mayfield, who previously ran Allstate’s $600 million Shared Economy insurance program, as its chief underwriting officer and Pooya Sarabandi, an insurtech veteran who helped start and scale several startups, as its chief technology officer.
The company is building out its own Silicon Valley tech team, led by Sarabandi, in real time. It’s also made investments in two insurance platforms, Snapsheet on the claims side and Salesforce on the policy side, to optimize the services it already has in place.
Insuring workers ensures success
Specialized insurance is an essential piece of the sharing economy for several reasons. For one, it’s often required by regulation, which rideshare companies and other transportation network companies like Uber and Lyft were instrumental in pushing forward. It’s also necessary to protect workers — and the balance sheet.
“Traditional insurance isn’t really built for sharing assets. It’s really not built for the blend of commercial and personal insurance either,” said Warnquist. “Traditional insurance just doesn’t meet many of the needs — it meets some of them, but it doesn’t meet many of the needs of the users in the space.”
Asked about how Prop 22’s reversal might impact InShare’s goal of providing expanded coverage to gig workers, Warnquist was bullish. He cautions that the decision might not have much staying power, but he says that its impact might be more symbolic in showing states and companies that protecting gig workers can help them turn a profit.
“It’s not only the right thing to protect workers, it’s good business. Because if you don’t protect workers, you’re going to get more of these kinds of decisions,” he explained.
The legal back-and-forth surrounding gig workers has already proved costly — Uber, Lyft, DoorDash and others spent a combined $200 million pushing Prop 22, making it the single costliest ballot measure in California’s history. There’s no telling how much they could lose if bills they’ve invested in in other states, like Massachusetts Bill H.1234, are struck down by the courts.
While it’s clear that courts view Prop 22 as flawed, Warnquist sees H.1234 as a potential way ahead. Unlike the California ballot measure, it would create a third classification for workers that lies between employee and independent contractor, allowing gig workers to gain some of the benefits of full employment while holding on to the flexibility that makes gig work so attractive.
While Warnquist crosses his fingers in hopes H.1234 will pass — which could take awhile — InShare won’t let any maneuvering by Uber and Lyft in the wake of the Prop 22 ruling slow the company down.
“There’s more that we’re going to do in this space, particularly providing benefits to independent workers,” he said. “This kind of decision, in my mind, it’s not going to slow us down one iota. And it might even cause us to accelerate.”