As the ridesharing industry grows worldwide,1 some Australians may be considering the financial opportunities offered by the gig economy.
But before you sign up to earn extra money as a rideshare driver, there are several factors to consider, including rideshare company insurance requirements and personal car insurance, to help you make an informed decision.
Worldwide, the ridesharing industry is expected to be worth around US$216 billion by 2028.1 Uber – which accounted for 80% of all rides in 20232 – says in Australia, more than 150,000 drivers use their platforms to earn money as drivers or delivery people.3
In this article, we’ll explore how rideshare insurance works, what types of coverage are available, and what you might consider when choosing insurance as a rideshare vehicle driver.
What is ridesharing?
Ridesharing allows drivers to use their personal vehicles to transport passengers for a fee,4 and is typically coordinated through apps such as Uber, DiDi and Shebah.
Since Uber was launched in Australia in 2012,5 the local ridesharing industry has grown to be worth an estimated $756.8 million in 2024.6
For drivers, ridesharing offers flexibility and a potential source of income. However, it does come with responsibilities – for example, gaining an understanding of how insurance for rideshare drivers works can be helpful before picking up your first passengers.
Do rideshare drivers need CTP insurance?
Compulsory Third Party (CTP) insurance is a legal requirement for all drivers in Australia. According to Moneysmart, CTP covers compensation claims if you cause injury or death in a car accident.7
In the Australian Capital Territory, CTP is known as the Motor Accident Injuries (MAI) Scheme,8 while in New South Wales, it’s also known as a Green Slip and covers both at fault and not at fault incidents.9
Youi’s CTP insurance in New South Wales and South Australia includes coverage for rideshare passengers.10 Drivers in other states and territories should confirm with their CTP provider whether ridesharing activities are included.
“CTP insurance covers costs such as treatment, care and rehabilitation, and may cover loss of income and damages in some states,” explains Glen Robinson, Youi’s Head of Product – CTP.
“In New South Wales, for example, there is also limited coverage for injuries to the driver at fault in an accident.”
What types of car insurance cover ridesharing?
In addition to CTP insurance, many rideshare platforms stipulate that drivers must have at least third party property damage insurance, with some recommending or requiring comprehensive car insurance coverage.11
Regardless of the level of cover, rideshare drivers should inform their insurer of ridesharing activities – not disclosing this information could void the policy or lead to a claim being refused.11 Before taking out any insurance policy, it can be helpful to read the product disclosure statement (PDS).
Other than CTP, there are three main types of car insurance to choose from:
- Comprehensive
- Third party fire & theft
- Third party property only
Marni Jackson, Youi’s Head of Product for Vehicle, Lifestyle and Leisure, notes that Youi doesn’t offer a specific rideshare car insurance policy but does cover rideshare drivers under its standard car insurance policies.
“When requesting a quote for car insurance with Youi, rideshare drivers must specify ‘business use’ and select ‘Taxi – Uber and other ridesharing services’ as the business type,” says Jackson.
Comprehensive car insurance
Comprehensive car insurance provides the highest level of coverage, including protection for your vehicle, third party property damage, and damage caused by theft and some natural disasters such as flood and fire.7
Third party fire & theft insurance
Third party fire & theft insurance typically covers damage that your car may cause to someone else’s property and also protects your vehicle in cases of fire or theft.7
Third party property insurance
This type of insurance covers damage caused to another person’s car or property but does not cover your own vehicle at all.7
It's important to note that third party fire & theft and third party property insurance generally don’t include coverage for accidental damage to your own car. So, if you’re at fault in an accident, you’ll need to pay for any repairs to your vehicle. As with comprehensive car insurance, rideshare drivers must disclose their business use.11
Do I need car insurance as a rideshare driver?
Different rideshare companies have varying policies, so it’s a good idea to check with them directly to make sure you meet their insurance requirements before signing up as a driver.
- Uber: All cars driven by Uber’s ridesharing drivers must be registered, have CTP insurance in their state or territory, and have at least third party property insurance. The driver needs to be named as the policy holder or a named insured driver.12
- DiDi: DiDi requires all vehicles to have CTP insurance as well as a third party or comprehensive insurance policy. There are also additional state-based requirements, so it’s best to check based on your location.13
- Shebah: Full comprehensive insurance is required for all Shebah drivers, as well as the relevant CTP insurance for your state or territory.11
Some rideshare services may require your car insurance to include a “rideshare condition” so it’s best to check your individual policy.11
How much does rideshare insurance cost?
Like any car insurance policy, the cost of rideshare insurance depends on a range of factors, which vary between insurers and the type and level of cover selected.
Factors that insurers may consider when setting your premiums include:14
- Your age and driving experience
- The age, make, model and security features of your vehicle
- Where you live and where your car is usually parked
- Your driving history, including past insurance claims and any demerit points on your record.14
Youi’s car insurance calculator page may help you understand the potential costs so you can choose the cover that aligns with your needs as a rideshare driver.
What does my rideshare company cover?
Some rideshare companies may offer supplemental insurance to support drivers during trips, but these policies vary and can be confirmed by each company.
As an example, in Australia, Uber provides a support package for driver-partners at no extra cost.
“Driver-partners who earn on the Uber platform are covered by a support package, which includes insurance should an accident or injury occur while driving,” explains Uber spokesperson Nick Vindin.
This supplemental package is for certain personal injuries and doesn’t cover any damage to the driver’s vehicle.15
Are my passengers covered?
If you’re a rideshare driver, you’ll want to know you’re covered for any injuries to your passengers if you have an accident.
- CTP insurance: Your CTP insurance may cover medical and liability costs if your passengers are injured in an accident caused by you.11
- Platform-specific insurance: This varies between rideshare companies and can be confirmed directly with them.
How to get rideshare insurance
Getting insurance as a rideshare driver generally involves a few steps. If you’re looking to insure with Youi, Jackson notes some important things to remember:
When purchasing or updating your car insurance, tell Youi that you’ll be using the vehicle for ridesharing.
Consider the right coverage for your individual circumstances, thinking about whether you can live without your car if it’s a total loss or stolen, and if you can afford any expenses associated with damage to someone else’s car if you have an accident.
If you start ridesharing after purchasing your policy, notify Youi immediately.
What to do if you have an accident as a rideshare driver
Accidents can happen, no matter how carefully you drive. For that reason, Jackson offers these pointers if you’re involved in an incident while ridesharing:
- Prioritise the safety of all involved and call 000 if medical assistance or police are required.
- If possible, move your vehicle to a safe location to prevent further damage.
- Take photos of the accident and gather details from all involved parties, including their full name, address, phone number, driver’s licence number, vehicle registration number and insurance details.
- Notify your insurer immediately.
“Clear communication with your insurer is crucial after an accident,” says Jackson. “Providing accurate details can ensure a smoother claims process.”
Ridesharing may offer exciting earning opportunities, and having the appropriate insurance can help protect you, your passengers and your vehicle.
If you’re considering becoming a rideshare driver – or already are one – and would like to learn more about your car insurance options, consider starting a quote with Youi for insurance that’s a bit more you-shaped.
1 Source: Statista – Forecast: Ride-sharing market size worldwide – 2017-2028, April 2024
2 Source: University of Queensland – Ola has left Australia. What does it mean for the future of ridesharing in Australia?, April 2024
3 Source: Uber – A landmark moment for Australia’s gig workers, February 2024
4 Source: Australian Taxation Office – Ride-sourcing, June 2019
5 Source: Uber – Uber celebrates 10 years Down Under, September 2022
6 Source: Ibis World – Ridesharing Services in Australia – Market Research Report (2014-2029), May 2024
7 Source: Moneysmart – Choosing car insurance
8 Source: ACT Government – Your MAI insurance
9 Source: NSW Government – CTP insurance (Green Slips)
10 See the Car PDS for full details.
11 Source: Canstar – Rideshare insurance for drivers, September 2024
12 Source: Uber – Rideshare and delivery insurance
13 Source: DiDi – DiDi Driver - Drive with DiDi
14 Source: Canstar – How much does car insurance cost?, September 2024
15 Source: Uber – Support for driver and delivery people
