LONDON — There’s an annoying — and often costly — problem facing the couriers who deliver your UberEats and Deliveroo on-demand meals.
They are required by law to have commercial insurance on their vehicles, in case of accidents and so on. But unlike traditional full-time workers (van drivers and so on), many “gig economy” couriers only work part time, operating on a self-employed basis and juggling the work alongside other jobs or studies.
Couriers can be laden with a nasty fixed insurance bill, even if they’re only working a few hours a month.
This is what London startup Zego is trying to solve.
Founded by two ex-Deliveroo employees (Harry Franks, Zego’s CEO, and Sten Saar, the company’s COO) as well as Stuart Kelly, CTO (formerly of office rental startup Hubble), in 2016, it provides pay-as-you go insurance to gig economy workers.
“We are trying to use technology to bring together insurance and on-demand workers in order to empower on-demand workers to work flexibly,” CEO Harry Franks told Business Insider.
He argued that traditional insurance products are “not fit for purpose.”
If you’re paying up to £1,500 a year for commercial insurance, that costs £125 a month — meaning you’d have to work at least four hours a week on minimum wage just to break even. While at Deliveroo, he said he saw drivers put off by this, and that this “constantly monthly outgoing … means they had to work,” even if it’s not convenient — undermining the flexibility that supporters of the gig economy trumpet.
Zego, he said, tries to make sure that “insurance costs become proportionate to their income.”
In December 2016, the company raised a £1.2 million venture capital investment led by LocalGlobe, and it is now publicising the funding round.
Zego currently covers moped couriers for Deliveroo, UberEats, Amazon, Jinn, and Quiqup, charging from £0.65 per hour, but it is preparing to launch a similar product for commercial drivers — letting it expand into other sectors of the gig economy, like Uber drivers. (“We’re working with interesting partners at the moment to help facilitate that,” Franks said.)
It is also offering as an add-on insurance to provide for employees if they’re unable to work — but Franks stressed that the pay-as-you go insurance is their core product.
And off the back of the investment, Zego is also eyeing up an expansion into other European countries within the year, and is in the process of raising further funding.
The firm isn’t disclosing its valuation, or revenues, but said it is not currently profitable.
The gig economy in Britain has come under increasing scrutiny over the last year or so, with protests from workers and legal battles over employment rights. In July, the government-commissioned Taylor Report was published — calling for an overhaul of the sector and new legal categorisation (“dependant contractor”) that guarantees rights for workers.