Insurance challenges with Scoot Networks
By only having statutory minimum insurance*, using the ride sharing service could bankrupt you with a swift kick to the small-print-shaped gonads.
*) this has changed since I originally wrote this post. An addendum has been added to the end of this post, and the title of the post has been changed in 2018 to reflect the changed policies at Scoot.
I’ve been a motorcyclist for quite a few years, and am a reasonably good rider — but riding in the US scares me. In as few words as possible:
- Even if you’re an experienced rider, a motorcycle is not a particularly safe way of getting around in the best of times.
- A scooter is worse than a motorcycle, largely due to the tiny little wheels (i.e. less stability on bumpy roads etc) and the usually unimpressive brakes and engine.
- An electric scooter is even worse, because the car drivers and pedestrians haven’t a fighting chance of hearing you come*.
- An electric scooter with an unknowable maintenance record in a city that isn’t used to sharing the road with 2-wheeled transportation…? Yeah, that’s a tough one.
Despite all of the above, I’m excited about Scoot. On-demand, non-polluting, one-way rentals of electric scooters sounds pretty nifty.
*) Some people claim that ‘loud pipes save lives’, but that is hogwash. More importantly, loud motorbikes are annoying to everyone except the person on the bike, and if enough motorcycles are loud, car drivers and pedestrians start to rely on the sound. That’s bad for all motorcyclists, whether people are on electric bikes, or bikes with a merely mediocre noise level spewing out of their tail pipes.
Taking a look at the Scoot Networks insurance policy
Smarter people than yours truly live by the “Hope for the best, prepare for the worst” mantra. As a natural pessimist, I decided to figure out what the worst case scenario was with riding around on a Scoot.
I took a look at their FAQ, to find out what happens if something goes tits up, expecting to find some very reassuring words along the lines of “Don’t worry, we got you covered”. Instead, I found a reference to ‘basic 3rd party liability insurance’, which links to the membership agreement.
A little worried, I head over to their membership agreement, where I found the following:
Now that all sounds good and well, but £15k per person, $30k per accident, and $5k of property damage is… extremely low. It’s worth noting that those numbers are the minimum legal requirements under California law:
Why does it matter?
Well, insurance isn’t meant to add insult to injury — if you’ll forgive my turn of phrase— but I don’t know if you’ve ever been in a car accident and you’ve seen the hospital bill at the end. If you have, you’ll realise that any of those numbers are… Insufficient.
If you do end up in a situation where you’re liable for someone else’s medical costs, you’d be liable for lost earnings and future lost income, too. That all adds up quickly, especially in a city like San Francisco, where wages tend to be on the high side.
Best case scenario is that you’re being sued for $2m, and the Scoot insurance plan covers you for… $14,500, so you’re on the hook for $1,985,500.
Assuming a moderately serious accident where you’re causing a serious injury (say, a broken leg)… Well, suffice to say that between ambulance costs, personal injury claims, and ‘pain and suffering’ type damages, all of this adds up.
One automotive settlement calculator we looked at estimated that the damages you’d be liable for would be anything between 2 and 5 million dollars — excluding any legal fees incurred in the process (legal costs also appear to not be covered by Scoot’s insurance), but lawyers are pretty cheap*, so we can gloss over that bit.
The best case scenario here is that you’re being sued for $2m, and the Scoot insurance plan covers you for… well, $15,000 of that. Except you also have a $500 deductable, so you’re covered for $14,500, and you only have to pay up $1,985,500.
Which, if you’ll allow me to state the obvious, is an awful lot of money.
*) For the sarcastically impaired: Lawyers are not cheap, but I wouldn’t even know where to start estimating that part of this calculation.
What’s the upshot?
I wasn’t able to find anybody who’s had to test the Scoot Networks insurance plan to its breaking point. Maybe it hasn’t happened yet — but that is a question of when not if. And when it does happen, they’re going to have one hell of a nasty PR story and a customer exodus on their hands.
Scoot claims its pillars are ‘Be Seen, Be Safe, Be Nice’, but it’s hard to imagine how not looking after your own customers from an insurance standpoint covers the last of those three.
It’s worth mentioning that other ride-sharing services have vastly more sensible insurance policies in place. The combined limit at Scoot is the equivalent of $50k — compare that with RelayRides ($1m), City CarShare ($1m), Getaround ($1m), Zipcar ($300k), and pretty much every other operator I could find in this space.
Does that mean you should avoid Scoot?
Short answer: Probably; for now.
Long answer: It depends on your risk profile. There is a limited risk of getting in an accident. If you do get in an accident, there’s a limited risk that you do enough damage for it to be a problem. If you do do enough damage, it may not be a lot more than the insurance policy. And if it is a lot more, the other person may choose not to sue you. So, granted, you may never run into this issue… But In my mind, the whole point of insurance is to ensure that you have peace of mind and be sufficiently covered so if the worst should happen.
Personally, I’m not willing to take those risks, and I would recommend you do neither.
I’d hazard a guess that Scoot will probably decide to offer more sensible insurance terms eventually. When they do, I look forward to becoming a regular customer, but until then, the service simply doesn’t add up.
And then they blocked me on Twitter.
25 days later, I decided to try and follow up with Scoot. I discovered they had suspended my Scoot account, blocked me on Twitter, and still hadn’t responded to my e-mails.
I blogged about that, too, over in my customer service blog.
Update: They raised the insurance limit to $1m
2 years after I originally wrote this post, I checked the Scoot website again. It appears they have now raised their insurance limit to a more sensible $1m, which means that this blog post is now mostly moot.
I’ve today (19 Jan 2018) edited the title of this post from “Scoot Networks, and why to avoid them” to its current title.