A look at how insurance telematics can improve TNC services
Insurance telematics is keeping an eye on what could become a new upcoming niche market: TNCs.
TNCs are “transportation network companies”, such as the all-popular Uber platform, which brings together paying passengers with drivers, who provide transportation on their personal, non-commercial vehicles.
At present, TNCs face a range of issues, especially in Europe, including claims of unfair competition and challenges to the use of personal insurance policies for commercial activities. Finding a solution to these problems, however, could provide a competitive advantage to insurance companies, with a potential for thousands or millions of new customers, or old customers with new insurance models.
Telematics insurance, which employs technological innovation to increase safety and reduce congestion on our roads, is looking to not repeat the errors of the past and provide support to TNCs.
Indeed, there was an Uber-like service long before Uber; had it survived, traffic congestion may well have been less serious in our cities and on our roads. In 1914, L.P. Draper, a car salesman aimed to solve the issue of the over-crowded trolley service in Los Angeles by allowing drivers to offer paid rides. By 1915, the Jitney Bus service, as it was called, provided 50,000 rides a day in Seattle, 45,000 rides a day in Kansas and 150,000 rides a day in Los Angeles. (By comparison, Uber currently provides 157,000 rides per day in Los Angeles, one hundred years later!) Alas, transportation companies lobbied for states to pass regulations that led to the demise of this futuristic service by 1919.
Today, insurance companies embrace innovation and are looking to promote this environmentally sound service by developing policies providing hybrid personal and paid-fare ride coverage. While telematics currently plays a minor role in TNC insurance products – prevalently smartphone apps to track and timestamp mileage – the sector is wide open for development. Telematics, for example, can help determine which TNC a driver is currently using and eliminate the risk of insurance fraud. It can monitor and rate driver safety and expertise, and provide tools to keep drivers’ eyes on the roads instead of on their smartphones, just to mention a few elements currently under study.
This time around, TNCs may blossom, thanks to the critical services provided by the telematics and data analytics revolution, and help reduce road congestion and related traffic issues.
For further information:
- Vehicle Insurance in the Era of Autonomous Vehicles
- Will 2016 be a Pivotal Year for the Auto Industry
- About Octo Telematics