Gig economy insurance startup Upcover goes national with food delivery partnership

Gig economy insurance startup Upcover goes national with food delivery partnership

After five food delivery worker deaths in the past two months in Australia, two of which have occurred since last Saturday, the precarious nature of the gig economy has become a hot button issue prompting a taskforce investigation from the NSW Government.

But the trend towards the gig economy, especially following mass job losses due to the COVID-19 pandemic, is here to stay and will continue to pose challenges for the welfare of anyone involved.

The underlying issues of financial security and the risk of injuries are what led Sydney-based entrepreneurs Skye Theodorou and Anish Sinha to seek solutions for gig workers, founding their startup Upcover last year to simplify what are often complex insurance schemes and empower this growing portion of the population.

"We believed that people should be able to have the option to be informed and build a safety net, either through the protection of insurance products or employee benefits-type products," says Theodorou (CEO), who along with Sinha (COO) is a finalist in this year's Business News Australia Sydney Young Entrepreneur Awards.

"If you're working for yourself, why shouldn't you still be able to accrue some kind of sick leave or holiday leave, and be able to do that with some of your own income?"

To make this vision a reality, in May the company secured a partnership with one of the world's oldest insurers Lloyds of London, and raised around $900,000 including backing from global venture fund Antler.

The Upcover business model will eventually target most of the gig economy more broadly, but the logical place to start was with food delivery through a soft launch in October with Sydney Ebike Rentals (SER), a service specialising in electronic bikes for delivery riders.

"We started with the food delivery segment that has just boomed throughout COVID and built out a bite-sized product which is $0.95 a day for one to three different products; that's to protect their bike or bicycle, in case they injure other people or damage other property, and to protect themselves in case they're injured," says Theodorou.

Following the success of that launch, Upcover's tailored pay-as-you-go insurance has been rolled out nationwide in partnership with EASI, a leading Asian food delivery platform in Australia with 20,000 food delivery workers.

Theodorou explains one in 10 Australian workers were in the gig economy including more than 80,000 food delivery workers who currently make more than 150 million deliveries each year and contribute $6 billion to the national economy.

Meanwhile, in the USA the figure is closer to one in five and is set to eventually trend towards one in three - a path Theodorou believes Australia will eventually follow as well.

"The majority of food delivery workers are highly qualified international students who turn to food delivery platforms as a way for them to earn an income. They will often work for a platform such as Uber Eats, Deliveroo, EASI or DoorDash," says the entrepreneur, who formally worked at Zurich Insurance while Sinha was previously head of business at Sequoia-backed Nearbuy.com.

"However, these platforms are not considered to be their 'employer'. This means these 'workers' have limited access to the benefits that most 'employees' would gain such as protection against injuries and accidents while they work."

She says recent fatal accidents have triggered demand for an insurance product capable of covering worst case scenarios, as well as the day-to-day requirements of food delivery workers such as covering bike theft and Upcover's contemporary 'COVID-19 relief' cover.

Theodorou says these products are Australian Financial Services Licence (AFSL) compliant and are available on iOS and Play Store.

The pair also intend to expand upcover's products to cater to the insurance requirements of more than 280 occupations now working in the gig economy such as cleaners, tradespeople, beauticians, professionals and freelancers. The market potential in Australia just for upcover's core products alone is more than $2 billion.

"Insurance for delivery drivers is just the start for us. With so many essential sectors now working for themselves - from tradies to beauticians, cleaners, consultants and aged care contractors - it is time that affordable cover was offered to those who work independently, and as simply and easily as possible, and we will meet that demand," says Theodorou.

"The gig economy isn't going anywhere, and will continue to thrive beyond the pandemic. Protection for these workers needs to be improved long-term, for food delivery workers and all other sectors of the gig economy.

"We have had the unique experience of writing our own policies based on feedback we have received from delivery drivers themselves. This way, we have been able to replace traditional complex wording and policies from the 70s, into the modern age."

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