Ridesharing company spends nearly $1 billion to self-insure

Documents filed with the federal securities agency reveal that ridesharing company Lyft has spent nearly a billion dollars to essentially insure itself against certain risks. A prospectus recently filed by Lyft with the US Securities and Exchange Commission detailed that the company has established a subsidiary, through which the ridehailing firm has set aside so-called “restricted reinsurance trust investments” of $863.7 million. Lyft reasoned that it had created a captive insurance unit because it assumes a variety of risks – which include bodily injury, property damage, uninsured and under-insured motorist liability – whenever their affiliated drivers become available on the Lyft app, up until their passengers arrive at their destinations. Purchasing insurance for such risks could take its toll on Lyft, especially when its affiliated drivers take on multiple rides per day. The Wall Street Journal reported that, in the fourth quarter of 2018, the company recorded a daily average of about two million rides.