Many of us have seem them, and many of us have likely had the same reaction — those eScooters zipping along on sidewalks and streets, seeming to barely miss hitting cars and pedestrians, or being foiled by cracks, potholes and other obstacles. Scooter riders might not even be wearing helmets, which can make others feel as though they are about to witness a serious accident.
Excuse the public service announcement scare tone, but it’s in service of a larger point. As the market for so-called specialized mobility options increases (we are talking not only shared scooters and bikes, but even boats and small planes, to say nothing of drones), the question of how to insure those rides and riders takes on more importance. That’s both a basic economic and rider security concern, and — at least, indirectly — related to regulatory issues as local officials seek to impose more rules on this growing space of commerce and digital payments.
In a new PYMNTS interview, Tomer Kashi, CEO and co-founder of VOOM, spoke with Karen Webster about how to best provide on-demand insurance to users of eScooters and other such vehicles — a discussion that comes amid other early efforts to refashion insurance for the age of ridesharing, as well as connected and (soon-to-be) autonomous vehicles. Among the main keys of that effort is the ability to collect and analyze granular data, not only about how well the operator handles such modes of transportation, but to combine that with information about the weather and broader transportation environment to come up with a profitable and attractive risk model.
Save for drone coverage, VOOM doesn’t actually sell the insurance — not quite yet. However, it just came out of “stealth mode,” and has secured $5 million in a Series A funding round led by Arbor Ventures, with participation from returning investors F2 Capital, Verizon Ventures and Kaedan Capital, as well as new partner Plug and Play Ventures.
VOOM already has experience in insuring commercial drones. Yet, Kashi told Webster that he’s “an avid eScooter rider — every day to work, twice a day. It’s very risky; I see it firsthand.”
The goal is to offer insurance by the ride or via a monthly subscription, with both third-party liability and personal injury protection. VOOM doesn’t insure the actual scooters, though — that’s the responsibly of the companies providing them. The path VOOM is trying to blaze is sure to be imitated in some ways by others, as long-standing models of vehicle and other transportation ownership give way to more sharing, renting and on-demand mobility services.
The VOOM proposition would seem to be right on the money — at least, going by certain reports. While Kashi said it’s still “too early” for comprehensive statistics about the frequency and severity of eScooter accidents (most of the PYMNTS interview focused on eScooters as a prism through which to view on-demand insurance), a new report backed by the federal government has concluded that the first ride on an eScooter is the most dangerous one. Training, mandated use of helmets and the avoidance of riding while drunk or high all play major roles in reducing the risk.
Risk And Opportunity
However, there is always risk — and, in risk, there is always opportunity. In the case of VOOM, that means reaching riders and other users of specialized mobility via mobile apps, and through integrations with Mobility-as-a-Service providers.
Kashi said he envisioned the company’s offerings being promoted via pop-up ads through those providers’ websites or (more commonly) mobile apps. The need is clear, he noted.
“There is no adequate insurance solution for this market because it’s so new,” Kashi said, underscoring the fact that, even now, the insurance industry is not often thought of as a hotbed of innovation (though on-demand services and the rise of wearables could soon change that). The products offered for shared eScooters, bikes, boats, planes and other modes of transportation that are typically used on an occasional basis tend to be “outdated, one-size-fits-all products.”
When it comes to offering on-demand insurance, the “secret sauce” is building the right risk profile to underwrite the policies, he explained. In general, the process works like this: The company sets a “certain benchmark” for the specific mobility activity (a set premium), then uses data and machine learning to tailor that premium to specific users and use cases. “Over time, that rate is changing,” Kashi said. Indeed, that’s the general ideal emerging for insurance as transportation changes in this 21st century digital economy.
Kashi added that, for a typical scooter ride (one that covers about a mile, and lasts 10 to 12 minutes), the ride cost is about $3. The insurance premium will be a small fraction of this ride price.
With more use of scooters and similar modes of transportation (and more consumer desire for on-demand insurance), more data about how those modes are used, and the risks they pose in specific contexts, will emerge. That will guide the development of this industry. After all, it’s not the product counts — without the proper payments regime in place, the whole ecosystem could find its growth arrested.