So, I finally did it! I decided to give Shipt a go a few months back, and see if it lives up to the hype that my working-mom and professional girlfriends were all claiming and raving about. And, oh dearie my! They were absolutely on point!
I am happy that I can now do my weekly grocery shopping while in the comfort of my own home during the pandemic. I also thought that once things in the world got way better, I can do this while chilling at any airport cafe or in transit between classes and conferences, is the thing that got me so hooked!
Many people say all the time that time is our biggest resource. Well now, I am saving at least 5 hours a month that I would use for roaming grocery store isles, waiting how many minutes at the checkout, lugging and hauling groceries (one of the worst since I buy bottled water since our family doesn’t drink soda) and also doing so regardless if it’s a wonderful day and I could be at a lake or if it’s a snowy blustery day where I freeze on the way into and out of the store. Let’s be honest until I’m back home an hour or more in the heat.
What’s even better now is that I know I’m saving money. I’ve done the math for it. I am spending $99 a year for their service. But those 60 hours a year I am saving is definitely worth it for me. Plus, I don’t do impulse buying anymore in the grocery store since I already had my hands off to it. I don’t need to throw out or donate to a food bank as the expiration dates get closer and I forget to plan a meal around the item I had to have just because it was already 50% off.
So, how does this relate to insurance? I then asked Shipt drivers about their auto insurance while using it for this business. But, none of them answered that they see it as a business. I haven’t heard them say that they called their insurance agent and asked about it. Instead, they answered, “Why would I call insurance agents? I’m just grocery shopping.”
Yes, it’s just grocery shopping for others, while being paid, sometimes done every day or sometimes 3-5 runs a day.
The insurance issue here is definitely huge. Personal auto policies have a notable exclusion that only insurance gurus can attest what is “well-known”. Most clients basically don’t have an idea using their vehicles for business. Conveyance or livery service is excluded. This basically means that they don’t hint at it or even suggest it. But, the policy already spells it out for you. An example of which are the following:
Liability Coverage does not apply:
a. To any person for bodily injury or property damage resulting from any automobile while used as a public or livery conveyance.
In English, public or livery conveyance technically means hauling around people or items and being paid to do so which is exactly what Shipt, Uber, and Lyft are all doing.
Insurance companies place these exclusions into personal auto policies since they do not want to insure business-owned vehicles. These people who do work for Shipt are spending a large part of their lives in their vehicles which increases their chances of meeting an accident and some of them are carrying around passengers which increases the chances of multiple injuries the insurance company could be forced to pay for. This is where a business auto insurance policy comes in.
So, these driving and delivering conveniences have been existing for anywhere from months to a couple of years depending on your location so isn’t it time for insurances to step up their game and find ways to insure these issues, right?
Well, it technically depends.
Don’t you just love insurance? – No? – Am I the only one?
Unfortunately, insurance has a slow approach to these kinds of new exposures since they need to give them time to evolve. It takes time for people to learn the exposures and how the companies are going to self-insure, accidents, lawsuits, juries, verdicts, and resulting case law for them in order to figure out how to amend policies with more exclusions to not insure. You also have to know if they are ok with providing the coverage, the proper endorsements, and the premium charge to add the coverage.
Many people assume or even tell me that Shipt covers them so they are absolutely fine. But yes, how many are actually reading the contract and be really informed what Shipt is covering. About as many as read the rental car agreements, we get calls yearly.
The most recent information I have read about Shipt’s provided insurance is that it is something that works for liability when the driver is on an active delivery which is a term they define. Take note: Whenever you see quotation marks (“) in insurance, it means they are defined elsewhere in the policy.
So, imagine these scenarios:
How about damage to your automobile when you suddenly slide on ice while trying to maneuver your car out of a client’s driveway?
What will happen when you rear-end their parked vehicle on your way to their driveway or how about when another vehicle in their village as you are leaving?
Another worse scenario we can imagine is what if you run over a child riding a bike or who began playing behind your vehicle while you were in the house dropping off packages?
Once you have completed that delivery, coverage already stops with Shipt for liability and if your policy contains the exclusion as we have defined above, it will not pay for any of these scenarios. You might ask why. This is because if you were not using your vehicle for a business, it would not have been involved in those accidents.
So, when these things happen, you have to use your own checkbook in a lot of cases. You will have to fix your own vehicle, also pay to fix theirs, and hire your attorney for possible lawsuits that could result in out of injuries to others.
I’ve always said that insurance is really all about whose expenses do you want to be used, yours or theirs? I can tell you that ours include a lot more zeros than most people and that is much less painful for you when we can protect your bank account, defend and make you whole than when you must use your own money.
The very conclusion is you need to be in contact with your insurance agent when you begin doing any of these services. There are different ways to protect you properly and yes, it’s going to cost more. But, we cannot do that if we don’t know the new exposures you have opened yourself and your family.
How Shipt Works
Let us give you an idea of how Shipt works.
Shipt is an online delivery service that is more than just buying groceries and has a lot of similarities with gig economy services such as Doordash and Postmates. Shipt operates by paying contractors to shop for, purchase and deliver groceries and other items directly to your door just like those similar services. This service allows you to choose from different groceries, office supplies, pet, and drug stores and you can place orders through their mobile app or through their website.
Is Shipt worth it?
Shipt is a subscription service that you can’t use outside of a free trial period without spending money. You can opt to pay monthly or yearly. They can offer you a nice discount if you pay early so there are ongoing expenses associated with using the service even though you use it weekly or rarely use it all. Whether or not Shipt is worth it totally depends on factors how busy your schedule is and how often you think you’ll use the service and also if you can afford the subscription. Some subscribers find Shipt to be a good deal since they don’t have time to have grocery shopping anymore. While, for some, they don’t feel the need of unnecessary luxury.
The average Shipt shopper earns between $17 to $20 an hour, already including tips.
One of the things that Shipt is good at is scaling very quickly and launching cities very fast. This is according to Bill Smith, the founder of Shipt. They have a whole team dedicated to hiring the shoppers in the market and it’s a huge process.
The average Shipt shopper earns about $17 to $20 an hour and already includes tips. Customers are not actually required to pay tips. However, they often do.
They really didn’t have tipping in the app when they started Shipt. According to Smith, they had so many customers requesting this feature to be added to the app since they often do not carry cash to give to the Shipt shopper. So, they decided to add it in the early days of the company and the customers find it absolutely convenient.
The hiring process of Shipt shoppers starts out by filling out applications on their website. They are interviewed by video, go through a thorough background check and screening. The process only takes a few days.
The shoppers can be as young as 18 in Colorado. However, the average shopper is a 35-year-old woman. Requirements include at least one year’s experience as a licensed driver, an automobile that was built after 2000, the ability to lift at least 25 pounds, an insulated cooler bag, and also knows how to navigate a phone app. Also as part of the screening process, shoppers are also asked about driving tickets and convictions for theft or felonies.
The system is similar to being an Uber driver. Shoppers make their own schedule. There is no minimum or maximum amount of time they must work.
According to Smith, Shipt shoppers can shop a couple of hours a week or they can shop every day if they wanted to. They can set their own schedule. Then, we can offer orders to them and they can choose which ones they want to shop for. If there is a certain part of town they like to stay in, they can stay in that area. It’s very flexible work.
Shipt has already become a second job for a lot of people and even a way for stay-at-home moms to earn on the side. The company doesn’t precisely track how many hours per week the average Shipt shopper works.
Shoppers can buy for up to two customers at a time. The app streamlines the shopping process by having lists organized in order of where items are located in the store. A shopping trip and delivery for a Shipt shopper usually takes less than an hour.
Shoppers seem to enjoy the work’s flexibility for the most part. However, there are also some cons according to Indeed.com. Those include stores being out of items on the list sometimes and a customer rating system that can beat shoppers for things out of their control.
There’s a higher need for shoppers on the weekends according to Smith. But, they are needed around the clock. Shipt is already available 24 hours a day and doesn’t charge a surcharge for busy hours or even off-hours.
You just pay the price shown in the app. There is just a $7 delivery charge for all orders under $35.
Shipt promises an unlimited delivery service for $14 a month or a yearly membership of $99. The company is going to encourage people to commit a year-long membership to the company by offering a $25 discount on their first order.
Shipt makes money from charging a little more for products than what they cost on store shelves in addition to customers paying a membership fee. The extra cost adds about $5 extra on an order of $35 or about a 14% markup according to their website.
Shipt operates in 35 communities and delivers groceries for a lot of major retailers such as Publix, Kroger, Fry’s, H-E-B, Central Market, Harris Teeter, and Western.
Smith came up with this idea for Shipt after a terrible experience shipping with his then young children.
He thought that this is a real problem so he then figured out how to solve it.
According to Smith, they have high customer service ratings. This is why they think companies chose Shipt and enjoyed working with them. They are very focused on customer satisfaction. That starts with people they select to shop with them and the way they treat their shoppers.
We are happy to help you always with your personal, business, and life insurance needs and we are more than happy to answer your questions regarding these issues.