We talked to Dustin Walsey of Buckle about the one policy coverage for rideshare drivers.
First of all, how are you and your family doing in these COVID-19 times?
Dustin Walsey: I am the type of person who looks at the world “half full,” so the positive part of the COVID is the time I have been able to spend with my wife and kids. I have two boys, 15 and 13, and they still think I am fun to hang out with, which will not always be the case, so I have taken advantage of that. This quality time is priceless. Thank God we have been healthy and happy and getting along. On the flip side, I really miss spending quality time with my parents, as we are super careful about being around them.
Tell us about you, your career, how you founded Buckle.
Dustin Walsey: I worked for years in sales at a big tech company. I had some great roles in business development serving Fortune 100 companies such as Coca-Cola and Cox with consulting, technology, and strategy services. But, I grew up in a family of entrepreneurs, which runs through my blood. I always wanted to do something on my own, build something. An opportunity came along to buy an insurance business, so I jumped all over it. Through that venture, I became aware of gig/rideshare drivers’ needs and the missing gap in affordable benefits available to them, specifically insurance. From there, with my partner Marty Young, we launched Buckle. The company has always had the goal of helping those who drive for living access affordable services they need, be more financially secure, and help people achieve economic freedom.
Today, we have a team of insurance, credit, and analytics experts who have pooled decades of experience and insurance/risk knowledge to create the Buckle financial services platform. We provide insurance, credit, and advocacy to gig workers.
How does Buckle innovate?
Dustin Walsey: The rise of the gig economy has created a problem for insurance companies, as well as the entire financial service industry. Over 2 million rideshare drivers have emerged over the last five years, and with COVID-19, delivery services have grown over 400% in the past 6 months. Insurance and financial services simply were not built for the specific needs of these rideshare drivers and other gig economy workers. That’s why we founded Buckle.
Gig workers do not meet the underwriting models used by most insurance companies, as they are geared toward salaried workers, or employees, with good credit who have predictable incomes and behaviors. The difficulty in underwriting an insurance policy for rideshare drivers based on traditional credit scoring leaves them paying high premiums, if available.
A credit score is a huge problem. For many Americans, their credit score defines a lifetime of socioeconomic status. Success or failure is directly linked to affordable access to credit or lack thereof. A flawed or nonexistent credit history increases the cost of loans, insurance, utilities, and other living expenses. As such, these subprime households have less income, and when there is a lack of savings, small unexpected expenses can force households into delinquency or default.
Buckle has shown that the credit score is an incomplete variable that is irrelevant in the gig economy. We’ve built insurance products differently, specifically for this exploding sector of the U.S. economy. Buckle takes credit score out of the equation and uses non-traditional data sources and analytics models to create better pricing risk.
Buckle’s rideshare insurance isn’t a gap product that supplements an existing policy. It replaces a driver’s current auto insurance policy, providing continuous 24×7 coverage, on-and-off the clock, with one low rate, and the freedom to allow them to drive when and how they want. It also gives the driver peace of mind, knowing that their car is adequately covered with affordable deductibles.
How has the coronavirus pandemic affected your business, and how are you coping?
Dustin Walsey: In the early days of the pandemic, our business was dramatically affected as people stopped moving around. We had to make tough decisions to structure the company in a way that would create sustainability. Thankfully, people started moving and traveling again, and we have seen great demand for our services, and we are happy to be, on what we believe, is the other side of COVID.
Buckle’s top priority is ensuring its members are fully covered in whatever capacity they are driving.
Did you have to make difficult choices, and what are the lessons learned?
Dustin Walsey: Like many companies, in the spring, we had to do a reduction in the workforce. It is never easy to let colleagues go who become close friends. It was imperative that Buckle be around for the recovery, which we started to see at the end of the summer. With this recovery, we were able to rehire some teammates, which is a testament to the loyalty that we have built within our company.
How do you deal with stress and anxiety? How do you project yourself and Buckle in the future?
Dustin Walsey: Personally, I deal with stress through exercise. I am an avid Peloton rider, where I get to blow off steam as well as unplug from the world for an hour. I also am very vocal, so I am very open to my family and my team. I lean on them for support and guidance. I believe in being honest with your team as they are your best allies and supporters.
I project myself and the company doing amazing things in the near future. I believe in advocacy for our members, and if we can help them achieve economic freedom, they will help Buckle succeed.
Who are your competitors? And how do you plan to stay in the game?
Dustin Walsey: Buckle has first-mover advantage. Our elimination of the credit score from underwriting proves to be an insurmountable obstacle for typical prime and sub-prime insurers and credit institutions, as they depend on credit scores for pricing and risk management. By partnering directly with the transportation network companies (TNCs) themselves, in a B2B2C capacity, Buckle accesses data unavailable elsewhere, providing a major competitive advantage in customer insight and tendencies in both insurance and credit. This allows our members to get the lowest rates possible.
Buckle predicts that traditional insurers will have to remodel their risk evaluation if they choose to serve the gig economy. Currently, the market includes ridesharing endorsements to many insurers’ existing product lines, but these still heavily depend on an underwriting and risk management system, all based on credit score. Due to the regulatory environment within insurance and finance, these existing incumbents likely cannot pivot with speed to a data-driven model that removes credit as a rating factor entirely.
Buckle is augmenting its first-mover advantage, particularly now with COVID-19 down cycle momentum to help gig workers lead the economic recovery.
Your final thoughts?
Dustin Walsey: I am going to use a quote I love from a fitness instructor. “If you can’t get out of it, get into it.” I am so all into the gig economy and supporting the people who make it happen. Our members are on the front lines, and as we help them become more successful, we make the world a better place.