Kittens on demand and other successful experimentsReprints
Gus Fuldner has been involved in getting insurance for certain one-off promotions for Uber Technologies Inc. in addition to the day-to-day insurance coverage it provides for its ride-sharing drivers.
It illustrates his approach to his job, which is to facilitate the company's growth without letting risk management get in the way.
Promotions have been as varied as providing on-demand ice cream since July 2012 in 144 cities across 38 countries on six continents, and coordinating the delivery of on-demand kittens — from shelters, for which the shelter charges applied — in more than 50 cities in one day last October.
“Often the mentality is, "If you're delivering kittens, what if someone gets bitten?' and things like that,” said Mr. Fuldner, Uber's head of insurance. “That can certainly happen, but if we operate our business focusing on those sorts of unlikely circumstances, we wouldn't be getting all the promotional value and (would be) stamping out the creativity of our marketing team.”
When he first heard about the kitten promotion, Mr. Fuldner said he thought, “That's interesting.” When it launched, the number of people who wanted on-demand kittens “was just stunning.”
Mr. Fuldner said he doesn't turn down a possible promotion for fear of the risks involved, or let the matter get bogged down in red tape.
“I couldn't have told you whether it would be on-demand kittens or something else that would be super popular, but if we as risk managers said, "No, you can't do that. It's too risky,' or, "We need to do all this administrative stuff ... for a one-day promotion,' then we would never learn that kittens are a super popular promotion.”
One of Uber's most popular promotions involves helicopters.
Using rented helicopters, Uber has designed an insurance program that covers one-time events ranging from transporting someone to the Cannes Film Festival in France or getting them from New York to the Hamptons for the Fourth of July.
Uber also has insurance in place for exotic cars.
Promoters of a product or service may “have a celebrity who will offer to do a ride-along,” he said. “We'll have to rent an exotic car and set up an insurance program to cover exotic car rentals to enable these promotions when they occur.”
“When a marketing manager comes up with a particular idea, we can enable that as quickly as possible,” Mr. Fuldner said.
He said a variety of insurers cover the promotions.
These promotions illustrate Uber's approach to risk management, Mr. Fuldner said.
“One of the things we spend a lot of time on is how we put insurance in place to cover these, and have the flexibility to cover all these promotions without creating too much friction for the business internally,” he said. That allows the marketing team to be creative, but “we still have to ensure we're being prudent.”
“Uber is a company that values experimentation, and I think there are some companies, some risk management philosophies, that are focused certainly on minimizing risk to zero,” Mr. Fuldner said. “Sometimes, that is at the expense of business opportunities, whether it's the kittens marketing promotion or the ability to enter a new market.”
Mr. Fuldner said he thinks “about risk management as a way to allow our software engineers and product people and marketing folks to make insurance sort of a problem that's not in their way ... to then enable that,” Mr. Fuldner said.