The "idle' phase is part of picking people up. It's not like Uber drivers get paged while their sleeping at home to come pick people up. There is a clear 'on the lock' vs 'off the clock' situation which Uber already tracks.
Wouldn't the driver be covered under their personal insurance during the idle phase anyway? They don't have anyone else in the car, so e.g. A passenger would just be a normal passenger if they had one, not a paying client.
I don't see why they'd need some special insurance policy to cover the idle phase. Do personal insurance coverages have some disclaimer about waiting around with the intent to use your vehicle commercially?
Idol time is still commercial use. Consider if Starbucks suddenly decided to pay barista's on a minute by minute basis based on if they were actively making coffee. Clearly, that’s not going to let Starbucks get around minimum wage laws.
From a risk standpoint which is what insurance cares about Idling Uber drivers are going to spend way more time on the road than average so their much higher risk.
They already do that; their insurance covers the driver since he accepted the trip until its completion: http://blog.uber.com/ridesharinginsurance
What they refused to pay was exactly during the "idle" phase - when the driver had the app turned on, waiting for a trip.