The finger-pointing likely to result from an incident would make this driver as good as uninsured.
I guess uber has an insurance policy that covers their drivers during rides now, so hopefully that kicked in to take care of your friend.
Everyone should read their insurance policies to know their exclusions.
In the US. It's not clear if they have this anywhere else.
I think that was one of the greatest lies of Uber at the start "just drive your car for money in your free time!" - that's all great, but no private car insurance would cover you while doing that.
Total your vehicle? Personal insurance won't touch it, and the Uber coverage you thought you had is useless.
The only way for commercial drivers to be covered by the same policy is to price the risk of an unknown number of commercial drivers into everyones policy.
All you have to do is be upfront about it, and willing to pay.
Yes, it does cost more to cover employees as opposed to owner/operators of a business venture, but it it is not impossible (if it were taxis would not be able to exist).
What is probably true is the default insurance given out by Uber will not cover people not listed on the policy, and only the person contracted with Uber is listed on the Uber-backed policy.