Earlier quoted context omitted.
What if he wasn't currently en-route to pick up a passenger but had the app open, available to be assigned a new ride? My guess is that he had recently dropped off a passenger and was trying to get back to a location that he thought would make it more likely for him to be selected for another ride. Do you think Uber should be liable then?
Why isn't Uber liable? Let's say I am a developer working at FooCorp and my employer provides an insurance for any accidents caused during work. Now while I was having my lunch, there was a fire in kitchen that killed 2 employees. Now would it be fair for my employer to say that since the 2 employees weren't writing code when the accident happened, they are not liable for the accident?
Per your analogy, I'm guessing that for the sake of argument in your mind, Uber driver was working for Uber.
Your analogy goes:
1. A has employee B.
2. A has insurance for accidents affecting B during work.
3. A was physically associated with an accident that affected B.
4. B was not working at time of accident.
5. If, 1, 2, 3, and 4, then A is not liable for accident.
6. Therefore, A is not liable for accident.
I think the point of contention in the Uber case is whether #4 is true. If #4 is false, your conclusion doesn't work. Ways that #4 can be false have already been discussed thoroughly in these comments.
Again, I haven't decided for myself whether or not Uber should be liable. But this argument doesn't convince me that Uber shouldn't be liable.