Billed as an evolution to modern transportation, Uber has inspired global debate about whether the company’s ridesharing application cuts corners on regulatory rules, and what effect this has on the taxi industry and public at large. A proposed policy by Aviva Canada seeks to respond to the company’s uncertain insurance coverage for ridesharing drivers and their passengers.
A major problem with using Uber is the risk of riding in a vehicle where the status of insurance is unknown. Most Uber drivers use their own private vehicle to transport riders for profit; without a commercial auto insurance policy, drivers (and their passengers) typically cannot rely on a personal insurance policy to provide coverage in the event of a collision. It looks like this problem will soon be solved in Ontario. If the proposed policy is approved by provincial regulators, Aviva Canada will offer ridesharing insurance to drivers who use their own vehicles to carry passengers using Uber starting in February 2016.
This development solves a major headache for Uber, and almost certainly means that it and other ridesharing services are here to stay, but the question remains: is Uber as safe as traditional taxis? Currently, Toronto Uber drivers have no regulation or oversight. A taxi driver must be registered with the City and is subject to municipal regulations and rules. Uber operates outside this regulatory regime. How safe are the Uber drivers? Many – if not most – are part-time, not professional drivers.
Aviva’s proposed ridesharing insurance will have limitations. The basic ridesharing coverage will only insure drivers for up to 20 hours of ridesharing per week. This includes the time the driver is using the app to coordinate with passengers. Apparently, Uber drivers will be able to purchase more coverage but the details and costs are unknown. The proposed insurance will also limit the number of passengers that can be carried and will require the driver to have at least 6 years of driving experience.
The cost of the insurance will be a critical factor. If the insurance turns out to be too expensive, and regulation fails, nothing changes.
This could be a major risk for passengers and other road users. If an Uber driver is relying on his or her personal auto insurance policy, that policy will likely not cover commercial use of the vehicle. If an Uber driver causes serious injuries in a car crash, the money available to appropriately compensate the innocent victims or pay for rehabilitation may not be available.
