If you aren’t living in a major city perhaps you aren’t aware of Uber, or maybe you’ve heard the name but never really understood what they did. Uber is an app-based ride sharing service, which means they operate through a smart phone application or web browser. This application allows riders and drivers to connect (like a taxi service), and then the applications GPS directs the driver to the paying costumer to start their route. Seems like a harmless and brilliant idea, but who are these drivers?

Who is driving the Uber?

There are three branches of service that Uber can provide:

UberTAXI – operates much like a traditional taxi service, carried out by qualified, licensed drivers, with a certified cab approved by the province/state. This branch of Uber has gone through all the proper legal channels and carries a commercial taxi insurance policy.

UberBLACK – requires the driver to be a professional operator (think suit and tie), with a commercial license and commercial taxi insurance policy. UberBLACK drivers must also strictly operate a black colored sedan, which fits the name. This branch also has gone through the proper legal channels.

UberX – this branch is where the issues and controversy start to arise with Uber. The only requirements for this service is the driver has to be over the age of 21, carry a personal auto insurance policy, drive a reliable vehicle, and have passed a police check. After those requirements have been met, any average Joe can operate their own taxi service from their vehicle.

The issue with insurance – the driver

Uber currently carries a $5 million insurance policy for all their drivers in Ontario. With this insurance policy there is a section of coverage intended for non-owned automobiles (any Uber driver). The only issue with this coverage is that it is only applicable when Uber has been deemed negligent. So their policy might not help you when you need it the most.

What about your own personal insurance policy? When you filled out your Ontario Auto Application (OAP1) there is a question asked “Will any of the described automobiles be rented or leased to others, or used to carry passengers for compensation or hire, or haul a trailer, or carry explosives or radioactive material?” If your answer to this question is no, and you signed up as a driver for Uber, then you are violating the conditions of the insurance contract and your policy to be voided. Knowingly providing wrong information on your insurance application could also result in fines up to $250,000 for the first offence, and $500,000 for the second offence – this is considered insurance fraud.

The issue with insurance – the rider

As the rider using the UberX services there are also some concerns you should be aware of. First and foremost should always be your safety and protection in the event of an accident. If the driver’s policy gets voided from their insurance company (after they realize they are driving for UberX), you won’t be able to sue the driver’s insurance policy in the event that you become injured. However, you can obtain their accident benefits to pay for things such as medical rehabilitation and attendant care. These benefits in Ontario can’t be taken away from you in the event of a policy breach, but they are very limited and may not be enough.

If you plan in participating in the Uber service, either as a driver or a rider, please consider the insurance implications, and the gaps in coverage. Having your vehicle damaged, your body injured, and a lawsuit pending is a terrible thing, and it would be even more terrible if there was no insurance in place. Please contact your HMS broker so we can review your coverage options.

References:
Top Canadian Broker
CTV News – taxi or tech company?
Insurance For Ridesharing (American)
CBC News – warning issued by Canada’s insurance industry