Uber Insurance Problems: Ride at Your Own Risk
Uber is a ridesharing app that connects people with drivers in minutes. The company has been in the middle of countless legal showdowns across the world as it aims to disrupt the entrenched taxi industry. There remains a debate around the need for regulation and safety vs. reducing consumer prices. One of the main concerns is that UberX drivers are unlikely to carry the necessary commercial insurance to protect itself and its passengers.
Executive director of Municipal Licensing and Standards, Tracey Cook, has significant concerns that UberX contravenes city bylaws. In an email, Cook claimed that “The city is concerned that the UberX service may pose a serious safety risk to the public, including those who are signing on as drivers.”
Unlike regulated cab companies, drivers participating in ride-sharing programs (including Uber and Lyft) are not regulated to hold city-issued drivers licenses, take city-mandated training, put their cars through city-mandated inspections and incorporate certain safety equipment. With regulated taxi cabs there is some assurance that the vehicle and driver have passed the minimum safety regulations.
Despite some of the regulations ride-sharing tries to remove itself from, a major issue is that, in many cases, UberX drivers don’t have the necessary commercial insurance to cover passengers in the event of an accident. Co-president of Hailo North America said that “The research that we’ve done illustrates very clearly that drivers that are working in a ride-share situation do not have primary commercial insurance, which puts them at risk and the passengers at risk.” In Canada, personal auto insurance policies include the condition that the vehicle is use for personal use – with no commercial use permitted.
According to Uber Canada, “Every ride on the UberX platform in Canada is backed by US$5,000,000 of contingent auto liability insurance covering bodily injury and property damage. This US$5,000,000 of coverage is more than two times the standard requirement for taxi and limo insurance in Toronto”. However, the Insurance Bureau of Canada warns that personal car insurance won’t cover drivers if they’re in a collision or a passenger is injured, so drivers must carry commercial auto insurance covers.
It’s difficult to deny the importance of ride-share businesses such as Uber and Lyft. However, as ride-share grows in popularity, consumer safety will take top priority. While Uber provides a convenient alternative to taxis, remember that you may be riding at your own risk.