By: Betsy Powell City Hall Bureau, Published on Wed Feb 04 2015
While Uber Canada assures the public it aims to offer the safest ride on Toronto’s roads, the country’s insurance lobby fears the company might not provide adequate insurance protection.
“It’s like Santa Claus — you hope it exists but you’re kind of skeptical,” said Pete Karageorgos, director of consumer and industry relations for the Insurance Bureau of Canada.
The insurance bureau’s concern revolves around personal and commercial insurance.
Licensed Toronto taxis need commercial insurance, a more comprehensive and costly form of coverage than the personal insurance carried by most drivers. The bureau says it’s unclear whether UberX drivers — those who use their own cars to pick up fare-paying customers for rides arranged through the company’s smart phone app — are required to have commercial insurance.
What Uber Canada will say is this: If an accident occurs during an UberX trip, Canadians can “rest assured” passengers, pedestrians and other motorists are “well covered” by commercial auto insurance in addition to any insurance coverage maintained by the driver, Uber Canada spokesman Xavier Van Chau wrote in email.
“We are confident our insurance model will provide coverage as it does in every jurisdiction where we operate.”
Van Chau’s email said Uber’s insurance policy is “proprietary” and therefore not public. He did not respond to the Star’s request to clarify if it is Uber’s policy that drivers have commercial insurance.
But he said every UberX ride is backed by $5 million of contingent auto liability insurance covering bodily injury and property damage.
The coverage is “far greater” than standard requirements for taxi and limo insurance in Canada and is underwritten by insurance company A.M. Best, he wrote.
Karageorgos said Uber’s response to questions about its insurance policies is filled with “holes.”
If indeed an UberX driver gets into an accident and does have a commercial insurance policy, “then there’s no problem, it’s like being in a regular cab. But if they’re operating their vehicle as a cab and it’s not insured the way it should be, then there’s likely going to be some challenges.”
Uber declined to say how many Torontonians are working for them. The company’s website invites drivers interested in earning extra cash to apply for an UberX position if they have a mid-size or full-size four-door vehicle, in excellent condition. Applicants must be “at least 21 years old and possess a personal license and personal auto insurance.” The website also stipulates Uber “does not provide transportation or logistics services or function as a transportation carrier.”
Toronto taxis are required to have commercial coverage and carry a minimum of $2 million in liability insurance. An owner or driver has 10 days to notify the city if there is any change to the policy.
The city cited inadequate insurance that “might not provide essential coverage to drivers, passengers and others in the event of accidents,” as one of the reasons it is seeking an injunction for Uber to stop its operations here. A court date is scheduled for May.
Karageorgos said the way things stand he would choose a licensed cab over an UberX vehicle.
“Because of how they’re regulated through the municipality, there are some checks and balances in place that make me feel more comfortable,” he says.
If an accident happens and the driver isn’t properly insured, “I can go after the taxi company or the municipality that oversees them so there are other steps I can pursue.”
As Uber spreads into Canada, it has hit other bumps in the road.
Two UberX drivers in Montreal had their cars impounded by police in recent weeks.
“They do have their cars now,” said Jean-Nicolas Guillemette, general manager of Uber Montreal. “We will always help our partners, financially, psychologically.”
Guillemette said the seizures came at the request of the Montreal Taxi Bureau, the city agency that oversees the taxi industry. He declined to say what fees or fines the drivers faced, referring calls to Montreal city officials.
“We have had tens of thousands of rides since we started operating in October 2014, and we have only had two cars seized. I don’t see it as a threat for drivers,” Guillemette said.
Calls to the city of Montreal were referred to the Montreal Taxi Bureau, which did not return calls.
Tammy Robbinson, a spokeswoman for the city of Toronto, said the city does not have the power to impound cars for licensing bylaw infractions.
In December, two MPPs introduced separate private member’s bills to revamp the Highway Traffic Act and stiffen penalties for those operating illegal taxis.
Liberal MPP John Fraser said he introduced the legislation due to an issue with illegal taxis in his hometown of Ottawa. His bill calls for tougher penalties including fines of up to $30,000, demerit points and vehicle impoundment after a second offence.
“This bill is not about Uber,” Fraser said, noting it happened to coincide with Uber’s arrival in Ottawa. “The message of the bill is that public safety is paramount.”
He added that new technology is a new reality. “If you are driving people for hire then there are certain rules that have to be followed,” Fraser added.