A taxi company in Waterloo, ON is stuck between a rock and a hard place – or more accurately, stuck between having to deal with the difficulties of running a business amid the pandemic, and having to pay steep insurance fees.
Peter Neufeld, the president of Waterloo Taxi, said that the past 10 months has been a “roller coaster” ride for his company’s drivers.
“Last year, we didn’t just get hit by the pandemic, but the insurance industry decided to walk away on us and we were all left scrambling to get facility coverage,” Neufeld said in an interview with CBC News. Coverage, he says, that is “not ideal” since it is typically reserved as a last resort.
Facility insurance is an insurance of last resort, reserved only for drivers of the highest risk whom no insurer would underwrite a policy for. Provided by the Facility Association, the insurance is available to all Ontario drivers regardless of their driving history. Notably, facility insurance costs more than regular auto insurance – as much as twice or thrice the amount of premiums – due to the high exposure of the policyholders.
Neufeld also noted that Waterloo Taxi’s available cabs dropped from 86 to 24 during the lockdown months.
“For a couple of months, we were a skeleton crew,” the taxi company president said, adding that the company managed to get by, since paying facility insurance for 24 cabs was not too costly. It also helped that there were not a lot of claims during the first few months of the pandemic.
Waterloo Taxi’s drivers have slowly returned to work over the months, up until the most recent lockdown, Neufeld said. But call volume dropped when the lockdown restrictions got tighter, putting the company back into the same difficult position it found itself last March during the onset of the coronavirus pandemic – except now it has about 80 cars active and has to pay facility insurance for each of them.
Thanks to limited business and increased insurance costs, Neufeld said that his company’s drivers have been feeling anxious and frustrated.
“A lot of them were very worried about where the money is going to come from to pay their bills,” he said, adding that taxi operators are “forgotten” when it comes to small business grants or loans. This is because taxis are considered essential businesses during the pandemic, Neufeld explained, and thus are not eligible for the grants.
CBC News emailed the Ministry of Economic Development, Job Creation and Trade for comment on the matter. In its response, the ministry acknowledged the “unprecedented challenges” for businesses across Ontario. It has also encouraged businesses to learn more about the options available to them by visiting Ontario’s official website for small business support resources.
The ministry also said that it would continue to speak with business owners and associations to learn more about the pandemic impacts they are experiencing, and how the government can support them.
