The Associated Canadian Car Rental Operators (ACCRO), the organization that speaks on behalf of the daily vehicle rental industry in Canada, has emerged as a new critic of ride-sharing services such as Uber.
ACCRO has entered the public debate due to its fear that rental vehicles may start being used to transport passengers for hire, an activity that is not covered under customers’ personal auto policies or existing rental fleet policies. It is important to note that carrying passengers or property for hire has long been a prohibited use on rental agreements in use throughout the industry.
As a result, any auto incident sustained while ride-sharing exposes the car renting agency to a host of heretofore avoidable liabilities.
“According to Ontario insurance experts, Uber’s structure as currently disclosed doesn’t provide insurance in a way required by law, so all the existing laws that govern which policy responds and who’s going to cover claims gets thrown into disarray,” said Craig Hirota, member services manager, ACCRO.
Since those issues haven’t yet been resolved, ACCRO worries what effect an automobile accident could have on rental car operations. He references December 2004's $13 million settlement for a lawsuit arising out of a 1997 motor vehicle accident as precedent, with a judge having found an Ontario leasing agency and its insurer liable for damages that exceeded the policy limits held by the lessor.
“Our concern is that we would like to see that answered and regulated so our industry doesn’t have to bear the cost of these claims and deal with deciding who has to pay claims or who is responsible for what is covered in those claims,” Hirota said.
While Uber drivers are required to register their vehicle with the mobile app’s headquarters and partake in a personal background check, Hirota has heard stories of Uber employees going on vacation and outsourcing their driving duties to friends and family members. In addition, a major car rental company recently encountered a situation where a lessee was caught using a rented vehicle to carry passengers for compensation.
“I did hear from one of the major car rental companies that a claim arose from a renter using a vehicle as a taxi, but luckily it only caused property damage so it never escalated to the point of a liability claim with personal injuries,” said Hirota.
ACCRO hopes to educate brokers on these dangers before a situation arises that could wreak havoc on the entire rental car industry.
“Our hope is that this Uber issue doesn’t reach a point where catastrophic claims serve as the catalyst for action" Hirota said. “That could potentially put a burden on the industry and put operators out of business.”
