The battle over ride share legality has a new battleground – the 905. Mississauga city council has banned Uber and other ride-share companies by voting in a new motion that requires all transportation companies have a broker license, employ only licensed taxi and limousine drivers, and use only licensed vehicles.
The motion, which was proposed by Mississauga’s Public Vehicle Advisory Committee, effectively puts the breaks on Uber X drivers - who are not licensed public drivers and use their own cars - from operating legally in the city.
The new rules also require any professional drivers adhere to the same insurance and background checks as local taxi drivers, who pay an estimated $5,000 per year for their commercial policies. Currently, many of the roughly 5,000 UberX cars operating in the city do so without any commercial coverage.
However, even if things had gone in Uber’s favour in council, it likely wouldn’t have made a dent in the number of uninsured ride-share drivers on Mississauga streets says John Hubbard, president of Mississauga-based Hubbard Insurance Group.
“There are a couple of insurance companies that offer an endorsement to cover the drivers, but it’s limited to 20 hours a week and I think a lot of these drivers feel that they’d just as soon fly under the radar,” he says. “I think a lot of people are doing more than 20 hours because it’s turning out to be lucrative, especially without the overhead costs of the taxi industry.”
“I would think the business model of driving a ride-share vehicle – the attractiveness is severely diminished if they suddenly have to pay out huge dollars for insurance, which could be three, four times the amount they’re currently paying.”
He adds the many Uber drivers have “blinders on”, and may be under the impression that they’re covered by the ride-share company’s claim that every ride is insured.
“I think the ‘every ride is covered’ claim may be a reflection on the coverage for Uber as a corporate entity more than it is coverage for the individual,” he says. “There’s quite a bit of vagueness around what’s actually covered.”
There have been a number of incidents that prove Uber’s claims of coverage aren’t up to snuff, as insurance companies aren’t shy to void coverage for those operating as ride-share drivers. “We know a couple of insurance companies we work with have given us examples of claims that have been denied for ride sharing drivers, and in one case it was a $50,000 car that was almost written off - and the guy had no coverage,” Hubbard says.
Currently, the only provider of ride-share insurance in Canada is
Aviva, which offers a liability add-on for personal auto insurance policies for part-time ride share drivers. The insurer has said it is looking to expand its product, and into additional markets as Uber fights its way to legal status, one municipality at a time. “We took the view of we’re not taking any sides in Uber vs. ridesharing, vs government, we just think it makes sense for an insurer to offer a product, if and when they engage in it,” stated Jason Storah, executive vice president of
Aviva Canada in an interview with Insurance Business Canada. “We’ve taken the view that ride sharing is part of the sharing economy, it’s not going away despite what some people want.”
