Driving or Riding with Uber? What You Need to Know

So you want to be an UberX driver. You have heard there’s money to be made driving folks around the York Region, and you want in.

But did you know that your personal vehicle is not insured to carry commercial passengers, and that by doing so, you might be functioning outside of the law? Sure, it’s easy to register as an UberX driver. All you have to do is sign up and show your passport. But what about protection—both for you and your passenger? What happens if you get in an accident?

Here’s the deal: Uber falls into a category of services that are part of the sharing economy. You’ve got something that someone wants, so you offer it up to them. Similar to AirBnb, where homeowners can rent out their extra rooms or homes, regular folk can act as defacto taxi cabs in their free time, toting paying passengers around. For passengers, the plus is the cost savings.

Compare this recent ride which was taken during a low traffic time period, from downtown Toronto to Richmond Hill:

Taxi $70-$80

Uber $30

Attractive for the riders, for sure. And a good supplemental income for the driver. Unless they end up in a fender bender. Then, driving for Uber isn’t as attractive as it seems, neither for both driver nor passenger.

For Drivers

• Personal auto insurance does not cover drivers who are carrying paying passengers. This includes any time ‘on the clock’, even if the driver is just hanging around waiting for a fare. If the vehicle is in an accident, it would not be covered, nor would the passenger, driver, or the other parties involved.
• Insurance can be invalidated if the vehicle is used for undisclosed purposes. Not only would driver and passenger not be covered, but it might be difficult for the driver to obtain auto insurance in the future.
• Many municipalities require taxis to have a specific license. If you are carrying paying passengers without a taxi license, you could receive a ticket and be subject to a fine.

For Passengers

• Riding in a vehicle that may not be insured can put a passenger at risk. If injured in an accident, the passenger might have to take the driver to court to reclaim damages, legal or medical costs.
• If the policy is voided or a claim denied due to the material misrepresentation (ie a personal vehicle being used for commercial purposes), then both driver and passenger could be liable.
• Riders might be at risk when taking UberX. While taxi drivers must maintain a clean driving criminal record and CPR certification in order to maintain their license, screening for UberX drivers is fairly lax. Across the United States there have been reports of drivers with criminal records and crimes perpetrated in vehicles.

Recently, Aviva Canada became the first insurer to receive permission from the Financial Services Commission of Ontario to begin offering insurance to drivers carrying paying passengers in their own cars. While this is a step forward, the province’s legislature hasn’t even yet decided if this kind of insurance is legal. However, the coverage is available and can be purchased as an addition to a personal auto policy. The policy will cover the driver for the time they’re on the road waiting for ride requests as well as while picking up and dropping off.

The coverage eligibility requirements are quite specific:

• Drivers will have to have been licensed for at least six years
• They must offer ride sharing for at least 20 hours a week
• They may not carry more than 8 passengers at a time

As time goes on, more applications for similar insurance by other underwriters are sure to be approved. And municipalities will have to continue to consider how to regulate this burgeoning industry.

If you’re thinking about becoming an UberX driver, check into possible insurance options and whether your municipality requires you obtain a taxi license. If you’re a rider, take a taxi, or ask your Uber driver to show you proof of licensing and insurance.

It’s a brave new world we live in. We need to stay safe and educated while we’re getting where we need to go.

If you’ve been involved in an accident while driving or riding in an Uber, contact us to learn more about your rights.