(Photo credit: Alexander Torrenegra/Flickr)
Recently, there has been controversy about the app-based Uber Car Service operating in Toronto. Although Uber, describes itself as a ridesharing service, the City of Toronto argues that it operates as a taxi and should be regulated as a taxicab service. Accordingly, the City has commenced an Application to declare Uber as a taxi cab brokerage and to obtain an injunction restraining Uber from operating in Toronto.
Uber’s peer-to-peer ride-sharing service UberX allows passengers to request transportation services from third party transportation providers through Uber’s app. The issue becomes whether those drivers are adequately insured, in particular UberX which allows ordinary drivers to pick up passengers in their own vehicles.
Traditional taxi cab drivers are insured by commercial automobile insurance policies. If a taxi is involved in a motor vehicle accident where the taxi driver is at fault, there is third liability coverage available for the occupants and any other person involved in the collision.
On March 18, 2015, the decision in City of Toronto v. Uber Canada Inc. et al.[1] was released. The court dismissed Uber’s sealing motion to keep its insurance policy confidential which they claimed would provide them a competitive edge.
Diamond J. reasoned that Uber could not prove that disclosure of its insurance policy would lead to any loss of competitive advantage. Uber’s insurer took no positon on the motion and there was nothing stopping the insurer from providing the same policy to a competitor. Furthermore, Diamond J. found that the insurance policy was not a “trade secret” but a commercial document.
If Uber’s insurance policy provides coverage consistent with the taxi industry, one would think Uber would have an incentive to make this information public so that their customers were confident in the service.
According to the Uber website, in order to apply to be an UberX driver, an applicant must check off that they have a commercially insured vehicle. It is unclear whether a copy of this coverage would be provided to Uber.
The company markets their drivers as independent operators who can essentially pick up jobs on their own schedule. This would be a desirable option for many students or individuals looking for extra money. However, should an UberX driver not inform their auto insurer that they are using their personal vehicle for commercial use; their insurer would be within their right to deny coverage.
If the driver is denied coverage, and UberX passengers do not happen to be covered under another auto policy, coverage could be confined to $200,000 instead of the usual $2 million third party liability limits that a traditional taxi would have available. Unfortunately, the UberX driver could be held personally liable for the difference.
Up until this point it remains unknown whether these drivers have additional coverage from Uber in these circumstances.
By: Sonia Leith, Neinstein Personal Injury Lawyers
[1] 2015 ONSC 1617 (Canlii)
Greg Neinstein
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