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Ride-Sharing Companies: Think Before You Drive

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Uber Operates in a Legal ‘No Man’s Land’

Face it, the consumer in you probably thinks services like Uber and other ride-sharing programs are nothing short of glorious thanks to their ability to help relieve the transportation woes plaguing many of our most densely populated urban centres. Convenience alone has already endeared these services to millions of riders, much to the chagrin of registered and law-abiding taxicab companies.

But as convenient as they are for riders (not to mention injecting much-needed consumer-friendly competition to the industry), services like Uber are enticing many enterprising Canadians into turning their family vehicle into an income producing asset without knowing what some of the legal ramifications might be. Many critics warn that drivers need to understand that Uber has been operating in a legal grey area since day one – a fact that could leave UberX drivers high and dry in the event of an accident.

What is at Issue?

While we would never suggest that the prospect of becoming an UberX driver seems too good to be true, there are some caveats that those interested in becoming one should be aware of.

Arguably the most important thing to consider is whether or not your auto insurance policy covers you in the case of an accident. To date, there have been numerous reports of UberX drivers getting into an accident while transporting customers under the banner of the $1-billion company – drivers who later find out their auto insurance won’t cover damages or personal injury due to the fact that their policy didn’t cover their vehicle being used for commercial purposes.

Ironically, Uber’s policy only requires that their drivers have personal auto insurance; many drivers go so far as to claim that Uber never suggested their current coverage may not be adequate. Obviously, drivers should be doing their homework regardless – but there are still those that claim that Uber should take steps to inform potential drivers that depending on their coverage, they may need to make adjustments to their policy.

Uber has said that communities, passengers, and other drivers should rest easy knowing that the company has a robust $5 million insurance policy that covers all of their drivers – but it’s still not clear whether or not that coverage extends to the Uber driver themselves, which could mean that in the event of an injury while on duty, a driver’s only recourse may be to hire a personal injury lawyer in order to receive compensation.

Thankfully here in Canada, we still have universal healthcare so at least drivers that find themselves needing prolonged medical treatment won’t be out-of-pocket for those expenses. Sadly though, because the service gained so much popularity so quickly, legislators and insurance companies are still trying to figure out how to approach it, meaning there’s no guarantee that drivers will be compensated for the damage sustained to their vehicles or loss of income.

Before becoming an UberX driver, it might be advisable to wait and see what kinds of insurance coverage becomes available in the near future to handle this burgeoning sector of the transportation industry. Many insurance companies (though not yet in Canada) are currently looking into developing policies specifically designed for ride-sharing drivers.

Mandatory Commercial Auto Insurance

Some jurisdictions, like Waterloo, Ontario, are proposing bylaw changes that would require anyone looking to become an Uber driver in the city must provide proof to officials that they have a commercial auto insurance covering up to $2 million in damages. Such a high requirement may prove to be a significant barrier to entry for someone who merely saw Uber as a way to supplement their income while providing a much-needed service.

Have you ever used a ride-sharing service? Have you ever considered the issue of insurance coverage for ride-sharing service drivers? What are your thoughts on this?



  1. January 25, 2016

    Linda A Cassidy

    I am really not a supporter, although I will confess once in New Jersey we had to use the service because there were truly no cabs, we waited 90 minutes trying to get through the phone to a real cab company. In Ottawa I cannot understand how on one hand we consider this ” ride sharing” while at the same time charging cabs a fee being able to use the airport.. makes no sense. Plus cabs must be licensed and in any other industry if i tried to operate without a license I would be fined or closed down.. but for this the city accepts its a ” ride sharing” Ride shairing is, I am heading to Blue Mountains for a blog conference and offer you the opportunity to share the costs of the drive and come with me. Uber is an unlicensed cab company and thanks for sharing the down side. ( Sorry this infuriates me, ride sharing , I don’t think so)

    • January 25, 2016


      I love hearing your opinion on this, Linda. I tend to think like you. I consider ride-sharing something like me offering you a ride to another town because we are both headed that way. That’s crazy about your time in NJ! 90 minutes! Yikes! It will be very interesting to see how this all pans out over the next couple of years. Thanks so much for stopping by!

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