Ride hailing companies like Uber and Lyft have dramatically changed the way we get around. Hailing a car from a ride share service is convenient, fast and easy.
The increased popularity of these services has created many hiccups for personal injury lawyers, and insurance companies alike.
To give you an idea of the popularity of drive sharing services, in March 2019 in Toronto, nearly 176,000 trips were taken. That’s a lot of trips!
The first major pitfall we saw as personal injury lawyers is what policy of insurance was appropriate for ride share drivers?
A standard car insurance policy wouldn’t cut it because these vehicles were being used for commercial purposes. There are different driving patterns and risks associated with insuring commercial vehicles versus insuring normal residential communing vehicles. Add to that the additional risk of drivers taking on strangers in their cars, driving to/from unfamiliar places with timing constraints to get to a certain destination on time; it all adds to additional risk for insurers.
The first drive share cases which personal injury lawyers saw dealt with accidents involving such vehicles, where insurance companies were denying coverage because the driver failed to disclose that they were driving the vehicle for commercial purposes.
This problem was quickly solved in around July 2016 when the Ontario government approved a regulatory change under the Insurance Act to allow insurance companies to develop commercial fleet insurance policies for ride-hailing companies.
Intact Insurance is behind insuring the Uber/Lyft fleet of vehicles whereby the Intact policy provides coverage that includes statutory accident benefits, uninsured motorist coverage and third-party liability of up to $1 million while the app is in use but no ride has been accepted and $2 million after a ride has been accepted. For collision and comprehensive coverage to apply, the vehicle owner must be covered in that way under their personal policy. The dangerous area takes place when the Uber is involved in a collision with a vehicle which does NOT have any car insurance. If no additional insurance is purchased, then the limits on the tort claim are limited to just $200,000.
Before this type of Uber fleet coverage existed, there was an insurance gap. Our personal injury lawyers routinely saw ride share drivers being denied coverage, or coverage issues involving ride share driver accidents. The major sticking point was that drivers didn’t know they had to notify their own car insurance company that they were operating their vehicle for commercial purposes (namely driving it for ride hail services). Or these drivers were operating their own vehicles without any form of car insurance assuming that they were covered under a blanket Uber policy which didn’t exist at the time. As such, coverage was often nullified or challenged to delay to administration of accident benefits.
At the same time passengers of ride hailing services were also at a loss. If the driver was being denied coverage, and they didn’t have any car insurance of their own; then the innocent and injured passengers were at a loss where they could make an accident benefit claim in order to get the help they needed.
This all ended (sorta) when Intact Insurance and FSCO announced there was now fleet protection for these ride hail services.
Another interesting development is coming out of Toronto where city council is recommending that all ride hail drivers complete a training course before they’re allowed to drive for profit. The recommendation still needs to be tabled, debated and passed by City Council. The recommendation for driver training did not specify how much time it should take but offered a list of preliminary subject matter, including safety, urban driving, accessibility, anti-racism and legal requirements.
The report offers some great data on the popularity of services like Uber and Lyft citing that;
- Ride Hail App use has grown 180% over the past 2.5 years
- Half of the trips in the downtown core are under 6km
- The majority of the trips are in Toronto and East York
- Had ride hailing not been available, half of the riders would have opted to take the TTC (that’s a lot of empty bus seats)
It’s a good idea to have ride hail drivers trained in one way, shape or form. Passengers are getting in to a vehicle with a complete stranger and they have no way of vetting that the person is who the proclaim to be on the ride share app; nor do they have any sense of whether or not the person is qualified to driver them safely from point “A” to point “B”.
The same can be said when it comes to taxis. But at least with taxis the passenger knows that the taxi company will be held accountable for their actions, or lack thereof. There is also a screening process to get a taxi permit through the city of through the taxi company itself. With Uber or Lyft, all a driver needs to do is have a car and log in to the app; and now they’re driving! That’s basically it.
Our lawyers support any initiative which increases not only safety, but also driver accountability. The recommendation in this recent report commissioned by the City of Toronto is a step forward in the right direction. With any luck, the recommendations in the report, or some form of those recommendations will come in to law to make our streets safer for drivers, passengers, pedestrians and cyclists.
At the end of the day, having car insurance with increased limits and increased accident benefits (med rehab, IRB, CAT) will help better protect the Uber driver and Uber passengers. But only you as a policy holder can secure these benefit by purchasing them from your own insurance company. These additional benefits won’t exist if you don’t opt in and pay for the plan. Being left with the bare minimum in benefits under an Uber fleet policy may not suffice in the event of serious or catastrophic collision. It gets even more confusing where there are multiple injured plaintiffs, or uninsured vehicles in the accident. It’s never too late to make a call to your insurance company to find out what coverage you have in place and how much it will cost to increase that coverage. You may be surprise at how little it costs.