December 3, 2015 by Canadian Underwriter
Niagara West-Glanbrook MPP Tim Hudak has called on Ontario Finance Minister Charles Sousa to develop “affordable, comprehensive insurance” specific to ridesharing services like Uber.
Hudak’s private member’s bill, Opportunity in the Sharing Economy Act, which creates provincial legislation around ridesharing, homesharing and parking sharing, is currently before the Finance Committee awaiting hearings. “The political uncertainty surrounding ridesharing is helpful to no one,” Hudak said in a press release on Thursday.
The Toronto Taxi Alliance (TTA) has “reacted with skepticism” at Hudak’s call for the provincial government to develop a new insurance product for “bandit” taxi cabs, including UberX vehicles.
TTA spokesperson Sam Moini said that “there is already an insurance product UberX drivers can purchase: the OPCF 6A,” referring to the “Permission to Carry Paying Passengers” certificate of auto insurance. “They do not purchase it. To do so would alert their insurance company that they are carrying fares for money, and they risk having their policies cancelled as we saw happen with Aviva in October.”
In early November, the Canadian Taxi Association (CTA) noted that Aviva Canada “cracked down on four Ottawa-based customers who are Uber drivers after having received information from the CTA,” the association said at the time.
Ryan Stein, director of policy at the Insurance Bureau of Canada, noted, however, that the standard auto insurance policy was not designed to cover vehicles used to carry paying passengers. “The insurance industry has put forward a proposal that provides a framework for insurers operating in Ontario to develop new products to meet the needs of consumers who want to use their vehicle as part of a transportation network company,” he said.
Currently, all taxi and limo drivers who carry passengers for compensation in Ontario must carry the OPCF 6A insurance endorsement, the TTA statement noted. They must present this document in order to receive their license from the City of Toronto; no professional is allowed to drive without it.
“These drivers do not purchase the product which is available to them now,” Moini said. “What makes anyone think they will buy a new product in the future?”
Philomena Comerford, president and CEO of Baird MacGregor Insurance, added in the release that “Uber recently announced it has 20,000 drivers in Toronto. By their own admission, they have 20,000 uninsured cars driving around our city. This is not only highly irresponsible, but illegal.”
Hudak’s private member’s bill “empowers Ontarians to benefit from opportunities in the sharing economy,” Hudak said in a press release in late October. “It will provide a province-wide framework for sharing economy businesses such as Uber, AirBnB and Rover to operate under clear rules.”
The bill will also give people an opportunity to earn more income from assets they already own and make life more affordable in Ontario, he said. “Too many Ontario families are living paycheque to paycheque and would be hard-pressed to afford an unexpected expense. The opportunity to earn additional income from their car, home or driveway would be a minor miracle for those families,” said Hudak, explaining the province should give Ontarians the right to earn that income.
Late last month, Canada’s Competition Bureau, an independent law enforcement agency, recommended a regulatory overhaul of the taxi industry to allow taxis and ridesharing services to compete “on an even playing field.” The bureau released a whitepaper that addressed factors such as price, availability and wait times, convenience and quality of service. “Consumers stand to benefit from lower prices, reduced waiting times and higher quality services if regulators allow the forces of innovation and competition to shape the industry,” the whitepaper said.
Hudak noted that some major insurers in the United States have already developed new products to cover companies and drivers that offer ridesharing services “and it is time for Ontario to do the same. The Minister needs to direct the Financial Services Commission of Ontario to act now. There are over a million rides per month and growing in Ontario. If the Americans can do it, why can’t we? Let’s ensure adequate coverage for everyone from the moment they sign onto a ridesharing app until the passenger is dropped off.”