THE TRUTH ABOUT UNREGULATED CARS FOR HIRE
Being paid for transporting passengers is a commercial activity and therefore requires commercial auto insurance which allows drivers to carry passengers. This is a highly-specialized form of insurance offered by very few insurance companies. The drivers of unregulated cars for hire are driving without necessary insurance – their existing non-commercial auto liability insurance will not protect you.
Unregulated car-for-hire companies are covered only by contingent auto liability insurance. This comes into effect only if the driver has the proper commercial auto insurance. Unregulated drivers don’t have this class of insurance. Therefore drivers for unregulated car for hire companies are, in effect, entirely uninsured to carry passengers for hire.
In the event of an accident, where a passenger riding in an unregulated car for hire is injured or suffers a loss of property, the passenger will pursue the driver for compensation. The driver will not have commercial auto liability insurance coverage. In these cases, the passenger will have no financial recourse against the driver’s automobile liability insurance company.
Media reports have quoted spokespeople from unregulated car for hire companies making misleading statements about insurance coverage. Here’s one example from the CBC News:
Every ride on our platform in Canada is backed by $5 million of contingent auto liability insurance, so drivers and the community at large can rest assured knowing that ride-sharing partners are covered by our insurance policy in addition to any insurance coverage maintained by the driver.
Contrary to this statement, drivers and the community cannot rest assured. This insurance is contingent on the driver having commercial auto liability insurance, which is not available to unregulated drivers.
In the event of an accident where a pedestrian, cyclist or another motorist is struck by an unregulated car for hire, they would pursue the driver for compensation. Since the driver does not have the proper commercial auto insurance, the victim will have no financial recourse against the driver’s automobile liability insurance company.
Victims would pursue the unregulated car-for-hire company for compensation. However, the company is not liable to the passenger because the driver has violated the company agreement by failing to have commercial auto liability insurance in place.
Unregulated car-for-hire drivers are untrained. Unlike regulated taxicab operators, unregulated car for hire operators have received no training in the operation of a taxicab, conflict management, sexual harassment or safe driving techniques.
Unregulated cars for hire could be unsafe. Unlike regulated taxicabs, unregulated cars for hire are not licensed or inspected on a regular basis. Unregulated car for hire cars do not meet any of the safety requirements established by Canadian municipalities. Unregulated cars for hire do not have cameras, age limits or any identifiable numbering.
Taxicabs are regulated by the cities in which they operate. Regulated taxicabs require a taxi permit from the city. Taxicab drivers must have a Taxi Driver’s Licence and they must have the proper commercial driver’s insurance. Taxicab cars are regularly inspected to ensure that they are safe.
In most large Canadian cities, there is an accident a day involving regulated taxicabs. Should your city refuse to regulate car for hire services, persons injured or suffering a loss as a result of an accident with an unregulated car for hire could pursue the city for compensation. City governments may be held liable for allowing unregulated car-for-hire services to operate.