Toronto's Vote to Legalize Uber is a Lesson for other Municipalities says Shop Insurance Canada

Digitaljournal.com
May 10, 2016

Uber and other ride-sharing companies are now legally able to operate in Toronto, and are not facing the auto insurance stumbling blocks of other provinces. Industry expert, Shop Insurance Canada, says that the way in which the city adapted to Uber and the company accepted the regulations shows that adopting ride-sharing firms in other municipalities can be a smooth transition, at least at legislation level.

"The process to get to the actual vote was as convoluted as other provinces, while taxi companies are unlikely to be enthused by the regulations," Shop Insurance Canada said.

"However, the city showed that it could adapt regulations to adopt ride-sharing firms, with Mayor John Tory fundamental in securing a positive outcome. Uber, for its part, has accepted the regulations and showed that it is willing to work with municipalities if it agrees with regulations."

 It is arguable that Uber is holding cities across Canada to ransom and only agreeing with regulations that give it an "easy ride," an opinion that is often forwarded by taxi companies. Despite the accusation, in Toronto Uber has been able to agree with regulations, something it did not do in Calgary, where it pulled out of the market after an amended bylaw was announced.

Toronto city staff had drafted a mock legislation that was rejected by the council last month, leading to Mayor John Tory changing the content in a bid to secure a council vote. This tactic worked, but taxi companies and those opposed to Uber say that the regulations are simply too lax, favor ride-sharing firms, and will ultimately damage the traditional taxi industry.

Shop Insurance Canada (ShopInsuranceCanada.ca) says Toronto's transition to accept Uber was relatively smooth, but negative accusations are not unfounded:

"It certainly seems like the city, led by Mayor Tory, toned down already controversial draft regulations to secure a vote and ensure ride-sharing companies will be legal in the city. While Uber drivers now have more rules to follow, how those rules will be enforced has not been detailed, and it still appears that the taxi industry is regulated more."

Taxi drivers and UberX operatives now need $2 million in liability auto insurance, much lower than the predicated $5-7 million. The base fare for UberX will increase 75 cents to $3.25 per ride, and all Uber vehicles must be inspected twice per year. The law is not entirely geared to Uber and now allows taxi companies to use surge-pricing, but they can only do so for rides booked through an online app.

Auto insurance remains a thorn in Uber's side, argues Shop Insurance Canada. Ontario is unique in Canada because it has Aviva's ride-share specific auto insurance coverage, so this means Toronto based UberX drivers can be sufficiently insured. The problem is, the city has not said how it will enforce the insurance rule and taxi companies claim Uber drivers will not buy coverage and will lie about it.

"It is up to the city to make sure its regulations are enforced, which should also mean making sure Uber is pushing its drivers to have adequate auto insurance coverage."