Insurance Bureau of Canada pushing to get Uber drivers covered

theglobeandmail.com
Oct. 13, 2015
By Sean Silcoff and Jacqueline Nelson

Tech superstar Uber has received a hand from Canadian insurers as it attempts to gain full legitimacy here.

The Insurance Bureau of Canada says it is pushing some provinces for rule changes that would allow drivers working with the ride-sharing service to obtain a new type of coverage.

The association of property and casualty insurers has sent a three-page legislative proposal to finance departments in Ontario and Alberta and to Ontario MPPs, IBC spokesman Steve Kee said. The proposal, which sets out minimum insurance requirements and types of activities covered, is aimed at “eliminating some gaps and allowing for competitive insurance markets for transportation network companies,” he said. IBC and its members began working on the file in the spring, and completed the document last month. “Things have moved quickly,” Mr. Kee said.

Uber is working with Intact Financial Corp. and regulators to create Canada’s first auto insurance policy geared to ride-sharing services. The IBC’s push suggests the industry is ready to support the disruptive changes Uber has brought to the market.

Sources say the Alberta and Ontario governments are working on the Uber file in preparation for cabinet decisions in the coming months. The provinces would have to make legislative changes to allow insurers to sell new products tailored to Uber drivers.

“The [Alberta] government has not decided as of yet...whether to defend the taxi industry or open the market up for Uber,” an Alberta government official said. This summer, Alberta’s Superintendent of Insurance warned that drivers are not insurance-compliant and had to get their coverage up to par.

Meanwhile, an Ontario government source said the Financial Services Commission of Ontario [FSCO] is “looking at the insurance issue [and] options concerning how Uber drivers would be insured and whether that would differ from existing practices.”

Uber has been fighting on two fronts in Canada. The Silicon Valley-based company has sparked the ire of cab drivers in cities here and globally, including Toronto and Ottawa, and halted operations in Vancouver in 2012 and Calgary in 2014, pushed out by the imposition of expensive regulations. Local governments in Edmonton and Kitchener, Ont., are attempting to integrate the service into their taxi regulations despite industry pushback.

In September, Toronto council voted to allow Uber’s app to be used to hail regulated taxis, but asked the company to stop operating for six months while it studied the matter. Uber refused. The city of Ottawa, meanwhile, calls the service illegal, and police have issued more than 142 charges to 64 drivers.

Uber, founded in 2009, has become the most controversial tech firm of the mobile era, accused by municipalities and taxi operators of flouting rules that have governed ride-fare services for years. The backlash is part of a larger trend as online sharing services such as Airbnb challenge traditional service providers in an era when people expect the on-demand efficiency of mobile apps.

At the same time, some politicians, including Ontario Premier Kathleen Wynne and Toronto Mayor John Tory, have left the door open, acknowledging it is fruitless to stand in the way of technological progress. “We can’t pretend that the technology doesn’t exist and that people aren’t going to use it,” Ms. Wynne said in July. “We need to make sure that whatever regime is in place keeps people safe and puts in place the right parameters.”

Uber’s foes have not stopped it from expanding to 300 cities and garnering a valuation of more than $40-billion (U.S.). Canadians now take more than one million Uber rides a month from thousands of drivers.

At the same time, Uber has acknowledged its biggest challenge is ensuring drivers are properly insured. Mr. Kee said the big issue is that standard policies do not cover vehicles used to carry paying passengers. Commercial policies are expensive, so many Uber drivers stick with their personal policies. That creates heightened risks, as drivers and customers could end up paying costs for damages, losses and liabilities. Uber has provided contingent insurance to drivers - but acknowledges this is an interim measure.

Uber spokeswoman Susie Heath said the private company has been committed from the start to “safely connecting riders with drivers and a big part of this means every ride is covered by insurance.”

Mr. Kee said the IBC’s proposal “will hopefully be a way to move forward.” He declined to share details of the proposal.