Uber and other rideshare companies connect ride-seekers to drivers through a mobile app. After a match has been made, drivers pick up their passengers and transport them to their desired destinations. Before signing up to become a rideshare driver or using the service as a passenger, it is important to understand how rideshairing works and the risks associated with the industry.
Becoming a rideshare driver, especially through Uber, has become a polular option for those seeking full- or part-time employment. This is because the company allows its drivers to choose their own hours, and, for the company’s UberX drivers, no special licensing is required. However, because UberX drivers must use their personal insurance, drivers are unknowingly opening themselves up to the following risks:
- Personal auto policies don’t cover commercial activity. Under most standard personal auto policies in Canada, drivers are prohibited from engaging in commercial activities (renting or leasing out a vehicle, transporting passengers for pay, etc.). As it relates to ridesharing, personal auto insurance policies are not designed to provide adequate coverage when vehicles are used to transport passengers for compensation. For this reason, UberX drivers who rely solely on their personal policies for accident coverage could, in fact, have insufficient or even no protection in the event of an accident.
- Misleading insurers can leave you without coverage. As an UberX driver, misleading insurers – whether by providing inaccurate information on applications or failing to notify them of a change in risk (ie. carrying passengers for pay) – could get your auto policies voided from inception without warning, leaving you without coverage.
- Uber’s contingent insurance policy may be insufficient. Uber states that every ride initiated through its UberX platform is fully insured under the company’s $5 million contingent insurance policy and that the policy covers bodily injury and property damage. However, regulators and insurance experts have warned that this supplementary coverage is insufficient and is not compliant with insurance laws across Canada.
These risks are not only a concern for drivers, but for passengers as well. If you get into a car with an UberX or other rideshare driver who is not properly insured and that driver gets into an accident, you risk having no access to insurance protection, accident benefits or potential compensation for injuries. If you’re looking to work as a rideshare driver, contact Scrivens Insurance and Investment Solutions to ensure that you are properly covered.