Uber Drivers and Passengers Face Serious Legal and Insurance Consequences


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The concept behind Uber, Lyft and similar apps seems harmless enough – matching up paying passengers with willing drivers where they can’t get a taxi. Uber is currently not available in North Bay, but if you are in Ottawa, Montreal or Toronto you can use the service as either a driver or passenger. Uber drivers and passengers should know about the risks before tapping the app on their phone.

Risks for Uber drivers

The biggest risk for drivers is that a personal automobile insurance policy does not cover using your vehicle to carry paying passengers and likely including while you are waiting for a fair. This means that if you get in an accident while operating as a taxi, you could face serious liability and vehicle replacement costs.

Additionally, if you are using the vehicle to carry paying passengers, and don’t have the requisite municipal license, you could be operating in contravention of local bylaws. Cities such as Ottawa and Toronto are cracking down on Uber drivers, in some cases having bylaw officers book rides on the app and hand out fines to drivers who don’t have taxi licenses.

The worst case scenario for an Uber driver is that the vehicle policy is invalidated by undisclosed use of operating as a taxi, and to carry passengers for hire, leaving you without auto insurance, making you liable for any legal or medical costs and making it harder – and more expensive – for you to get auto insurance in the future.

If you do choose to register your vehicle as a taxi, it must be properly licensed and insured commercially as a taxi – the Permission to Carry Paying Passengers endorsement is not enough.

Risks for Uber passengers

While the risks associated with being an Uber driver are great, risks for passengers are greater. First of all, you may be getting into a vehicle that is not insured properly, which could leave you with the burden of going after the driver in court to reclaim legal and medical costs. If an insurer voids an auto policy or denies a claim due to material misrepresentation, then the vehicle owner and driver would be personally liable for damages they cause in a accident including property damage and bodily injury. Additionally, to sue for injuries in Ontario, you must meet a certain threshold of injury before you can do so.

The next – and greatest – risk is that the background checks that Uber drivers are put through are spotty at best. A taxi driver must have a clean criminal and driving record to maintain their taxi license. According to a NBC news report, Uber used drivers in the San Francisco area who had various criminal charges on their records including domestic assault, drug trafficking and burglary. While the service states that it runs background checks, these weren’t enough to catch the records uncovered by NBC’s investigative report.

If you are a driver that has been using the service, contact your broker to get the proper insurance policy for your vehicle use, as well as your local municipal licensing office to inquire about a taxi license to protect yourself and your passengers. If you are an Uber passenger, ask to see proof that your driver holds both a taxi license and the proper insurance before your ride begins. Or do the smart thing and just get a taxi – a little extra wait for a taxi isn’t worth the potential hassle.

If you are interested in a quote to ensure you are properly protected as an Uber driver, you can contact Christine Dokis Toll Free at 800-263-5950, directly by phone or text at 705-472-5901 and email christine@kennedyinsurance.ca.


CBC News: Uber warning issued by Canada’s insurance industry

Ontario Broker magazine: Uber technology does not trump the law

  • YamDigger

    This article sounds like it was written by Beck Taxi.

  • gg

    Uber insures passengers and other drivers. Insurance is refusing to provide proper insurance to anyone. And for your information you are required to have a clean criminal and driving record in order to drive. Citing San Francisco when speaking about Canada is dubious at best

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  • Theresa

    When i contacted Uber about insurance they advised they carry $5million additional insurance for drivers and passengers in Canada.

  • fully Licensed – to practice law

    Well written but missing some key components, Whether or not the driver of a vehicle is driving a passenger for moneys, is almost irrelevant. The fact is that the moment you have registered with a Taxi or equivalent brokerage be it Uber or anyone else you did so for the purpose of conducting yourself as a taxi driver. Your need the proper insurance to do so…….. If you do not have the training, the license to be a taxi driver or driving a licensed taxi cab vehicle, which has the security cameras, the licensing commission sealed meter, the listed bill of riders rights and most importantly the 2,000,000.00 taxi cab certified insurance, you cannot legally pick up any paying passengers,, regardless on who or how they were dispatched to you. The Licensing Commission has implemented the necessary by-laws and is of course relying on the insurance act, the highway traffic act as well as the criminal code of Ontario in its determination for the public good and safety.
    The Insurance Act is clear on this in that you may not use a private vehicle in such a manner. Because a judge had ruled that Uber is not commercial does not make what Uber drivers do anything that private insurance could or would cover.

    The real legal fact is that no Uber driver in Ontario can possibly be insured to carry paying passengers due to the nature of risk involvement in the Province of Ontario. In short they have no insurance and truly risk a charge and 250,000.00 fine. Notifying their insurance of what they are doing would simply mean cancelation of their insurance for breach of contract. In short no coverage at all. There is also no certificate insurance which allegedly kicks in when a passenger gets in and turns off when the passenger leave. There is also no such thing as any primary insurance existing as an umbrella insurance. The reason why cab owners and drivers pay such high insurance rates is due to the risk involved , that risk cannot be translated to i.e. some student driving a brand new SUV with a leather interior,,, the amounts of money necessary for such a person would exceed any possible chart that the insurer could create,,, and in fact call them ,,, no one would or could insure Uber. ” If ” Such Uber drivers could conduct themselves as cab drivers for the scant insurance that they pay, the taxi drivers would have a serious case of discrimination against the insurance companies who would in effect have gouged them all these years,,,,

    I recently read a story where a six year old girl was killed by an uber driver, Although Uber settled the legal action with the family I cannot help but know that a professional and licensed driver would not have done such a thing,,,,, If we consider that such an unlicensed and untrained person were carrying on any business which resulted in someones death especially a child’s death I assure you there would be a charge of manslaughter.

  • John

    Sounds like a similar warning issued by my Local taxi company. This article also links to a CBC warming from insurance companies. These “warmings” are clearly biased. The government needs to stay out of the free market! The Taxi companies should also stop being so offended and instead should see this as friendly competition and as motivation to improve their own inferior service. Uber offers it’s own insurance, both the driver and the passenger are insured. Uber also has a rating and review system, so it’s unlikely that you’ll have a bad time riding with a 5/5 driver. I’ve used Uber a few times, so have my friends, and it is without a doubt better than any Taxi service I’ve used (and less expensive).

  • Salim

    This is written by taxi cap driver lol. You guys are way behind. Allow the technology to help people get quick, easier and cheaper ride.

  • shah

    I think UberX is very unsafe for both drivers and passengers because they don’t have Machanic inspection like Regular taxi they don’t have proper insurance like taxi they don’t have taxi license like taxi drivers most of the drivers of Uber retire or the people on welfare so they don’t Care and people they especially use UberX for Taxi they don’t know behind the bar how is working if anyone knows how dangerous is UberX I believe they never use it….

  • Sam

    This article looks like written by one of the txai companies,,
    The most people’s are so happy with uber and the don’t want go back to taxis drivers altitudes any more.
    Every body knows that even This mr article writer because the people wants their convenience.
    Some Uber benefits.
    1 fast to reach the customer.
    2 alots cheaper.
    3 better service.
    4 the passengers are tracking their road.
    5. No need to pay an extra tips in the top of their late and high rate charge.
    6 passengers choose the estimation time to get into the uber.
    7. No any more rejects from the drivers for the short trips.
    And so many points. Let’s people choose for whatever they want to get
    It is the freedom, time, money and convenience.

  • jj

    Goofball I know many taxi driver who have more than 4 conviction on their record and driving taxi.

  • jaswinder

    Saftey is first money should not matter no high risk

  • Yamdigger2

    Yamdigger’s comment sounds like it was written by an Uber staffer…

  • Meber

    My first language is french , so excuse my english.

    I believe Uber is an amazing service, organization and concept.
    This being said if a problem exists, disregarding the problem do not make it to be gone.

    Here is the problem :
    My insurance broker did call 5 insurance company and no one will insure you (or me) if you do person transportation (like Uber) while being paid for it.
    I also called Belair Direct and they will refuse to insure you,completely, if you do Uber service.
    So, even if I have a perfect record of driving for over 20 years and no accident ,
    Am I willing to take the risk that one day a texter will involve me and my car in an accident (where I would not be responsible anyway)
    while I am not covered and risk to loose my car and being hit after by a potential law suit from my client because I am not covered ?
    The answer is NO !

    And if you decide you will not say a word to your insurance company and do Uber: if they find out after an accident inquiry that you were hidding this, they can refuse to pay any compensation.
    Oh! Yes they will be able to prove it ! Just the presence of the Uber App on your phone isn’t that enough ?

    Note before the last : I hear you saying: I will get a Taxi insurance then. No. Two insurance broker told me : “to get a Taxi insurance you have to be a registered Taxi and pay for a Taxi permit” of $200,000.00 (In Montreal).

    Though luck for me ! I was hoping to make myself an additionnal revenu as a retired worker and do Uber, unless I missed something with this insurance issue.

    The question remain: is any insurance company offering this service now for Uber drivers. From what I heard the insurance companies are looking into this but the insurance product is apparently not yet available … but it is coming .. The other questions are when and how expensive ?

    And, no, I am not a Taxi driver nor an insurance broker that is trying to make any trouble .

    I think it is mandatory to all the actual Uber drivers to know that they may be at high risk even if they don’t know it !

    I am going to a Uber information cession on this day ( Oct.8 2015) tonight and I hope I will be able to find there is a way to be covered with Uber. I will keep you posted

    Drive insured and safely.


  • Mike

    Here is my concern: Why don’t these Taxi Driver just gives up and join Uber?

  • Muralidhar Murahari

    I am a broke guy in Canada and jobless too.

    Wish I can clear all the legal hurdles, if any, to take Uber riders in my car.

    I will definitely use a Uber driver if it costs me less?:)

  • Melanie

    I drove cab for 5 years. I leased a cab from 3 different owners and all of the cabs were garbage cars that didn’t work well ever. There were always issues with them. They were off the road probably ten to twelve days a month. One day I was driving and both my brakes and my emergency brakes failed. I went through a major intersection and was lucky to get through without either being killed or killing someone else. Also I was passed up for the good fares because I didn’t drive for the company. I always felt afraid because I didn’t know what kind person I was picking up off the street. They could take my money and run. With Uber they have the client’s credit card address and personal information. I don’t have to carry cash so I don’t have to worry about being robbed. I have to have a vehicle inspection report every three months. I know my vehicle and my clients are safe. That being said it is true neither driver’s nor their vehicles are covered by Uber or their own insurance company in case of accident. The riders are covered. I no longer drive for Uber at this time but for sure once an insurance company takes me on I will be out there providing the best service I can for my clients. I would never drive a cab again after driving for Uber.

  • Mick

    In my own experience, Uber is not taking away any business from my taxi habits because the taxi industry has priced themselves out of the market; who can afford one on anything but an emergency basis? I can’t.

    Case in point last year I used a cab 3 times, the past month I have used Uber 6 times. For a short ride I have paid Uber 8 dollars with a friend as opposed to paying 6 for public transit which includes at least one transfer, streetcar to subway carrying stuff for a pot luck dinner party during rainy weather.

    Cleaner cabs and nicer drivers.

  • Ryan

    Biggest risk today is for the driver. Passenger will be covered by their own auto insurance but forget about any substantial windfall. Passenger will get loss of income coverage and little else. Uber offers contingent insurance meaning contingent on what is not covered by the passenger/driver insurance policy. Driver is at risk of insurance policy being cancelled and potentially personally sued by a passenger involved in an accident. Until the government and insurance companies figure out how to handle Uber, I think driving for Uber is a high risk with little reward.

    That being said, you can be sure there will be fare hikes with Uber. Uber itself is losing money as it continues to try and take market share. It has very deep pockets with Wallstreet investors but eventually these investors will want a return. Additionally the insurance companies will capitalize on this new market segment and the government will surely grab their tax to boot. Unfortunately the reality is Uber customers are not being charged as much as they need to be in order for Uber to make money today. Then add another 20 percent minimum to cover taxes and insurance.

    Maybe cabs aren’t so overpriced after all.

  • YCOB

    I tried to look for uber service in North Bay, unfortunately, i can’t find any UberX driver in North Bay. Anyone know where I can find one in North Bay?

  • Ali

    Hi. First of all, I would like to thank you for this info. Second, I have research about the Uber in Toronto. just I want to know , if your website is reliable or not, finally the best regards.

    • Jamie


      Thanks for reading about the insurance concerns for Uber drivers. The information on our site is reliable and accurate at the time written. We are currently writing an article about one of our insurer partners, Aviva Canada, who will be offering an affordable solution for Uber drivers very soon. Read about it in Canadian Underwriter: http://bit.ly/1OZcRJC.