Uber Drivers and Passengers Face Serious Legal and Insurance Consequences


Affordable Uber insurance now available in Ontario!
Learn more and request a free quote ►


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