Insurance Bureau of Canada issues warning about ride-sharing service Uber

October 23rd, 2014 by admin

The U.S.-based ride-sharing service Uber has plans to expand to Canada, but insurance experts are sounding their alarms.

"Uber wants to add Calgary to the list of 200-plus cities worldwide where it operates, linking people who need rides with people who can offer them," Jeremy Klaszus of Metro writes. "But the Insurance Bureau of Canada has warned that carrying passengers for payment could void Alberta drivers' policies if they don't have commercial coverage."

While Uber asserts that its drivers are covered by liability insurance of $5 million on top of personal average, officials are still expressing their resignation, at least until the company adheres to stricter safety regulations.

As CBC explains, Uber makes use of a mobile app to match interested drivers with passengers. Klaszus of Metro adds that Uber—compared to taxis—match supply with fluctuating demand. By contrast, taxis do not adequately handle this fluctuation at all times, leading to frustrated users. 

In recent years, ride-sharing services have rapidly grown in popularity, and the services do offer some notable benefits. "The passengers get where they need to go and the drivers make money. And there's no fussing with payment cards. As with the car-sharing system car2go, it all happens through the app," Klaszus explains.

Some critics, including a recent city report, suggest that Uber operates as an "unregulated taxi market," without the necessary safety requirements. However, Lauren Altmin of Uber claims that their drivers must be licensed, along with pass a criminal background check and have their own, personal insurance coverage for their vehicles.