Uber is legal in Toronto – will insurers step up?

Uber is legal in Toronto – will insurers step up?

Uber is legal in Toronto – will insurers step up? After years of tense debate and illicit operations, Uber finally has the green light to operate legally on Toronto city streets. City council voted 27-15 in favour of new regulations that would legalize the ride-sharing company as well as ease conditions for the taxi industry.

Among the changes is the introduction of a new Private Transportation Class (PTC), under which ride-share services will operate. Both Uber and taxi drivers must also take out minimum $2-million liability coverage, report proof of insurance to the city, and have vehicles inspected twice per year.

Currently, Aviva is the only provider of ride-share coverage, which is capped at a maximum of 20 hours per week behind the wheel.  It remains to be seen whether legalization of ride-sharing will prompt other insurers to introduce additional products.

“We just welcome more competition to the marketplace as this product grows,” said Peter Van Dyk, account executive at Burlington-based PV&V Insurance Centre. “I think it (the Aviva product) has only been available for six months or so, and that as it becomes more commonplace in the industry, that we see more markets stepping up.”

“We want clients to be aware that that gap in coverage exists, and that the market is trying to fill it in.”

Other changes agreed upon city council include:
  • The minimum fare base for PTCs must increase to $3.25 from $2.50.
  • PTCs must be booked via a smartphone app, utilize a surge-pricing model, and have no maximum fare
  • Taxis may also use surge pricing if the fare is booked via a smartphone app
  • All taxis must have cameras and flashing emergency lights installed. PTCs are not currently required to, though the city will review the need for these measures in one year
  • The rollback of 2014 taxi reforms what would have phased out standard plate ownership for taxis, and the requirement that all taxis be disabled-accessible by 2024
The new requirements are a softer version than what was proposed by the city’s Licencing and Standards Committee, which would have required PTC drivers pay a $20,000 licencing fee and acquire $2-million personal and $5-million commercial insurance policies. Uber had threatened to cease operations in Toronto altogether should that proposal come to fruition, but appear content with the city’s current iteration.

“We’re certainly pleased; this is a great day for riders in the city of Toronto, a great day for drivers as well using the Uber platform,” stated Ian Black, general manager of Uber Canada following council’s vote.