Uber drivers need insurance tailored to suit them; that is one of the messages of a new long-awaited report on the sharing economy from research group MaRS Solutions Lab, released late last week.
The report singled out insurance as “One of the most pronounced issues to emerge from our work”, saying the sharing economy is blurring the line between private and commercial use and that it was up to the authorities to compel insurers to catch up.
The report identified coverage for the driver as a coverage gap in the ride-sharing model and said it was up to government to address that by “mandat[ing] adequate insurance but remov[ing] barriers to enable the rapid approval of new products.”
The report noted that in other areas, mainly south of the border, insurance policies had been introduced “with flexible premiums, based on types of use[…] These kinds of hybrid products are needed for the Ontario market.”
The report also called for governments contemplating regulation for the sharing economy to ease the expectations placed on conventional operators.
"When it comes to introducing regulation for the sharing economy, governments should not only look at regulating new entrants, but should also revisit current regulations to reduce burden for existing operators," said the director of MaRS Solutions Lab, Joeri van den Steenhoven, in a statement released with the report.
Specifically, the report called for a lowering of the cost of commercial insurance for taxis.
“The cost of insurance was identified as the single most burdensome aspect of being a taxicab driver, ultimately limiting their ability to compete with Uber. Taxicab drivers are paying anywhere from $4,000 to $7,000 a year for commercial insurance. They are being charged for their exposure to risk, not necessarily their driving history. A policy should be developed that allows for cooperative-based insurance that rewards drivers with a discount for good behaviour.”
The report called for telematics to be used as a means of basing premiums on individual drivers.
“The Ministry of Finance and Municipal Licensing and Standards should convene a task force comprising stakeholders from the insurance and taxi industries to review existing regulations and identify areas for changes in legislation.”
To put together the report MaRS interviewed more than 100 people involved in some way with the “sharing economy”, including taxi drivers, uberX drivers, hotel managers and Airbnb hosts, as well as officials from the provincial and municipal levels of government.