A municipality is hailing Uber to run its public transit instead of buses – a first for Canada and a move that changes the insurance equation.

Innisfil, Ontario, began subsidizing Uber rides for residents on May 01, with trips costing $3 around the town hall, $5 to the GO regional rail station and all other areas getting a $5 discount from the municipal government. The town of 100,000 found partnering with Uber was cheaper than paying for buses and drivers.

Christopher Sinardo, public sector national practice leader for BFL Canada Risk and Insurance Services, said the municipality of Innisfil effectively transferred its risk to Uber by contracting them out.

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“With auto insurance, whether it’s a bus or a private individual or a taxi, the province requires that the owner of the vehicle buy the insurance,” Sinardo said. “So really what they’ve done from an insurance standpoint is rather than going and buying the bus and the insurance on the bus, is they’ve transferred the risk to the individual Uber operators.”

Intact Insurance covers “every Uber ride in Ontario irrespective of how the ride originates (that is, whether it is from a deal with a township or otherwise),” according to Hazel Tan, Intact’s manager for external communications.

However, despite Uber being a broker business in Ontario, Sinardo said he thinks brokers’ opportunities will stay flat in Innisfil because the exposure and population will stay the same.

“You still have the same number of people, so you still have the same exposure,” Sinardo said. “It’s either you have one bus that picks them all up - and that’s an insurance opportunity. Or there are smaller opportunities with each of the individual Uber operators. There are more transactions that are going to take place but they’re going to be smaller… it’s still up to the Uber operator to make sure they have the appropriate insurance.”