After Uber Suspends Its Operations, What’s Next For Ride-Sharing In Alberta?

Excerpted article was written by
 On February 29, 2016, Uber suspended its operations in Edmonton after the city’s ride-sharing bylaw came into effect. The bylaw requires Uber drivers to carry either commercial insurance or insurance specifically tailored to ride-sharing companies. On the same day, Alberta’s transportation minister, Brian Mason, announced that while the basic framework for ride-sharing insurance has been approved, it will not be ready until the summer. In the meantime, another ridesharing company, TappCar, has stepped in to fill the void in Edmonton.

Uber Technologies Inc. is an American multinational online transportation network company headquartered in San Francisco, California. It develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request which is then routed to Uber drivers who use their own cars. Consumers pay the drivers through their smartphone app, with Uber taking a percentage of the fare.

Uber’s fares can often be much lower than comparable fares for taxis. The app conveniently displays a map that gives an estimated pickup and travel time, as well as an estimated fare before booking. Uber is now available in over 58 countries and 300 cities worldwide.

Uber launched in Edmonton in December, 2014 and in Calgary in October, 2015 and quickly became popular for its convenience and price. Concerns were raised, however, over Uber’s driver screening process and insurance coverage. Uber drivers used their personal vehicles under their personal automobile insurance policies while they were operating in these cities. As commercial vehicle insurance is generally more expensive than personal vehicle insurance, most Uber drivers did not inform their insurers they were driving for Uber, and did not adjust their coverage. Insurers will not generally extend coverage to people who are operating their vehicles for hire.

Uber was quickly shut down in Calgary by city council, which later set strict bylaws for ride-sharing in the city. Calgary’s bylaw requires ride-sharing drivers to have a Class 4 driver’s license — a commercial license. It also requires an annual $220 operating license from the city, regular inspections, proof of eligibility to work in Canada and a police background check. Uber officials have complained that these rules are far too onerous, and claim they will not be able to operate in Calgary as a result.

Uber has been the subject of ongoing protests and legal action from taxi drivers, taxi companies, and governments around the world who are trying to stop Uber from operating in their areas. These groups say that Uber presents unfair competition to taxis because the company does not pay taxes or licensing fees; it endangers passengers; and drivers are untrained, unlicensed and uninsured.

There has also been some controversy around Uber’s fare policies. As all Uber drivers are independent contractors, the supply of Uber drivers at any given time is dictated by how many drivers choose to make themselves available to accept fares. Uber uses a model called “surge pricing” to encourage more of its drivers to work during busy periods. Surge pricing will multiply the standard fare paid by users in periods of high demand. Unfortunately, the use of surge pricing hasn’t always been clear, resulting in some surprises when customers view their final bills. On New Year’s Eve last year, surge pricing resulted in some Uber customers being charged fares in excess of $1,000 for what would normally have been a $90 trip.

Uber currently maintains a $5 million Commercial General Liability (“CGL”) policy with AIG Insurance Company of Canada. This is a contingent insurance policy, and will only kick in if there is no other policy responding.

Aviva was the first company in Canada to introduce insurance policies specifically tailored to the ride-sharing industry. They launched their ride-sharing insurance policy in Ontario in February. The policy fills the gap between personal and commercial vehicle insurance, allowing policy holders to use their personal vehicles to drive for Uber. There are some restrictions in Aviva’s policy, such as: the maximum number of passengers, the driver must be licensed for a minimum of six years, and the vehicle is not to be used for any other commercial purpose. For an additional premium of approximately $500 (depending on risk factors) drivers may use their personal vehicles for Uber for up to 20 hours per week, with additional coverage possible.

Similar policies are expected to launch in Alberta in the near future, but it remains to be seen whether Uber will lift its suspension at that time. Uber officials have complained that the new bylaws passed by Edmonton and Calgary will add too many expenses to Uber drivers, making it economically unviable.

As mentioned earlier, a new ridesharing company, TappCar, stepped into the Edmonton market following Uber’s suspension of services in February. Like Uber, TappCar uses an app allowing customers to reserve and pay for rides on their smartphones. Unlike Uber, TappCar drivers have full commercial insurance and are in compliance with Edmonton’s ridesharing bylaws. Uber’s suspension of services has given TappCar the opportunity to grab market share from Uber before the new ride-sharing insurance regulations are put in place in the summer, making Uber’s return to Edmonton unsure.

Similarly, Calgary is now in the midst of a price war between its taxi companies. Calgary’s new vehicle for hire bylaws have removed minimum and maximum rates, allowing local taxi companies to start undercutting one another. A collapse in fare prices may eliminate some of the demand for Uber, and combined with the strictness of Calgary’s new bylaws, makes Uber’s return to Calgary far from certain.

In any event, particularly in Alberta’s current economic climate, the introduction of ride-sharing insurance regulations this summer will still likely have a strong effect on the insurance and taxi markets. The recent uptick in unemployment has left many Albertans looking for ways to earn a living outside of traditional employment. Ride-sharing allows anyone with a vehicle the opportunity to take advantage of an expensive asset that normally spends 95% of its time parked in parking lots or driveways. Ride-sharing drivers will potentially be using their vehicles three to four times more than they normally would, and insurers must be alive to the risks. Additionally, more monitoring of these drivers may be needed to ensure they operate within the limits of their policies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Ford recalls 202K pickups, SUVs, cars to fix transmissions

DETROIT _ Ford is recalling nearly 202,000 pickup trucks, SUVs and cars in North America because the automatic transmissions can suddenly downshift to first gear.

The company also said Wednesday that it’s recalling more than 81,000 Explorer SUVs to fix a rear suspension problem.

The transmission recall covers the 2011 and 2012 F-150 and the 2012 Expedition, Mustang and Lincoln Navigator. Ford says a software problem in a speed sensor can force the vehicles into a downshift. The problem has caused three crashes but no injuries.

Dealers will inspect the sensors. If they find no trouble codes, they’ll update software. If trouble codes are present they’ll replace the part that houses the speed sensor.

The Explorer recall covers SUVs and Police Interceptor models in the U.S., Canada and Mexico from 2014 and 2015. Ford says the suspension links could fracture due to poor welds.

The company says in a statement that the problem has caused one crash and an injury.

Dealers will replace the left and right rear suspension toe links and align the rear suspension at no cost to owners.


Ontario car insurance injury benefits poised to change

Ontario car insurance injury benefits poised to change

By Mike Crawley, CBC News

If you get injured in a car accident in Ontario after June 1, the amount of medical costs that your insurance company will cover may be a lot lower than before.

The provincial government is mandating changes to the standard auto insurance policies that will drive down the limits on medical, rehabilitation and attendant care coverage.

“Starting June 1, 2016, to help make insurance premiums more affordable, the benefits and coverages you receive in a standard auto insurance policy are changing,” says the provincial insurance regulator, the Financial Services Commission of Ontario (FSCO) on its website.

Insurance companies are now informing policy holders of the upcoming changes through the mail

For most injuries, the combined limit of $86,000 for medical, rehabilitation and attendant care is dropping to $65,000. For injuries defined as “catastrophic,” the $2 million combined limit for medical, rehabilitation and attendant care is dropping to $1 million.

For new policies purchased after June 1, the coverage changes will kick in right away. For existing policies, the new limits will apply once the policy renews following June 1.

Drivers can purchase additional coverage for higher premiums.

Other measures that take effect June 1 include:

  • Insurers can no longer use a minor at-fault accident as a reason to increase a driver’s premiums.
  • The standard deductible for comprehensive coverage increases to $500 (from $300).
  • The maximum interest rate that insurers can charge for making monthly payments on a one-year policy drops to 1.3% (from 3%).
Will insurance be denied if a key is hidden in the car and the car is stolen?

Will insurance be denied if a key is hidden in the car and the car is stolen?

Leaving a spare key in your car is a great idea – for car thieves. But if a crook does find the key you skillfully hid in the cup holder, you’ll probably still be covered by insurance.

“Most personal auto insurance policies do not include clauses that would deny coverage for a theft if the keys were in the car or if the doors were unlocked,” said State Farm Canada spokesman John Bordignon in an e-mail. “However, if a person has a pattern of many losses over a short period of time or a history of suspicious claims, this could make an insurance company investigate further or to review their relationship with them.”

We checked with the provinces with government insurance. They said the same thing – you’ll be covered if a thief uses your spare key to drive away. And, it happens.

“Unfortunately, people leaving their keys in their vehicle and having the vehicle stolen is pretty common in Saskatchewan, according to what we hear from police agencies,” said Kelley Brinkworth, media relations manager for Saskatchewan Government Insurance.

How often? We checked with several police departments and didn’t get exact numbers.

“We did a project a couple of years ago where 60 per cent of the stolen vehicles we recovered had keys in them,” said Dan Service, director of investigative services for the Western and Pacific region for the Insurance Bureau of Canada.


Ontario auto insurance rates drop, but still short of August 2015 target

TORONTO _ Auto insurance rates in Ontario have dropped about 10 per cent on average in the past couple of years, putting the Liberal government two-thirds of the way to a goal that passed eight months ago.

The Liberals promised in August 2013 to reduce car insurance premiums an average of 15 per cent by August 2015 as part of a deal to get NDP support for that year’s budget when they were still a minority government.

But after August came and went last year with the government’s target not even halfway met, Premier Kathleen Wynne said she always knew it was a “stretch goal.”

The latest numbers from the Financial Services Commission of Ontario, for the first quarter of 2016, show that approved rates decreased on average by about three per cent.

The government introduced legislation last year that it says will lower costs for insurance companies and will lead to reduced rates for drivers.

Finance Minister Charles Sousa says the government has made progress, but further reductions must be made “in a fair and practical manner” and the auto insurance industry must also do its part.


Aggressiveness increases behind the wheel, inside Service King & the disturbing truth behind abandoned supercars

Aggressiveness increases behind the wheel, inside Service King & the disturbing truth behind abandoned supercars

Toronto, Ontario — April 21, 2016 — This week we dip into a study that confirms some really, really obvious things, a profile on the folks behind US consolidator Service King and why supercars are being abandoned throughout the United Arab Emirates.

An insurance company has done a study confirming what most know: More than half (57 percent) of adults act “more aggressively than normal when in the driver’s seat.” According to research from Churchill Car Insurance, 31 percent of respondents have sworn at strangers while they were driving, compared to only 12 percent when face-to-face. As well, “26 percent of motorists have shouted at others when behind the wheel, but only 12 percent have done so in person.”

The report also found that “younger people are also more likely to be rash, with 62 percent of those aged 18 to 34 having acted aggressively, while 49 percent of those aged 55 and up did so.” The most common excuse given for aggressive behaviour in the car is to vent frustrations (50 percent), followed by “it’s a bad habit” (30 percent), and “It isn’t a conscious decision, I just get angry in the car” (29 percent). According to a report on the research, “There is a psychological basis for this, as drivers feel disassociated from their environment when in an enclosed space such as a car. This allows them to express anger and frustration towards other drivers, and even life in general, with low risk of conflict.”

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