Uber Technologies Inc., colloquially known as “Uber,” has gained immense popularity in cities across North America. Drivers and passengers alike have been mesmerized by the Uber’s sleek and modern appeal. In particular, Uber drivers use their personal vehicles to earn money with a certain unique freedom, which has caused a surge in the amount of drivers who are ceasing the opportunity at fast cash.
The company has also been a polarizing topic of discussion, and a thorn in the side of many taxi companies. In Canada, perhaps the strongest voices of discontent have emerged from Toronto. So much so that the City of Toronto took active steps to shut down Uber by way of an application through the Superior Court of Justice. The Uber app, UberX, has been a central issue in this dispute, since the City argued that Uber was engaged in the “requesting and accepting of requests for transportation services.” This, of course, meant that Uber needed the requisite licensing, which it had never obtained. Thus, Uber was operating as an illegal taxi company. The City clung to this, arguably, valid position.
In March 2015, Uber brought a motion to seal its insurance policy from becoming part of the public record. Uber had maintained, in its submissions before the Court, that its policy was “highly confidential” and had “commercially sensitive information.” The City, on the other hand, alleged that Uber did not have adequate insurance coverage for neither passengers nor drivers. Ultimately, Justice Diamond disagreed with Uber’s position on this issue and did not grant the sealing order. While the City gained traction with this ruling, in July 2015, Justice Dunphy, ultimately decided that the City had failed to prove that Uber had breached any by-laws and dismissed its application. Surprisingly, the City did not appeal this peculiar decision. This was a significant, and frankly unexpected, legal triumph for Uber.
However, the issue of insurance is key and has significant practical consequences, but it has not received much attention in the public forum until the last few weeks. In Ontario, the personal auto insurance policy is defined by the province. There are specific provisions which state that in the event of an accident, the driver’s policy is void, if the driver had used his vehicle for a commercial purpose. In June 2015, Tawfiqul Alam, a Toronto UberX driver, found himself in this exact position. Both him and the passenger were taken to the hospital and the vehicle was destroyed. When Mr. Alam filed a claim with his insurer, he was promptly, and correctly, advised that he had no converge since he was using his vehicle for commercial activity. He has since commenced an action against Uber and claims that Uber had engaged in misrepresentation. It is worth noting that in light of this incident, Uber has publicly acknowledged that it only requires its drivers to have personal auto insurance. To date, the issue of whether the Uber insurance policy provides any coverage for drivers or passengers is murky at best.
This is, undoubtedly, the beginning of Uber’s legal troubles, and a cautionary tale for those who are under Uber’s magnificent spell.
**Alex Valova is a Toronto-based barrister and a Brock alumni. She has partnered with BUSU and established the Student Legal Clinic.