Uber drivers will pay less for insurance than cabbies in MPI proposal

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Uber drivers will pay less than taxi operators — but more than regular drivers — if Manitoba Public Insurance’s proposed vehicle-for-hire insurance plan is approved by the Public Utilities Board.

MPI submitted an application for vehicles-for-hire insurance to the PUB on Friday, two days after city council approved the Vehicles For Hire bylaw that allows services such as Uber and Lyft to start operating March 1.

The 2018 interim application updates current premiums for existing classes of taxi, limo and accessible-vehicle drivers. It also proposes ride-hailing service driver rates.

“Taxi premiums are based on claims experience; we have historical data on that,” MPI spokesman Brian Smiley said Tuesday. “Typically, taxis are on the roads 24-7, so their exposure to collisions is much greater than other vehicle classes.”

Vehicles used by ride-hailing service drivers aren’t on the roads as often, based on information from other markets, he said.

“Many of them are only on the roads for several hours,” he said.

But ride-hailing driver insurance rates could change in the future, depending on MPI’s claims experience, which will reflect the number of collisions the vehicles are involved in, he said.

The Crown corporation’s proposal states current taxi insurance is not believed to be a good representation of the loss exposure for ride-hailing drivers.

MPI’s proposed rates for Uber and Lyft drivers are based on the average percentage increase of ride-hailing driver insurance rates compared to private passenger rates in other Canadian cities including Calgary, Edmonton, Montreal and Toronto.

Type of vehicle, residence location, vehicle purpose and driving record are all factors that influence an individual’s insurance premium.

All vehicles with 10 or fewer seats hired by a passenger for a single trip where the passenger controls the destination, will have basic insurance coverage consistent with the all-purpose passenger vehicle coverage. That includes $200,000 third-party liability, $50,000 minimum insured value and $500 deductible.

Ride-hailing drivers could pay up to 20 per cent above the current rate for a private passenger vehicle’s all-purpose insurance, depending on the hours the vehicle is on the road.

PUB is in the process of reviewing the application. The board has the ability to alter or question the document’s contents.

Darren Christle, executive director of the PUB, said it’s most appropriate to say rates between ride-hailing service and taxi drivers will be “different.”

The proposal states all vehicle-for-hire insurance policies will be based on “time bands,” enabling drivers to select desired operation times; part-time drivers would pay lower rates.

The four bands include different weekday shifts, evening and overnight shifts and one covering entire weekends. Drivers could choose one, all or combinations of the bands.

There will be a five per cent fee increase, on top of the all-purpose rate, for each band selected by a vehicle-for-hire driver.

“It’s almost like a tiered model. It’s different from what I’ve seen in the past,” he said. “Granted, taxicabs would be on the road 24-7.”

Christle said he expects a final decision on interim rates the week of Jan. 12, as long as there are no interruptions or delays. Members of the public with concerns about MPI’s proposal will have to file their concerns in writing, and do it soon, he said.

The board will revisit the rating structure as part of the regular annual process in June.

Christle said that just a month ago, PUB finalized a general rate application that included a rate increase for taxis. Depending on what the PUB decides next month, there could be an adjustment to that rate.

If the proposal is passed as is, all vehicle for hire individuals would be able to receive Driver Safety Rating (DSR) premium discounts if registered as an individual. At the highest DSR level, a driver can earn a 33 per cent premium discount.

“There are no (ride-hailing) vehicles that’ve been in Manitoba previously so the whole thing is new,” Smiley said. “We’re determining rates as best we can and as fair as we can for all drivers.”

Vehicle for hire insurance will be available for purchase at brokers and MPI service centres, according to the proposal, and taxi drivers will no longer have to provide proof of a taxicab business licence or inspection certificate.

maggie.macintosh@freepress.mb.ca