Uber is in 51 countries around the world but is not in The Bahamas yet. Popular in big cities, Uber is an app which connects drivers with people who need rides, and essentially works as a taxi meter helping drivers earn money using their own cars.
As you can imagine, there has been huge backlash in the form of massive taxi protests in Paris, Madrid, Rome, Milan and Berlin. Those opposed to Uber and various other rideshare apps including Lyft and Sidecar, are concerned about the legitimacy of drivers and whether or not they are licensed, properly insured and vetted with background checks. Valued at $40 billion, despite the growing pains, Uber is a power in the new "sharing economy" and as local regulations vary greatly, legislators around the world are scrambling to make sense of it. Most countries' laws prohibit fee-paying transport services that use unregistered, private or rented vehicles. Many federal governments like Korea have issued cease and desist orders against Uber whilst other regulators such as the City of Toronto officials in Canada have been fining Uber in order to encourage them to get licensed and become compliant.
Under section 36 of the Bahamas Road Traffic Act, it is an offence to drive (or hire another person to drive) a public service vehicle unless they hold the appropriate public service driver's license.
To apply for a Bahamian public service driver's license you must be a Bahamian citizen over 21 years of age having held a driver's license for at least three years and Bahamahost certified. Following that, there are interviews, practical driving and maintenance repairs tests, physical and mental competency tests, character references and criminal checks including traffic offenses. Given our tourism economy, there is an incredible amount of regulation regarding public service drivers including standard of conduct, appearance and dress, maximum fares as well as the treatment of passengers' belongings.
Likewise, it is an offense under section 64 of the act to use a motor vehicle to carry passengers for hire or reward unless it is licensed under the act as a public service vehicle. Thus, drivers of privately licensed motor vehicles are strictly prohibited from carrying fee-paying passengers.
The insurance policies for private motor vehicles reflect this and use for hire or reward is excluded in the policy wording and on the motor certificate. Any person who enters into a private vehicle and contracts it for hire is taking the risk that they are not covered by insurance for any loss or damage sustained as a passenger of that car.
There are many questions surrounding accident liability and the use of Uber. If you have the app on your phone but aren't using it, are you in contravention of the act? Does this still negate your insurance policy? What if the app is active but you have no passengers? In the case of six-year-old Sofia Liu, she was a pedestrian on a crosswalk when she was hit and killed by an Uber driver back in December 2013. Her mother, who was also injured, is suing the driver as well as Uber, claiming he was in the course of employment because the Uber app was activated at the time. Uber has denied liability, claiming that it had no responsibility to insure the driver as he was an independent contractor, not an employee.
If a private vehicle owner begins engaging in livery services, it is a material change in the nature of the risk and insurers would be well within their rights to cancel the insurance policy the vehicle. However, given the magnitude of the new sharing economy, insurers may be forced to look at creating new insurance products to meet the demand. Earlier this year in California, a bill was passed requiring more insurance cover for Uber and other rideshare drivers. The law is set to take effect in July 2015 which has two primary effects on the regulation of ridesharing companies. First, it imposes disclosure requirements on the company. Second, it sets minimum insurance coverage requirements for all ridesharing companies operating in California. Insurers are therefore developing their products to meet the requirements set out in this new law. The rideshare companies will now have commercial liability insurance, but there are levels of cover which may and may not apply until drivers are matched with a paying customer which still leaves enormous grey areas; not to mention the question of jurisdiction and cover for international Uber drivers.
o This article is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. If you need advice on the issues raised in this article or otherwise, you should consult a qualified insurance broker. Stephanie Cleare is a fully licensed and qualified account executive at Tavares & Higgs Insurance with 12 years experience in the Bahamian general insurance industry. Email scleare@tavareshiggs.com.

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