Ride-sharing service UberX sparks controversy

A new smartphone app that launched in Toronto this month has taxi companies in uproar and city officials questioning its legality.

UberX is a ride-sharing service that is 40 per cent cheaper than a Toronto taxi.

“People can use their personal vehicles to provide rides to those who request them through the app,” explained Ian Black, general manager of Uber Toronto.

Anyone over the age of 21 with a valid auto license is eligible to become a driver.

Chad Gibson signed up in order to make a little extra cash on the side.

READ MORE: Berlin taxi drivers hail Uber ban

“I bartend and I’m a stand up comic. I keep weird hours. This allows me to work when I’m not doing anything else,” said Gibson, who made $175 on Sept. 8, the official launch of the app.

Drivers like Gibson are not licensed by the City of Toronto, which has led to questions about safety.

“The City is concerned that the drivers do not hold a city-issued licence, which ensures the adequacy of the background screening, nor have the drivers taken the required training as mandated by the City,” explained Tracey Cook, executive director of the Municipal Licensing and Standards department.

UberX requires passengers to pay a $1.00 fee per ride that goes toward criminal background checks on potential drivers.

“We’re checking with both RCMP and Toronto police,” said Black, who noted checks are done every four years, which is similar to the process for screening Toronto cab drivers.

However, one of the biggest differences between the ride-sharing service and a taxi is that UberX drivers are only required to carry personal rather than commercial insurance.

If passengers are involved in an accident, there is the possibility that they will not be covered.

“If a driver is using their vehicle for hire, under a private passenger auto policy – a claim would be denied,” said Pete Karageorgos with the Insurance Bureau of Canada.

“Also, their policy likely would be cancelled by the insurer for misrepresentation, making subsequent insurance much more expensive for them,” he added.

READ MORE: Why taxi drivers are so upset about car-for-hire apps

But Uber notes passengers are protected through $5 million of insurance on each ride.

The controversy does not end there.

Taxi companies believe UberX has an unfair pricing advantage.

“Taxis that are regulated and licensed…are not allowed to offer discount rates,” said Kristine Hubbard, operations manager of Beck Taxi.

“It’s a slap in the face for all of us. I think we’re looking to our regulator to look for answers,” she added.

Cook said it has “engaged the expertise of the City’s Legal department, and are reviewing every legal option available to us to address any potential breaches of law.”

Uber told Global News it hopes to engage with policymakers in an effort to create new laws surrounding ride-sharing.