EXCLUSIVE: NRMA offers insurance to Uber drivers
NRMA Insurance is offering cover for drivers of ride-sharing service UberX, despite the fact that the practice has been declared illegal in each Australian state and territory.
UberX allows car-owners to pick up passengers and transport them for a fee in their own vehicles.
This system means that drivers could be exposing themselves to substantial financial loss, as insurance policies will not cover illegal activities.
Blair Davies, CEO of the Australian Taxi Association (ATA), said: “In Australia you cannot insure for illegal activities so there is a huge risk that UberX drivers and passengers are potentially faced with and they could be exposed to litigation.
“UberX is essentially operating as a taxi service and so it is technically subject to the same law, but it doesn’t comply with the same regulations."
He added that taking an UberX involves a higher risk of accident because the drivers do not have to go through the same process as taxi drivers.
An NRMA Insurance spokesperson said their company offers 'cover for customers who advise they occasionally use their own cars as UberX vehicles'.
Uber driver John Scorsezy, 53, said he had working for the company for six months.
He said he wouldn’t have participated in the service if he knew he wouldn’t be covered by insurance.
“I had insurance with NRMA and from what I understood I was covered if a collision was to happen on the job.”
According to NRMA, there is no specific ‘UberX’ insurance cover but when you apply for insurance as an UberX driver you must claim it under ‘Special Occasion’ and say the use is for ‘business purposes’.
Mr Davies called for NRMA need to clarify their terms and conditions.
He said: "NRMA need to clarify what they mean by occasional use.
“Uber says that an average driver is doing about 20 hours per week, so NRMA need to define whether that exceeds the limit of their policy.
“It is misleading to policyholders, because if infrequent use only means every odd month, then they are not really covering drivers."
Last year, a NSW transport spokesperson said 'the law is clear, if a NSW driver is taking paying members of the public as passengers, the driver and vehicle must operate in accordance with the Passenger Transport Act.”
They went on to warn that a person who carries on a public passenger service in breach of the Act might face prosecution and fines of up to $110,000.
But Mr Scorsezy said that he went through a long screening process in order to be hired as a driver and it culminated with a face-to-face interview.
“It wasn’t a quick process; you have to have a clean driving record, go through criminal background checks, numerous vehicle checks and fill out all the paperwork.”
Although Uber has come under fire from regulators and the taxi industry, it is in early talks to raise a new round of funding that could value the company at over $60 billion ($US50 billion).
This funding could leave the start-up as the most valuable in history putting it in the same league as Facebook.
Mr Scorsezy said becoming an Uber driver is one of the best things he has done.
“The cab drivers have had it really good for years, because that was the only option, now we are giving people another option.
“When I went in for the face-to-face interview I saw people there who were applying to become an Uber driver in their taxi driver uniform.
“That showed me that Uber must be a good system.
“For me it was a great experience, it was really enjoyable and I’ve met a lot of great people.”
An NRMA spokesperson said they understand Uber is relatively new, and is in talks with the government.
“We note that this is a relatively new way for people to use their vehicles and understand that Uber is in conversations with Government around the legal status of its service and potential regulation to ensure the safety of passengers and drivers.”
