This move by UberCargo is not a new phenomenon. Particularly, the Hong Kong market has seen the success of peer-to-peer cargo delivery services of GoGoVan1 and Lalamove2. Outside of Hong Kong, Cargomatic has been connecting carriers and shippers in the areas of California and New York. Unlike Uber, Cargomatic's website has been upfront about their insurance policy coverage and liability limits.3
While it is not clear whether UberCargo will be coming to Toronto anytime soon, the rise of peer-to-peer cargo services is the way of the future. Much like the gap in regulation for UberX, there too appears to be a potential gap in Ontario's regulation for UberCargo-type services. Should UberCargo or like services arrive in Ontario, it is questionable whether they would fall within the carrier regulatory scheme currently in place.
The Regulation of the Carriage of Goods in Ontario
Typically, when a carrier is being contracted for the carriage of goods, a bill of lading or other document evidencing the contract for carriage is issued. This document denotes the parties involved and the content and terms of their contract. Historically, and still the case in common law, the liability of cargo carriers is onerous. If the cargo is damaged while in transit, carriers are held liable for all such damage or loss even where no negligence is demonstrated. Carriers may be excused from liability in narrow circumstances of acts of God, riots, strikes, latent defects, quarantines and war.
Because of this, legislation has been enacted by almost all provinces to provide protections to carriers and mitigate the effects of the common law arduous liability on the industry.
Specifically, the provinces created "Uniform Conditions of Carriage", to be attached to the bill of lading or contract of carriage.
In Ontario, the Highway Traffic Act (HTA)4 is the controlling legislation regarding commercial motor vehicles and contract of carriages. Pursuant to the HTA, the Carriage of Goods regulations were enacted to prescribe the information and terms to be included in every contract of carriage in Ontario.5 Specifically, "Uniform Conditions of Carriage" are deemed to be incorporated as terms and conditions of every contract of carriage to which the regulations apply.6
One of the key aspects of the Uniform Conditions is that it provides protection to carriers by way of limiting liability. Rather than being on the hook for the full extent of loss or damage, the Uniform Conditions operate to limit this liability for carriers. For example, a contract of carriage for general freight is limited to $4.41 per kilogram (or $2 per pound) per article lost or damaged for household goods if so elected on the issued bill of lading. If the value of the goods is less than the weight valuation, then it shall be the lesser amount. Moreover, if there is a declared value on the bill of lading, then the liability for the loss or damage cannot exceed the declared value.7
UberCargo Finds another Gap
...most UberCargo drivers could be driving their own personal vehicle that does not fit into the traditional sense of a commercial motor vehicle... |
As noted, the HTA and associated regulations govern commercial motor vehicles. The HTA defines a "commercial motor vehicle" as a motor vehicle having attached to it a truck or delivery body and includes an ambulance, a hearse, a casket wagon, a fire apparatus, a bus and a tractor used for hauling purposes on a highway.8 The regulation does not alter this definition but specifies that a public truck is included in such a definition.9
Given this description, a cargo van or other similar private vehicle operating as a peer-to-peer cargo delivery service with UberCargo may find itself falling outside the commercial motor vehicle definition. As with UberX, most UberCargo drivers could be driving their own personal vehicle that does not fit into the traditional sense of a commercial motor vehicle. Other cargo-sharing companies, such as Cargomatic, have teamed up with commercial carrier trucking companies in order to provide their service. However, UberCargo in Hong Kong has not specified whether its operations would only include commercial carriers or allow private drivers to sign up as drivers. Lalamove, UberCargo's rival in Hong Kong, appear to accept individuals driving vans or trucks as drivers.10
Moreover, the Carriage of Goods regulation lists categories of goods not covered by the regulations. Of note are "goods that are carried solely within a local municipality".11 Given that Uber predominantly provides service within a metropolitan area, a substantial portion of envisioned cargo deliveries would likely fall within this exception.
Much like the current encounters with UberX, difficulties therefore arise when trying to imagine how UberCargo would fit into the present regulatory scheme. Even if some of the deliveries were to span into a different city, defining UberCargo as a commercial motor vehicle may be an uphill battle. Surely, the company does not see itself as a commercial trucking service, but rather a convenient, peer-to-peer service.
If UberCargo is Left Outside...
Should UberCargo fall outside the scope of the regulatory regime, the carriers would not be afforded the limitation of liability provided by the Uniform Conditions. It is also not clear what terms and conditions of a contract of carriage with UberCargo would entail. This may open up UberCargo providers to the full extent of carrier liability experienced at common law, which, as mentioned, is onerous. Should goods being carried sustain loss or damage, the driver may be exposed to liability for the full amount.
Furthermore, the regulation mandates that each carrier of goods has liability cargo insurance sufficient to cover the loss or damage of the goods carried. UberCargo providers, or "partners" as Uber likes to call them, may only carry traditional auto liability insurance for their van. If they happen to use their van for business means, they may have a policy that encompasses some commercial use.
FSCO warned Uber drivers and passengers that traditional insurance policies were not drawn up with the new 'sharing' economy in mind... |
Unfortunately, traditional insurance policies don't typically envision the Uber model. In fact, in March of 2015, the Financial Services Commission of Ontario (FSCO) released an infographic on this very issue.12 FSCO warned Uber drivers and passengers that traditional insurance policies were not drawn up with the new 'sharing' economy in mind and that these policies therefore would likely leave both passengers and drivers wanting in terms of the breadth and scope of benefits provided in the event of a motor vehicle accident.
This is problematic for both the Uber partners and the users, as UberCargo users would not necessarily know whether the particular driver has sufficient coverage for carrier liability and Uber partners can unknowingly expose themselves to greater liability. Further, it is not clear whether UberCargo, like its ridesharing service, would respond by taking out an umbrella cargo liability policy. Even if UberCargo in Hong Kong does have such a policy, it is unlikely they would reveal it to the general public given the secrecy around their $5 million auto policy.
Uber's Current Insurance Coverage
While Uber does maintain a $5 million liability policy, it is not clear whether cargo liability insurance would be encompassed within Uber's secret mega-policy that appears to be the answer to everything. In City of Toronto v. Uber Canada Inc.13, the City of Toronto alleged that Uber did not have adequate insurance coverage to protect drivers or passengers. Uber responded to that particular allegation by claiming that it maintains insurance coverage of $5,000,000.00 for all rides that are arranged through their phone application.14 Uber unsuccessfully sought a sealing order on keeping the information on their umbrella policy confidential. In the affidavit filed with the court, the policy is described as including coverage liability for third parties for bodily injury and property damage that occur while a driver is on route to pick up a passenger who has requested a ride using the App and while transporting such a passenger to his/her destination.15 The affidavit further stated that the policy provides coverage in the event that the driver's own personal automobile policy has been maxed out or if there is no other coverage available for the incident.16
In several different venues Uber refers to the 'umbrella' policy described above, however typically in reference to the safety of Uber passengers. For instance on the Uber website, it states that "every ride on the UberX platform in Canada is backed by $5,000,000.00 of contingent auto liability insurance" and that "passengers, pedestrians, other drivers and the community at large can rest assured knowing that ridesharing partners are well covered by commercial auto insurance in addition to any insurance coverage maintained by the driver".17
In one interview, Ian Black, the general manager for Uber's Ontario operations was asked about the appropriate party to sue should there an accident. He responded, that "if you sue the driver, he'll be covered under his personal insurance. If that maxes out or doesn't cover the driver, our $5-million policy kicks in".18
After undergoing numerous attacks at various city councils in Canada, Uber Canada has recently partnered with Intact Financial Corp. to create insurance policies tailored to the ridesharing model to meet regulatory requirements. This is only in reaction to concerns over inadequate insurance coverage for the drivers and riders of the UberX service. Thus, should UberCargo or like platforms arrive in Ontario or other parts of Canada, it likely will similarly require efforts and pressure from regulators before the big question mark over carrier liability and associated insurance coverage issues could be resolved.
1 GoGoVan.
2 Lalamove
3 Cargomatic
4 Highway Traffic Act, R.S.O. 1990, c. H.8.
5 Carriage of Goods, O. Reg. 643/05.
6 Highway Traffic Act at s.191.0.1(1).
7 Carriage of Goods, at Schedule I.
8 HTA, s.1(1)
9 O.Reg., at s.1..
10 Lalamove - Easy Van Drivers FAQ
11 Ibid. at s.2.
12 FSCO - Ride Sharing Info
13 City of Toronto v. Uber Canada Inc., 2015 ONSC 1617.
14 Ibid., at para 4.
15 Ibid, at para. 20.
16 Ibid, at para. 21.
17 UberX Safety in Canada.
18 Toronto Life - Uber Toronto - Ian black.
