Uber could protect from fake uninsured drivers using a ‘contingency motor policy’ says insurer

Uber could protect its passengers from uninsured fake drivers by investing in a ‘contingency motor policy’ according to insurance experts.

Last week Transport for London (TfL) announced that ride-hailing giants, Uber, would not receive a new private hire operator's licence in the capital.

One of the reasons given by the London regulator as to why the firm lost its licence, centres around a change to Uber’s systems, which allowed unauthorised drivers to upload their photos to other Uber driver accounts.

This allowed those drivers to pick up passengers as though they were the booked driver, which occurred in at least 14,000 trips - putting passenger safety and security at risk.

This also meant all those journeys recorded were uninsured and some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked by TfL. 

According to an insurance specialist within the taxi and private hire industry, passengers travelling with a fake Uber driver WOULD HAVE been able to claim compensation, if they were involved in an accident, be it via a long winded process.

A spokesperson from insurance specialists, Plan Insurance, said: “If the vehicle wasn’t insured at all (eg driver not insured and the vehicle not insured), then the MIB (Motor Insurance Bureau) would be involved. The claimants are likely to receive compensation. However the process would be more long winded than if the vehicle or driver had a policy in place.

“If the vehicle was insured but for the wrong driver, then the insurer of the vehicle has an obligation to pay any third-party injuries or damages. Then they could look to seek their monies back from the policyholder and/or the MIB compensation scheme."

And what if the passenger in the vehicle was unfortunate enough to be attacked by a fraudulent driver? Would they receive compensation?

Plan Insurance added: “There could be a criminal prosecution, of course, which would be dealt with by the courts. Any compensation would be arranged by the judicial system.”

So what more could Uber do to show the courts, and its customers, that they take safety concerns seriously?

Plan said via their online blog: “Uber would argue that they actually highlighted the issue to TfL themselves as part of their desire to demonstrate a new open and transparent mode of operating.

“However, that is unlikely to allay concerns regarding passenger safety resulting from the further risk of unlicensed and uninsured drivers.

“In terms of insurance, they could invest in a contingency motor policy that would be a fallback provision. It would come into force should an incident occur whilst a journey on their platform was taking place but for whatever reason the vehicle was uninsured. It would remove the need for the MIB to become involved.”