Long waits, high costs and less-than-satisfactory service are just some of the complaints with traditional taxi services that led to the proliferation of Uber and other ride-hire services in Australia and around the globe. These advance-booking companies are on the rise in Australia, but they are in a coverage grey area between car, driver and business insurance.

The rise of ride-hire services

UberX, the division of Uber where drivers use their own cars, has been immensely popular in Australia since it first launched in April 2014 in Sydney and Melbourne; it has expanded to the Gold Coast, Perth, Brisbane, Geelong and Canberra and has facilitated nearly 10 million rides according to Deloitte’s 2016 report, Economic effects of ridesharing in Australia.

Numerous customer benefits, particularly in the areas of cost, convenience and satisfaction, have played a key role in Uber’s popularity. The Deloitte report found that Uber users paid 20 per cent less and waited 3.3 minutes fewer than they would have with a taxi on average. Additionally, 80 per cent of Uber drivers have earned five-star ratings, the highest available.

The role of insurance

Not everyone is satisfied with Uber and other ride-hire services, particularly those in taxi-related industries. A chief complaint is that Uber has an unfair market advantage through insurance. Some critics argue that Uber drivers are not subject to the same premiums for compulsory third-party (CTP) insurance as taxis, as it is harder to identify an Uber car in an accident.

Uber driver are required to have a current CTP and third-party property insurance.


Uber, however, stresses that its drivers are more than adequately and appropriately covered; all are required to have a current CTP and third-party property insurance, while the company provides an additional contingency coverage of $20 million for injuries and damage to property.

Meanwhile, other insurers have signalled their willingness to work with Uber and other ride-hire drivers – including National Roads and Motorists’ Association (NRMA) Insurance, which offers coverage for UberX drivers in Queensland, NSW and ACT.

“NRMA Insurance is open to working collaboratively with government and road transport networks to develop appropriate insurance solutions for ridesharing activities,” said Tracy Green, executive general manager for NRMA Insurance.

Of course, all Uber drivers should notify their insurance providers that they are planning on using their car for ride-hire services. That way, the provider will have a full picture of the driver’s insurance needs. Uber Black drivers, for instance may require a taxi specialist policy to provide the right level of coverage.

Since ride-hire services are a relatively young industry, there is still much that must be figured out when it comes to insurance coverage for drivers. They are generally covered for drivers’ insurance, but where would they fall under business insurance needs? Are individual drivers eligible for business interruption cover? Time and testing of the market will tell.