Man, people really hate car insurance, right? But right now, cabbies have a reason to be more peeved than everyone else.
Alberta’s new Direct Compensation for Property Damage (DCPD) was launched on January 1, 2022. Under the DCPD, a driver’s insurer will pay for vehicle repairs after a crash where the driver is not at-fault.
Before the DCPD came into force, it was the at-fault driver’s insurer that would pay for repairs.
This basically saves the not at-fault driver from having to deal with someone else’s insurance company. This allows for claims and repairs to be made faster.
More importantly, the DCPD comes with some hefty insurance cost changes.
Owners of less expensive cars will see their cost of insurance decrease. But if you are driving around in a more expensive car, you could see your insurance rise by 5 percent.
To make matters worse, the DCPD doesn’t consider commercial insurance. The thing is, lots of businesses rely on commercial insurance to cover their vehicles. Are you dragging tools around to job sites? Delivering craft beer? Showing properties? You probably have a car for your business.
For taxi drivers, the car is your business.
The cab business is already down quite a bit because of the pandemic. With business far from booming, cab drivers are paying an extra $40 weekly in fees.
The worst part is, cab drivers already pay an absurd amount of money out of their pocket to the cab company that hires them. Fees for licence and administration cost cab drivers almost $2,000 every month. That doesn’t even get them a pension or paid time off.
Cab drivers also pay for their own gas and are still charged transaction fees as much as 2 percent for taxi companies like Chequered Yellow Cabs.
With the DCPD in effect, taxi companies are charging their drivers $2,500 for any crash where they are not at-fault.
If that doesn’t make sense to you, that’s because it doesn’t make sense.
That $2,500 covers the high deductible. That’s basically the exact amount the cab driver has to pay before insurance covers the rest.
Here’s the real gut puncher. If the cab driver is at-fault, they are looking at fees totalling $4,500.
If you are a cab driver in Alberta, the DCPD has created a real lose-lose situation.
Taxi companies have handed off the new insurance changes to their drivers, which has created even more out-of-pocket expenses.
Pair this with the fact some car drivers haven’t seen a pay increase in almost ten years, it’s no wonder that cab drivers are leaving the industry.
Good luck getting around.
