Car-sharing a leased vehicle? Beware: You’re playing with fire
This get-rich-scheme is bound to fail, leaving you in the lurch, writes Lorraine Sommerfeld.
“In December 2015, it was possible to lease a Chevy Cruze for $18/month with $0 down. There was no catch — it was real and I added multiple Chevy Cruzes to my fleet.” — from a website instructing people how to get rich by sharing their cars.
This would be awesome advice, except you can’t drive for programs like Uber or rent out your car with services like Turo if you have a leased car.
Turo, a car-share program that launched in Canada a few weeks ago (formerly known as RelayRides), has been working its way through the U.S., much like Uber, though it provides a different service. Uber lets you summon a ride with a tap on your phone; it cuts out taxis and airport limos. Turo lets you rent a private car for a day or a week and drive yourself; it cuts out car rental agencies. Both services thrive on the whole “who-needs-rules?” policy to celebrate and support the “new” economy that so many are embracing. Foolishly.
I’ve used this space in the past to draw attention to the fact that many Uber drivers have been operating without insurance; your normal personal auto policy does not permit you to drive commercially. Taking money — and failing to inform your insurer that you are doing this — will retroactively void that policy in most instances.
The problem? Commercial policies are incredibly expensive in comparison to personal ones; it’s why a cab ride costs more. Uber doesn’t care, because Uber’s guidelines for drivers are full of words like “make sure you notify your insurer.” Your insurance is not its problem. Uber has a policy that covers only itself.
Aviva Canada recently introduced a bridge policy to allow its customers to drive up to 20 hours per week for a ride-share program and be covered, for an increase in their rates. Several brokers I’ve spoken to have not been inundated with calls.
Canadian jurisdictions are struggling with how to adapt to a new world order. Do they demolish their existing rules because companies like Uber don’t care anyway? Some are trying to do some stepchild version, like Toronto letting the traditional cab industry do “surge” pricing while requiring Uber drivers to submit to the city a copy of their driver’s licence, vehicle inspection and proof of appropriate insurance. Alberta requires carshare drivers to have a professional Class 4 licence, as well as a police check. Mississauga recently outlawed Uber, period.
I’m not against change, and these business models have certainly been embraced by users. I am against lawless, unregulated, undocumented and no doubt tax-evading schemes masquerading as the wave of the future. I am mostly against commercial interests — Uber, Turo — dodging and weaving around the law. And I’m against fuzzily worded instructions to those eager to make a few bucks.