Drivers using their own vehicles for commercial purposes via ride-sharing operations such as Uber should pay increased compulsory third party (CTP) premiums, according to the Insurance Council of Australia (ICA).

In a submission to the ACT’s taxi industry innovation review, CEO Rob Whelan says ICA supports “competitive neutrality” and expects taxi and ride-sharing services to be subject to the same requirements.

The current CTP premium for a taxi in the ACT is more than $9500, compared with a maximum of $644 for a class-one passenger vehicle (business use).

“Much as taxis carry a higher risk than private vehicle usage, vehicles that provide ride-sharing services may also attract a higher claims frequency and higher claims cost than vehicles that are only used privately,” Mr Whelan says.

“ICA’s members that privately underwrite CTP insurance would expect ride-sharing vehicles to be separately classified for the purposes of risk rating. This would ensure that anyone providing ride-sharing services was paying a CTP premium appropriate for the related risk, to ensure the class is fully funded.”

If ride-sharing vehicles remain class-one passenger vehicles, this could lead to higher premiums across the board, creating “significant cross-subsidy” in their favour, ICA warns.

The ACT review examines the potential use of new technologies in an evolving industry.

The consultation period has now closed and the ACT Government will consider possible reforms over the next few months.

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