Digital technology has given rise to new business models like Uber and Airbnb. But unlike traditional taxi companies and hotel chains, which are subject to workplace-safety laws, these new kids on the block have largely evaded the regulatory framework. How can legislation play catch-up and bridge the safety gap?
Ride-sharing companies like Uber and Lyft will soon give taxi companies in British Columbia a run for their money. The provincial government is introducing a series of improvements to make the taxi industry more competitive, as ride-sharing services will be allowed to operate in the province by the end of this year.
“British Columbians have told us that they want ridesharing services, and we are moving forward to make it happen,” Todd Stone, the province’s Minister of Transportation and Infrastructure, said in a statement on March 7.
Peter Fassbender, the B.C. Minister of Community, Sport and Cultural Development and Minister Responsible for TransLink, says that conversations with taxi companies and drivers over the past year have indicated a need to ensure fairness so that they can compete effectively with ride-sharing providers. “This is why we have worked so hard to develop these measures,” he says.
British Columbia’s move in paving the way for conventional cab companies to compete on a more level playing field with ride-sharing services speaks to a changing business landscape, brought about by advancing communications technology. The emergence of the sharing economy — in which private individuals share assets or services for free or a fee, typically via the Internet — is relatively new. Also known as the access economy, since consumers are paying to access someone else’s goods or services for a particular period of time, regulators, industry and stakeholders from the affected sectors are still trying to get a handle on the implications that these types of economic activities have on occupational health and safety.
There have been frequent reports of Uber drivers assaulting passengers, but drivers themselves also face immense risk. Statistics Canada has placed taxi drivers alongside police officers as having the highest rates of being killed as a result of their occupation. Driving a taxi is a high-risk profession, and the hazards range from verbal abuse to physical attacks that have proven fatal in some cases.
Consider the unprovoked stabbing of a Beck taxi driver by a passenger in Toronto on February 21, or 31-year-old Iqbal Singh Sharma, a cab driver with Regina Co-Op, who was stabbed multiple times in the neck, throat and chest by a male passenger last November.
“You have to understand that the drivers are alone in the vehicle with the individual,” says Marc André Way, president of the Canadian Taxi Association in Ottawa. Although there have been a couple of incidents in which drivers have been killed or badly hurt, Way says he does not believe that there is an increase in those types of assaults, as electronic payments have become the norm. “Drivers aren’t carrying as much cash as they used to,” he notes.
The Canadian Centre for Occupational Health and Safety in Hamilton, Ontario lists various factors that hike the risk of workplace violence, many of which apply to cab drivers: working with the public; handling money; providing a service; working alone; and having a mobile workplace that may take drivers to geographic locations like bars and isolated buildings or structures, where they are at higher risk of being victims of violent crime.
There is also the risk of road accidents. A driver’s personal automobile insurance policy may not cover collisions that occur when the vehicle is used to ferry paying passengers, and workers’ compensation does not apply if a driver is injured while operating a private taxi service.
Online-platform-based economic activities connect workers and consumers to a range of activities beyond car or ride provision and home sharing, as exemplified by Uber and Airbnb. According to “Sharing economy” or On-Demand Service Economy?, a survey of workers and consumers in the Greater Toronto Area that the Canadian Centre for Policy Alternatives (CCPA) released in April, other manifestations of the sharing economy include Cleanify (cleaning services mediated through online platforms), Doordash (app-facilitated food delivery), BlancRide (carpooling through mobile app), TaskRabbit (a web platform matching people who need chores done with freelance labour), Rover (an app that matches drivers with unused parking spaces) and Hoffice (the use of underutilized home spaces as offices).
From an oh&s perspective, the sharing economy presents a conundrum by changing the employer-employee model.
Uber and Lyft position themselves as ride-matching services — not transportation companies — and drivers are independent contractors rather than employees. According to a disclaimer in Lyft’s terms of service listed on its website, the company is not a transportation carrier or a transportation-services provider, but a platform that connects a rider to a driver. “We have no control over the quality or safety of the transportation that occurs as a result of the services,” Lyft’s terms of service state.
Uber’s terms and conditions adopt a similar position: “Uber does not provide transportation or logistics services or function as a transportation carrier, and that all such transportation of logistics services are provided by independent third-party contractors who are not employed by Uber or any of its affiliates.”
But not everyone agrees that such disclaimers absolve ride-sharing companies of their due responsibility towards worker and consumer safety. Norm Keith, partner with Toronto law firm Fasken Martineau DuMoulin LLP, believes that there is no occupational-safety exemption for companies like Uber.
“Anytime you have a new disruptive technology or idea, there is a little bit of uncertainty as to whether current laws apply. But the health and safety legislation in Ontario — and certainly across Canada — focuses on the relationship between a worker and workplace and who is the employer,” Keith says, explaining that employer obligations are not necessarily predicated on an employment relationship or contract. “If there is any type of contractual relationship between Uber and its drivers, then I think they could be held responsible as an employer under the Occupational Health and Safety Act, even though they don’t have any traditional or common-law employment relationship.”
Trent Bancarz, public-affairs officer with the Alberta Ministry of Labour in Edmonton, agrees, pointing to a provincial regulation for Uber that came into effect last July 1, covering such areas as the need for drivers to have a certain level of licence and insurance coverage.
“The position we have adopted is that oh&s laws apply to Uber, Uber drivers and Airbnb folks,” Bancarz says. As soon as an Uber driver turns to a networking device to catch a fare, “your vehicle turns into a workplace, because you are providing a ride-for-hire. It is considered to be subject to oh&s laws.”
Upping the ante
As in British Columbia, the Alberta government implemented a regulatory framework that outlines rules and guidelines for Transportation Network Companies (TNCs) that ferry passengers on July 1, 2016. Some municipalities also have rules for TNCs using vehicle-for-hire bylaws. To operate legally, TNCs must comply with provincial requirements and any applicable bylaws in the communities in which they provide services.
The TNC’s requirements cover areas relating to insurance, licencing and police checks. Drivers of ride-for-hire services must have a Class 1, 2 or 4 operator’s licence, and a police information check must be obtained from the local law-enforcement agency in the driver’s city or town of residence. They also need to provide proof of insurance coverage that specifically covers driving a transportation network automobile for a TNC, according to the Alberta government website.
Before the above measures to tighten regulatory oversight on ride-sharing services were announced, Alberta’s Superintendent of Insurance issued an advisory notice on ride-sharing services and the insurance risk they pose in the summer of 2015, after his office reviewed Uber’s insurance policies and found issues with regulatory compliance.
In a statement issued on July 27, 2015, the Ministry cautioned that drivers using Uber’s ride-sharing services likely believed that Uber’s supplemental insurance provided the necessary coverage, but that was not necessarily the case.
“Albertans are at risk of not having access to insurance protection and accident benefits under Alberta law if using Uber’s ride-sharing services and potentially other ride-sharing services as well,” the statement warned.
As British Columbia gears up for ride-sharing services and the intensified competition on the horizon, the province’s taxi industry is anticipating a swath of improvements that would boost its competitiveness.
According to a statement from British Columbia’s Ministry of Transportation and Infrastructure dated March 7, the province will invest up to $1 million to help the taxi industry develop an app with the capability of shared dispatch, so that members of the public can hail and pay for a taxi with a Smartphone in the same way that they would for a ridesharing service. The Insurance Corporation of British Columbia will invest up to $3.5 million to install crash-avoidance technology in all taxis, streamline the claims process and work with the cab industry to make their insurance more flexible and cost-effective. Depending on the number of kilometres driven, these savings could hover in the range of 25 per cent.
Other changes include working with municipal governments and the taxi industry to remove red tape in the system, retain the exclusive rights of taxis to be hired by phone, at a taxi stand or flagged down at the curb and address the current shortage of cabs to provide more choice, accessibility and opportunity for both consumers and drivers. The province will also work with municipalities and stakeholders to allow all drivers, including taxi operators, the same access to provide services across municipal boundaries.
The same safety standards will also apply to both taxis and ride-sharing providers. Class 4 licences will be phased out for taxi drivers. Taxi and ride-sharing companies will be responsible for maintaining records to prove that all drivers have unrestricted driver’s licences, are at least 19 years old and have passed criminal-record and safe-driving record checks and ensure that vehicles have passed regular mechanical inspections.
It advised vehicle owners and drivers offering ride-sharing services to contact their insurance brokers, agents or companies to ensure adequate coverage for themselves and for the safety of others.
Ontario insurers and regulators have issued a similar warning. According to a report, Harnessing the Power of the Sharing Economy, that the Ontario Chamber of Commerce (OCC) released in 2015, a standard automobile policy in Ontario does not cover a driver when the vehicle is used as a taxi. While Uber has responded to the concerns of underinsurance by providing contingent insurance to cover drivers while transporting passengers, regulations and insurers have indicated that they cannot be certain about the extent to which Uber’s insurance policy protects drivers, as the ride-sharing company has not shared its policy publicly.
Like cabbies, hotel operators are feeling the impact of the sharing economy. Tony Elenis, president and chief executive officer of the Ontario Restaurant Hotel and Motel Association (ORHMA) in Mississauga, Ontario, points to the inequity between traditional hotel operators and their online-platform-enabled counterparts.
“We employ people, contribute taxes and we follow a massive amount of regulations from all three levels of government,” Elenis says, referring to legislation such as the Innkeepers Act, which mandates liability insurance, and the Hotel Registration of Guests Act, which requires all individuals staying in a hotel to be registered.
“There is none of that in this sharing economy,” he notes. “If you are not registered, how does the fire department or authorities know what is going on when an emergency arises? Human trafficking is another issue; there are rentals being used for that now operating under the radar screen.”
Elenis clarifies that it is not the mom-and-pop operators, such as homeowners who rent out their abodes, that are the crux of the problem. “We are finding from independent reports that close to 40 per cent of Airbnb is commercialization, which is defined as the owner who owns two or more properties, and that is an issue.”
The situation is even more dire in downtown Toronto, where as many as 23 per cent of Airbnb operators own three or more properties.
The ORHMA participated in several meetings, including one with the Ministry of Finance and the other with Toronto’s Executive Council, on the emerging accommodation-sharing economy. In the deputation that Elenis made to Toronto’s Executive Council on October 26, 2016, the ORHMA challenged the commercialization and operation of multiple properties as an underground economy business.
“How can short-term rentals not observe health and safety rules while an extremely regulated hotel industry embraces health and safety for employees and guests as a top priority through rigorous staff education and training?” the deputation asks, citing statistics from the CCPA indicating that shared accommodation represents the minority of Airbnb rentals in Toronto. A whopping 83 per cent of rentals were for entire homes, with 35 per cent rented by hosts with multiple properties.
The deputation also challenges the term “sharing economy”, defining home sharing as a practice of sharing one’s primary residence. “If it is a secondary residence or a commercial property being rented, it is no longer considered home sharing. Related to this is the maximum number of nights per year that a space is rented out.”
Taxi drivers face a similar situation. According to a report from the Mowat Centre, a public-policy think tank with the University of Toronto, taxi drivers in Toronto are subject to roughly 40 pages of licencing requirements, including mandatory training, a minimum number of work hours to be driven per month, the precise number of stickers related to cyclist safety that must appear inside a cab and a limit on the ages of taxis. Similarly, Ontario’s hotel and motel industry is governed by 33 pieces of legislation.
Pros and cons
Among the pull factors that sharing-economy businesses offer are low start-up costs, independence and flexibility. Car owners can use their existing vehicles to earn some cash, while homeowners can rent out their homes to help pay off the mortgage, essentially enabling them to become microentrepreneurs. But perks like independence and flexibility can cut both ways.
While a traditional company provides a support system in the form of a management team and local office, job and safety training, unionization in some cases and licencing requirements that ensure the protection of both the service provider and consumers using that service, none of these apply to sharing-economy workers, who are regarded as contractors or operate independently.
Take taxi drivers as an example. “With traditional companies, if you start from scratch, there is the management team that is local, there is the office that is local, there is a relationship between the dispatcher and the driver that exists,” Way illustrates. A taxi driver can liaise with a dispatcher at any time to get support in the event of an altercation, and a dispatcher can assist by alerting police or other drivers to render assistance to the driver in distress.
“You don’t see that on the other side,” Way says in reference to ride-sharing companies. “They are really just an electronic platform that is circumventing all of the traditional ways of dealing with taxi drivers which are beneficial to the taxi driver,” he adds. “You don’t have that support; you don’t have that relationship with the company. You are taking a chance.”
Licencing requirements provide taxi drivers another layer of protection. Not only do cab drivers and their vehicles have to be licenced with the municipalities in which they operate; each dispatch office also has to be licenced with the municipality and provide a description of the service that it offers.
“There are quite a few steps that ensure it is the proper car with the proper driver being assigned to the proper fare,” Way says. There are also levels of accountability within the companies, such as keeping logs of dispatch work assigned to drivers and the calls received, “so that in the event something happens, we can react very quickly.”
Add onto that the job and safety training that taxi companies provide for their drivers. “We train our drivers not to argue with someone. If it is a robbery, hand it over and don’t get into an altercation. In our training, we also educate them not to be lured out of the car in an area where you are not sure what is going to happen,” Way elaborates.
He adds that many taxi drivers are also unionized. “We take great pride in taking care of our drivers.”
In the works
The CCPA survey may shed some light on the workplace-safety challenges that the sharing economy presents. Of the 2,304 respondents surveyed, 20 per cent said dealing with the company that owns the platform is an issue. The survey describes the sharing economy as “one of the most precarious labour markets in the Greater Toronto Area” and that workers in this sector are considered independent contractors who are denied protections like minimum wage and overtime pay, which the Employment Standards Act provides. “The largest majority across all categories believe there is a need for more health and safety regulation (78 per cent), followed by business responsibilities (72 per cent) and worker protection (65 per cent),” the survey concludes.
Efforts to tackle these challenges are underway in Ontario. The OCC, in partnership with PricewaterhouseCoopers and CGI — a global IT consulting firm headquartered in Montreal — convened a forum on May 28, 2015 to discuss how to approach the regulatory challenges of the sharing economy. Among the recommendations was establishing a cross-jurisdictional taskforce with representation from government, thought leaders and industry to identify how to harness the opportunity of the sharing economy and the government’s role in addressing the challenges presented by this economy.
Since 2015, the Ontario government has been reviewing the changing nature of the workplace. According to information from the Ontario Ministry of Labour’s website as of February, an interim report has been released with a range of options to amend Ontario’s Labour Relations Act, 1995 and Employment Standards Act, 2000 to protect workers while supporting business in today’s economy. The review’s Special Advisors, Michael Mitchell and former Justice John Murray, are preparing a final report and recommendations.
While technological advances can be disruptive, they can also be harbingers of change. “Many of the current laws and regulations affecting industry were drafted before the rise of the digital technology, and as such, has become outdated,” the OCC report states. “The growth of the sharing economy should be used as a catalyst to create new ways of looking at regulatory regimes as a whole.”
For workers in the sharing economy, these changes might just be what is needed to make their workplaces safer.
Jean Lian is the editor of OHS Canada. (With files from Toronto writer Tony Palermo.)