Insurance hikes driving cabbies out of business, Jiffy driver says

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Insurance hikes driving cabbies out of business, Jiffy driver says

A Jiffy Cabs operator says continued insurance hikes are driving him and his colleagues out of business — and the Newfoundland and Labrador government is responsible.

"As of the first of March, with the 25.6 per cent increase, my insurance has now gone up over the last four years 234 per cent," Doug McCarthy told The St. John's Morning Show. 

"It used to be with five cars you qualified for fleet insurance [and] now they've changed that to 10. A friend of mine has five vehicles. His insurance went from $22,000 to $45,000 — that's just in one year."

McCarthy said the Facility Association, an unincorporated non-profit made up of automobile insurers, has a monopoly on taxi insurance in the province and can set rates as high as it wants. 

Historically, the Facility Association has been a last resort for licensed, high-risk drivers who have been turned away by insurance companies. Its rates are far more expensive than the mainstream market. 

According to McCarthy, the Public Utilities Board has received an application from Facility for another 29.7 per cent increase to take effect in October.

'Let the province solve the problem'

"[The] provincial government created the problem. They're the ones that back in the early 2000s said, 'We're going to put all taxi drivers in this category and Facility will be the company to insure them.' So the problem was created by the province — let the province solve the problem," he said.

"Right now, for a brand-spanking-new taxi operator in this city, you're looking at in the neighbourhood of $10,000 to put your taxi on the road — just for car insurance." 

McCarthy considers cabs to be an essential service, both for those living in rural communities and for the city's tourism industry.

"Look at all those people who came into this city to attend the Brier. How did they get here? Through the airport. If there's no taxis at the airport, so much for your tourism," he said.

McCarthy and other taxi owners and operators in the region will gather at a meeting at 7 p.m. Monday at the Royal Canadian Legion on The Boulevard in St. John's.