Taxi drivers rise up against mounting insurance costs

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Engine light on: Vehicle insurance rate review opens with confusion over expected results

A colourful and loud protest outside Confederation Building in St. John's Friday symbolized growing frustration about insurance costs in the Newfoundland and Labrador taxi industry.

Dozens of vehicles representing most of the cab companies in the city drove circuits around the seat of government while drivers leaned on their horns, sending a message to the Liberal government and Service NL Minister Sherry Gambin-Walsh.

Those in the industry say their insurance rates have skyrocketed over the past four years, and they face another 18.6 per cent increase on March 1, and a further 24 per cent later this year.

"Right now morale is really down because you're working for nothing," said car owner and 40-year industry veteran Gary Gushue.

The provincial association of taxi owners is calling on government to freeze insurance rates until a review of the system by the Public Utilities Board is completed.

They say people are being forced out of the industry, and are sending signals that even more drastic measures may follow if action is not taken by the government.

"There's rumour in the industry that perhaps the 17th of March you will be hard pressed to find a taxi in the City of St. John's," said association spokesman Doug McCarthy.

Gambin-Walsh, in a statement to CBC, said she is not aware of a pending increase in rates beyond the 18 per cent hike in March.

"My officials have been in touch with the CEO of the Facility Association who has assured them that there is no new application for an increase in premiums before the Public Utilities Board at this time," she stated.

"I appreciate the pressures facing the taxi industry, and I am hopeful that the auto insurance review, which is currently underway, will help us find solutions. 

High insurance payouts to blame

McCarthy said he was paying a yearly insurance premium of just under $2,000 five years ago. Last year he paid $6,500 and said he "operated at a loss."

Some drivers told stories of insurance rates of up to $15,000 for a single vehicle.

"Within five years, I don't see one broker like myself being at this industry," said Gushue.

"The only ones being able to handle it will be guys with the fleets of cars."

The taxi association blames the spike in premiums on insurance payouts as high as $40,000 for soft tissue injuries.

It wants a cap on settlements, similar to what exists in other provinces.

"We would hope with this review that's being undertaken now that the government will find ways to implement a better system in dealing with accident injuries," said McCarthy.

McCarthy estimates that the province's taxi industry employs roughly 4,000 people. He admitted that part of the problem is the poor driving record of some drivers, but he said that's slowly being addressed through a combination of training and the addition of technology.

"There are taxi drivers out there who should not be behind the wheel of a taxi, and with these new GPS systems that we're installing in the cars, we will weed them out," he said.

Gambin-Walsh, meanwhile, said taxi operators and government must work together to fix this problem, but said it will take time.

"Last fall we secured funding through the Department of Advanced Education, Skills and Labour for the St. John's Taxi Alliance to develop a human resource plan for the local taxi industry. We are also studying other initiatives that may help reduce insurance premiums for all drivers over the longer term," she said.