Ride Sharing and Car Insurance in Hong Kong

On March 1st 2021 the South China Morning Post reported that Uber is being sued over the company’s liability towards an accident in April 2018 which resulted in one fatality. In the suit the plaintiff states that Uber should be held “vicariously liable” for the accident in question, and is seeking an unspecified amount of damages as a result of “personal injuries, loss, damage, expense… arising out of negligent driving as an Uber driver.”

Since launching in the city, Uber has operated in a legal grey area. Uber Drivers, by and large, have not obtained any hire car permits which would otherwise be required for similar business operations. In fact, Uber considers all its drivers in Hong Kong to be “independent contractors” and the Hong Kong government views all ride-sharing and ride-hailing applications other than those designed for red, green, and blue taxis to be illegal.

In November 2020 Chief Executive Carrie Lam announced that there were no plans to legalize Uber’s ride-sharing activities in Hong Kong, and that local authorities were looking at doubling the fine of individuals conducting illegal hire-car services, and lengthening the suspension of their vehicle license.

Unlike other locations in which Uber is operating there is very little clarity with regards to the law and insurance when accidents happen and lives are lost. So, what exactly are the protections you can expect while riding in an Uber?

Hire Car Registration and Permits in Hong Kong

In order to register a vehicle to operate on a public road in Hong Kong you must hold a valid car insurance policy. Without a car insurance policy, you will be unable to register the vehicle and will be liable to fines and/or imprisonment.

We discuss the ins-and-outs of car insurance in our article What Car Insurance is Right For You? If you would like additional information about your car insurance options, or the procedures for registering a car in Hong Kong, please click the link.

In relation to Uber, however, it is important to note that there is an additional factor which is supposed to apply to cars and taxis – the owner or operator of the vehicle must also obtain a Hire Car Permit in order to satisfy the legal requirements.

While an Uber driver will have obtained car insurance on their vehicle in order to have it registered to drive on Hong Kong roads, very few of these drivers have obtained a hire car permit.

This is where a problem starts to emerge, especially as an economy has emerged inside the Uber community where drivers are leasing cars to other drivers. This is creating more of a gap between Uber and the drivers, and less oversight when it comes to properly regulating those drivers and ensuring that the laws of Hong Kong’s roads are properly followed.

Uber, Insurance and you

While statements have been made by various legal experts regarding the status of insurance coverage held by Uber drivers, the unfortunate truth is that this is still very much an unknown, and an uncertainty. Uber has purchased 3rd Party Motor Vehicle Insurance top up protection for all drivers contacted to the company, but this does not change the fact that, under Hong Kong law, Uber’s drivers have not been permitted to conduct their ride-sharing activities.

This is extremely important as private car insurance policies in Hong Kong generally have a specific exclusion in relation to using the car for commercial activities unless otherwise specified by the policy. We recently discussed the issue of Exclusions on various types of insurance policy, and how they impact you, but the simplest explanation here is that if a claim is caused by an exclusion, then the claim will not be covered under the plan.

Taking money for driving people in your private car, in most cases in Hong Kong, will void your insurance. It really is that simple under the current regulatory framework. Without any insurance coverage, you’re not going to be protected in an accident and a case could actually be made by the government that your vehicle was improperly licensed and being operated illegally.

If you are involved in an accident in this case, where your insurance is non-operable, you are going to be personally liable for damages. In the case of the suit being brought in the original SCMP article we mentioned, this is exactly what is happening; the plaintiff, in addition to suing Uber, is also suing the estate of the Uber driver who died as a result of the accident.

Personal Insurance when you hail an Uber

The plaintiff currently suing Uber was not driving a car, and was not riding in the Uber, she was a passenger in a taxi that was involved in the collision.

So, what are your rights and protections as someone who is a bystander in an Uber accident?

Ordinarily Third-Party insurance would apply to everyone in an accident, but if the insurance is not valid because the Uber driver has not properly permitted their vehicle and because the insurance is void in a commercial situation, what protections do you have?

The unfortunate answer is “very little.”

If you’re injured as a result of an Uber accident where you are not the driver your only real recourse under the current legal framework is to sue Uber and the driver at fault for your damages. Any injuries you experience, or any healthcare you may require as a result of the accident are likely going to have to come from your own finances.

Unlike Hong Kong Taxi’s which are covered for Car-Hire activities and have commercial vehicle insurance policies with higher minimum levels of protection, with Uber you are covered under basic Third Party protection which may not be applicable to the individual driver you have chosen to ride with. Simply put, and unexpectedly, getting an Uber is a risk.

Protecting Your Person in Hong Kong

The best way to protect yourself from risks of injury or death in Hong Kong is with comprehensive Health Insurance and Life Insurance protection.

While this does not satisfy the potential liability that Uber and its Drivers may hold towards you in an accident, having Life and Health Insurance coverage ensures that should a worst-case situation occur, you and your loved ones will have the support and access to care you require – even if you aren’t in Hong Kong. Under the current legal and regulatory framework for Uber in Hong Kong, if you are the victim of an accident caused by an Uber driver, it may take a long time for you to recover any compensation – if you are able to do so at all.

As such, the most sensible course of action is to ensure that you have the protection you need, before you need it. Hong Kong Health Insurance will help you recover and get back on your feet in the world’s second most expensive healthcare market, while Life Insurance will ensure that your family is able to access critical finances at the time, they need it most following a deadly accident.

CCW Global is not suggesting that Uber is a dangerous or poorly regulated company, nor are we suggesting that Uber be banned. In fact, Uber as a transportation alternative should be welcomed in Hong Kong, where dissatisfaction with Taxi services is at an all time high. However, the current legal and regulatory framework which Uber currently operates under leaves customers and drivers exposed, both to massive costs and legal action.

This is not an ideal situation, and causes a large amount of confusion for everyone concerned. Until further regulations are introduced, and a legislative push is made to establish Uber’s legality in the market, the confusion will continue. The best thing you can do for now, is ensure that you have the protection you need, should you ever need it.