DUNNVILLE — Veteran truck driver Joe Edwards needed a change of pace after 17 years driving across Canada and the US doing long-haul trips. That change came in the form of downsizing from his big rig to a Toyota Highlander with a vision of running his own taxi service called ‘On The GO With JOE Classy Cab Co’.
Based out of Dunnville, Edwards’ service was intended to fill a need for more transportation options in Haldimand County.
However, in his desire to find a line of work that could benefit his community, he overlooked a crucial element: the high price of insurance for beginner drivers in the taxi industry.
In a Facebook post, Edwards shared his story, noting that he was initially offered an annual insurance premium of $8,111 through his provider, which he paid in full at the time and opened his business shortly after. Just two weeks later, he got a call from his broker notifying him an error was made on his rate, and that the actual rate would be $16,477.
“Okay, I’ll dig deeper and pay the additional $2,200 and make monthly installments after that. It’ll be tough, but man up, get it done, you got this. If it was easy, everyone would do this,” said Edwards on his determination to continue his plans.
With $10,300 down and a monthly $740 payment plan, he went on with work, until learning shortly after that his policy did not allow him to make trips to key large metropolitan areas like Toronto and Hamilton.
In his post, Edwards noted that 50% of his revenue came from driving “our communities’ most vulnerable to their appointments in Hamilton, St. Catharines, Welland, Toronto,” along with trips to area airports.
However, to do so while properly insured, he found out in an email from his broker shared with The Press that coverage for one day of trips to the Toronto airport and two days of service to Hamilton per week would increase his annual premium to a whopping $44,354.
A separate email showed different rates and what they allowed Edwards to do. Adding St. Catharines, Port Colborne, Thorold, Welland, and smaller nearby towns resulted in a $26,337 premium, while adding Niagara Falls and Fort Erie to the mix hiked the rate further to $31,623.
Regarded as a new driver in a field of insurance deemed high risk, Edwards’ policy was underwritten and rates determined by Facility Association (FA), a non-profit association who work with insurance companies offering auto coverage.
Edwards questioned FA on why his 17-year clean record of professional driving experience did not lower the rate.
“How am I supposed to survive?” asked Edwards in his letter. “How is it that I’m paying almost $17,000/year for taxicab coverage (only Haldimand County), when I was paying $18,000/year in a $250,000 brand new 2022 Western Star, crossing into the USA every day and it’s in the most high-risk category?”
FA Vice-President of Communications Derek Tupling called the association the “insurer of last resort,” servicing clients who cannot find an insurance policy by ordinary means.
“Our rates are typically higher…. That’s how we operate,” he said. “We’re not just rolling the dice and taking a guess at it.… We use all the same types of algorithms that regular insurance companies do to determine rates that come up for specific risk.”
Some common risks for taxis include fatigue-related issues affecting reaction time and increased time on the road meaning increased chances for accidents. Tupling said if drivers maintain a clean record or show improvement over a 12–24-month period, that will eventually lead to a lower rate through a standard provider.
He said that currently FA writes policies for roughly 25-30% of all licensed taxi operators in the country. FA wants to see that market share drop to around 5%, with more taxis “being written in a standard market … at a lower premium than FA has to offer”.
He noted rate determinations change by year, and are often determined by a variety of factors, many of which are beyond anyone’s control, such as inflation.
Tupling mentioned a telematics program offered through FA that could generate a 15% discount on a driver like Edwards’ premium. To qualify, however, drivers must comply with the installation of a device in their vehicle to measure performance-related metrics, as well as participation in a coaching program.
As to why Edwards’ professional experience did not factor in his rate determination, Tupling explained, “For FA, the way we rate taxis in Ontario is based on how long the (taxi) vehicle has been owned.”
Rals Edgar of Dunnville, 77-years-old, is familiar with Edwards’ concerns.
“I’ve been dealing with this garbage since Covid,” said Edgar, who owns and operates Taxi 2000. While Edgar used to have employees and multiple cars on the road each night, today he is down to one cab with retirement looming.
“There’s no fleet coverage available for anybody anymore. Intact has bought out every company in the province,” said Edgar. “Every small business has been injured and people are losing their jobs over it.”
He claimed that in the nearly five years since the pandemic first hit, there are 240 less taxis on the road in Hamilton, while Haldimand is down from 28 to 14 taxis today.
He called the lack of insurance options “injurious to the financial health of the business, right across the country.”
He called Edwards’ high rate “mind-bending,” adding, “What’s left by the time you pay for the car, the fuel, the wear and tear? You’re working for less than minimum wage.”
He noted that his son was quoted $23,000 for his first year as a driver by Intact Insurance.
Edwards’ issues with his rate continue, with him notifying The Press on February 14 that following another exchange with his broker, his rate had increased again to $19,776.
Despite these challenges, he remains committed to pushing ahead.
“There should be no reason a veteran truck driver with over 1.4 million miles under his belt should be paying 20-30 times what an Uber driver with little to no driving experience pays in insurance. It’s really disgusting,” said Edwards. “Haldimand is crying for taxi service to transport country folk to the city, to appointments, to the doctors.”
He concluded, “It’s a shame.”
