legal implication of using my car for Uber / Grab

The economy is getting soft and many people are looking at getting part-time job to help subsiding the raising cost of living.  Ride-sharing application such as Uber and Grab seems attractive to many, since most of these middle-income group owns a car, and the flexibility of working after work or in weekends appeals to many.

Many people sign-up for Uber or Grab, using their private vehicle to pick up passenger could be running into a risk without knowing it.  Uber or Grab drivers, are private individuals, driving their private vehicle insured under Private Car without Goods.

The insurance coverage provided are meant for private car use, and not intended for commercial purposes.  If your car is meant for commercial uses, such as Taxi, or Car Rental, the insurance coverage would be difference.

Thus, using your private car for commercial purposes would first void your car insurance policy.  In an event of a claim, your insurance company may not entertain your claims.

Breaching your insurance contract would see you taking the risk by yourself,  because the car would have been used for a purpose not covered under the insurance policy.  This include third party liability claim.

Accordingly to PIAM, ride-sharing drivers may also risk facing lawsuits from insurers.

“Under the law, insurers may find themselves having to pay for bodily injury claims to other third parties (TPBI claim), excluding the driver and passenger.

“However, the insurer will have a cause for action against the owner and/or driver, and will recover the full TPBI claim settlement and costs incurred from the owner and driver,” said PIAM

Insurance is all about transferring risk, but in this case, using your private vehicle for commercial activity will void your insurance coverage, so you are putting yourself in greater risk for a small return.