Legal risks loom for Cayman’s transportation apps

Drivers using ride-share and carpooling apps in Cayman to make extra cash could be exposing themselves to serious legal and immigration risk, an immigration lawyer has warned.

Alastair David, a partner at HSM law firm, said expatriates driving passengers for money without a specific work permit are breaking the law, regardless of how the apps describe themselves.

He was speaking following the publication of a Compass investigation into ride-share platforms, operating in a legal grey area, that have moved to fill demand for affordable late night transport.

Island:GO, which operates in Cayman and Bermuda, is the most popular, marketing itself on social media as a platform for reliable late-night transport that has more than 2,800 recurring users.

A second, Caymanian-owned, ride-share app, Drift, has also been set up. It differs from Island:GO in that it asks for a fuel contribution rather than a fare. Both companies present themselves as tech businesses rather than public-transport operators, which would require different licensing.

But David warns that, however the apps are described, drivers who don’t have the right work permit permissions are taking a huge risk.

“If you are driving someone for money, as fas as I can see, you are gainfully employed,” he said.

“You need permission to do that if you are an expatriate. If you don’t have it, you’re breaking the law.”

He said expatriates taking on ride-share driving as a side activity could be putting their right to remain in Cayman at risk, even if payments are described as fuel contributions rather than fares.

Who has responsibility?

While some app operators argue they are merely technology platforms connecting private individuals, David said international case law suggests courts often look beyond such characterisations.

There are potential accountability issues for the business, as well as individual drivers, with courts in other jurisdictions examining whether drivers are technically self-employed or working under contract to the platform.

“There’s been a huge amount of case law coming out of Europe, the UK and America in relation to Uber,” David said.

While the distinction has implications for the business’ legal accountability, David is unequivocal that drivers still have personal responsibility to ensure they are not operating outside the terms of their legal work permit.

Insurance exposure

Insurance risks add another layer of concern.

Greg Miller, a claims manager at the government-owned CINICO insurance company, has previously warned that drivers carrying passengers without the correct commercial insurance could be left personally liable following an accident.

“Anytime you get into a vehicle that represents itself as a public transportation provider, and they’re not properly licensed for that, you’re putting yourself at risk,” Miller said. “In most cases, there won’t be any coverage.”

In such instances, passengers injured in an accident could pursue drivers directly for medical costs, loss of earnings and other damages.

Miller said that even drivers who declare ride-share activity to their insurer would still need the correct business licence and registration to maintain valid coverage.

Public transport law

Government officials have also pointed to the Public Transport Act, which restricts carrying passengers “for hire or reward” to licensed public passenger vehicles driven by permit holders. Driving without a permit is a criminal offence, carrying penalties of up to $5,000 or six months’ imprisonment.

Officials said private motorists accepting payment through apps fall outside Cayman’s regulatory and safety framework, leaving passengers exposed in the event of a serious incident.

Island:Go says it is a technology platform that allows private individuals to make pre-arranged transport arrangements. A representative said the company is operating a “community safety pilot” in response to shortages of late-night transport and claimed the platform’s growth coincides with hours associated with higher drink-driving risk.

“With sustained adoption, we believe Cayman could eliminate drink-driving incidents completely,” the representative said.

The owners of the Drift app say it is a Cayman-built tech platform that is simply a more efficient equivalent of the rideshare groups that have popped up on Facebook and WhatsApp over the years. They argue that it is necessary for safety and convenience in Cayman and have urged government to legitimise and properly regulate the industry.

“We’ve done our homework and we’re committed to staying within the law. We know there’s a grey area, but at its core, Drift is simply a tech platform that connects people who need a ride with people already on the road,” they said.