Uber's intention to operate illegally on the outskirts of Edmonton's city limits came as a surprise to Transportation Minister Brian Mason.

"Is that what they've said? That's very interesting," Mason said when questioned about Uber's plans to continue operations in outlying communities, including St. Albert.

"That's a very interesting proposition. I had not been aware that Uber was going to try and deliberately operate against the law. That concerns me a great deal and we'll be having some conversations with our officials."

Uber app

Uber halted operations in Edmonton early Tuesday morning, after failing to garner provincial approval for its driver insurance policy. (Andrew Harrer/Bloomberg )

Mason said insurance delays, which have halted company operations Edmonton, apply province-wide.

"I'm concerned that Uber would say that they're going to continue to operate illegally," Mason said during a transit announcement in Edmonton on Tuesday morning.

"That doesn't show the corporate responsibility that we would expect from the companies that want to operate in our province."

Uber would need a business license, commercial insurance and Class 4 driver licenses to operate legally within St. Albert.

St. Albert Mayor Nolan Crouse said he thinks the city needs Uber because cab service is unreliable. Even so, he said local bylaw officers will ticket Uber drivers discovered in St. Albert.

"We're not going to operate as an outlier or a rebel in this," Crouse said. "We would be absolutely following provincial law."

Uber Alberta general manager Ramit Kar said his company's position is that they are operating in an unregulated area of the province, because St. Albert does not have a bylaw that speaks directly to its business model.

He said Uber's lawyers have offered to work with St. Albert on new legislation similar to that passed in Edmonton.

St. Albert is working on its own vehicle for hire bylaw, which should be ready within the year.

"We're waiting for some of the provincial decisions to be made, as well as we're waiting for the Edmonton experience to play itself out," Crouse said.

'Uber could operate today'

Uber halted operations in Edmonton, just as a city bylaw regulating the ride-sharing service came into effect. The company suspended service at 6:00 a.m. on Tuesday morning, after the province failed to make insurance available to drivers in time for the deadline.

"We approved a bylaw that's ready to go today. Uber has the choice to get the proper insurance, and that's commercial insurance. Uber could operate today," city councillor Dave Loken said during a Tuesday morning interview on Edmonton AM.

"They've known for about a year now, in order to operate in our city they would have to obtain the proper insurance."

Edmonton's ride-hailing bylaw, which requires that drivers carry insurance specifically tailored to the industry, came into effect on Tuesday. However, the province announced Monday that the insurance packages would not be made available until July 1st.

Furthermore, Mason rejected Uber's request to waive a requirement for Class 4 licences, and indicated that police detailed information checks will be required for all Uber drivers.

"It doesn't surprise me. These guys have been less than honourable to deal with through this whole process," said Loken, who suggested that the company could easily shoulder the added cost of commercial insurance, and continue operating, until the provincial policies are finalized.

"They're a multi, multi-billion dollar corporation. It's just bewildering."

In light of Mason's announcement, Uber had asked the city to postpone the bylaw until July 1, so their drivers could continue to operate in unregulated market for another four months.

"You don't come into a city as any company or corporation and lay down demands like this," said Loken, who voted against the bylaw legalizing Uber operations.

"I don't think it's a good bylaw anyway. I didn't agree with it, so to be honest with you, I couldn't care less one way or another if Uber operates."

Insurance issues 'just a matter of time'

Councillor Andrew Knack echoed Loken on the insurance issues, but said it's far too late for the city to intervene.

"It is surprising. A lot of people had assumed that they would have had their insurance product figured out before the March deadline but … I'm glad they decided to voluntarily suspend service until that's sorted out."

Uber had been working with Intact Insurance to draft a policy for its drivers, but the new package needs full approval from Alberta's superintendent of insurance before it can be adopted.

Last week, Intact confirmed that the technical aspects of the policy had garnered the necessary approvals, but a final agreement still had not been reached.

"We created a bylaw that allows new choices in the market. Whether or not they figure out those other details is not really up to us. It's part of the challenge when you have a decision that orders of government have impact,"  Knack said. Knack voted in favour of the city's ride-sharing regulations.

"It's just a matter of time before the insurance question gets sorted out."

Although Uber said operations will cease in the Edmonton area, it will continue to offer its ride-sharing services in surrounding areas.

"I'm not entirely convinced that they're going to stop operating," said Loken. "They've been breaking the law in this city ever since they've come on the scene."

With files from the CBC's Laura Osman