[SteveFromNY]

It's a risk to use someone who isn't insured to operate as a livery vehicle, forgetting for the moment all of the other points made in the original post.
You get in that car as a "customer" (whether he is your employee or independent contractor), the driver lacks the proper type of coverage (whether the limits are high or low), and there is an accident, driver's fault or not, the insurance companies aren't going to pay. Typically insurance companies are proud of their attitude of "we will pay no claim until the court tells us to" - well maybe not publicly - but payout percents are a stat they track for sure.