It’s summer and the Pan Am Games are front and centre with more than a few governing Liberals hoping traffic hostilities dissipate as the spectacle of sport takes centre stage.
They’ve already dodged one major bullet as Toronto taxi drivers have agreed to Mayor John Tory’s pleas for peace with a promise of a new bylaw to “create a level playing field” in the face of ride-sharing service Uber’s disruption.
That new bylaw became a priority after Ontario Superior Court Justice Sean Dunphy dismissed an application for an injunction to shut Uber down. He found there was no evidence the company was operating as a taxi brokerage and, as a result, fell outside of the regulations.
The issue, he said, is political and not legal, at least at this stage. The province isn’t saying much and for good reason.
The city regulates taxis under the City of Toronto Act. Among other things, it bestows the power to make bylaws to govern a variety of areas: the economic, social, and environmental well-being of the city; health and safety; and the protection of people and property, including in consumer matters. The act singles out taxis in terms of setting a standard fare and limiting the number of licensed vehicles.
It’s unclear how successful any new bylaw may be. The province may yet have to step in because the issue is arising across Ontario.
Last week, Ottawa city council directed the police to enforce a section of the Highway Traffic Act. It’s a more interesting approach since s. 39 of the act, which deals with picking up passengers for compensation without a licence, stipulates: “A driver of a motor vehicle other than a bus shall not pick up a passenger for the purpose of transporting him or her for compensation where a licence, permit or authorization is required to do so by, (a) the Public Vehicles Act; (b) a municipal bylaw passed under Part IV of the Municipal Act, 2001; (c) a regulation made under the Department of Transport Act (Canada); or (d) an airport or airport authority, except under the authority of such licence, permit or authorization.”
Fines range from $300 to $20,000. The question then becomes how much public resources must go into gathering evidence and prosecution before we get a resolution?
Besides, the real fight isn’t over Uber. It’s over what was $10 billion in cab licences before Uber’s arrival a couple of years ago and is now $3.4 billion and dropping. There are 4,849 taxicab licenses in Toronto of which 3,451 are the so-called standard licenses people can buy and sell at market prices. The remaining 1,313 licences are ambassador plates owned by the city and licensed by drivers who must drive the vehicles themselves for a maximum of 12 hours a day. Under the rules, they can’t share a plate with another driver.
That’s not the case for standard plates. Families, investors, and corporations have consistently acquired and held plates as assets. For the most part, they don’t drive and many have no connection to the industry other than investing in plates.
No matter what, they get their money. The result is desperate drivers working long hours to pay for a plate lease that can run up to $1,900 a month.
Two years ago, the resale value of a plate hit a high of $360,000. Today, plates are for sale for as little as $100,000 and some observers feel those prices will continue to drop after Dunphy’s court ruling.
Further, agents who manage half of the standard plates take another cut from drivers.
Despite the city’s regulation of the rates, Toronto cabs are more expensive than in most similar cities. There’s the $4.25 fee just to get in and then 25 cents for every .143 kilometre travelled and the same amount for every 29 seconds of waiting time.
With their interest in getting a return exceeding what they’d get from the stock market, plate owners, who have the real power in the industry, have had no incentive to compete and thus are woefully behind when it comes to technology.
Finding a driver equipped to accept credit cards is a lottery. There’s no direct hailing by a smartphone application for all of the brokerages as with Uber, nor is it possible to see where the nearest taxi is and simply touch the screen to call it over.
What the industry has is a text-based service that costs up to $2.50 and adds insult to the $4.25 injury caused by the initial fee to get in. That’s $6.75 just to find and get in a cab. It’s no surprise, then, that Uber has shaken things up.
Politically, the province and the municipalities need to find an innovative solution without the heavy hand of regulative protection further coddling a sector that’s now facing the reality of disruption.
Ian Harvey has been a journalist for more than 35 years writing about a diverse range of issues including legal and political affairs. His e-mail address is [email protected].
