The New Wave: Reconciling Uber with Edmonton's Bylaws

Nobody can say that the job of a City Councillor is boring. This afternoon’s meeting on vehicle for hire and ride-sharing regulations was a little tumultuous at times. In fact council was holed up in our bunker for around an hour as meeting attendees reacted angrily in our chambers.

Eventually Council was able to return and put together a motion to amend the proposed bylaw that will hopefully create greater equity in the taxi industry while making way for the innovation of new market entrants. It is time for our city and our council to embrace the future or ride-sharing technology while recognizing the valued past and future of taxi drivers, owners and brokers.

Before I move forward to talk about Uber and ride-sharing, let’s go back and take a look at the history that has brought us to the situation we are in today.

Edmonton’s Taxi History

In 1995, the City decided, along with many other municipalities, that there needed to be a cap put on the number of taxis that could operate. This was done to help regulate the industry - having drivers assigned to a license makes it easier to monitor and enforce in cases of bad service or behaviour, and leads to more predictable service levels (in theory). So that year, the City handed out taxi plates at $400 a pop, and capped the number of licenses at 1185. More regular plates were released in 2007 and 2009, so that as of winter 2015, there were 1319 licenses issued in the City

But the situation today is much different from 1995, because not every cab driver owns a plate. Instead, most taxi drivers rent from the plate holders. To buy a taxi plate today could cost you upwards of $150,000, so many of the plate owners have made a big investment to get in the game. But a plate holder can make up to $40,000 a year renting out a single plate, on top of whatever the owner might make by working.

The Secondary Industry

In the current system, the non-plate owning taxi drivers are getting squeezed pretty hard. They pay licensing fees, and on top of that have to pay to rent the plate from the plate owner. According to some drivers that I’ve spoken with, it’s very possible to pay up to $450 per week to rent a plate for a series of shifts. Many drivers have to work 12 hours a day, 7 days a week just to make ends meet.

While the proposed bylaw amendments are by no means perfect, they would certainly present a better alternative to the drivers who are in this position. Instead of $400-450 week rent on top of fees and insurance, they could be paying $600 per year, with insurance and car payments for a vehicle that they would also be able to use privately.

Of course, it’s understandable, to a degree, that the plate holder charges so much. If a driver they are renting to gets in an accident, the plate owner is the one that ends up losing money while the car is out of commission. Many have also paid a premium to get in the plate holding game, and have to pay down that investment.

The Arrival of Uber

So that’s been the model of our vehicle for hire industry, up until December 2014 when a new player rolled into town. Uber started operations here in December.

Say what you will about Uber’s business tactics, their business model is popular and pretty effective. I’ve heard from hundreds of pro-Uber Edmontonians in the past few months; it’s clear that there is a huge amount demand for this service, and that it is unlikely to go away.

Other cities have had some success in blocking ride-sharing, but to many, myself included, it seems to be a foregone conclusion that these companies are here to stay, and will eventually win their way into the market. Ride-sharing represents a new wave of options coming in for customers, and fighting that tide is an inefficient use of our time and resources. So if Edmonton is going to be a smart, forwarding thinking city, we may as well get on board now, rather than wasting time fighting something that citizens want.  

The Draft Bylaw

The draft bylaw that was presented to Executive Committee last week was, in many ways, the worst of both worlds. It overregulated ride-sharing providers with fees and non-electronic licensing requirements, which is fairly incompatible with the driver recruitment process for companies like Uber. What’s more, it did nothing to address the issues in the taxi industry that have been glaringly obvious for some time.

At today’s Council meeting, we sent the draft bylaw back to Administration to fix those problems. Where the taxi industry is concerned, there needs to be a thorough consultation with all members of the industry, including non-plate owning drivers, to assess the wisdom of retaining the current fixed and variable rates policy, and examining other potential improvements to the industry.

The ride-sharing part of the bylaw is going to take a lot more work. Some of the possibilities that will be explored include:

  • the creation of a distinct license class for Transportation Network Companies (ride-sharing operators) with appropriate fees.

  • A lowering of driver’s license fees for ride-sharing drivers to $50/year

  • Adoption of a policy of non-discrimination on pickups for Transportation Network Companies, so that a ride-sharing driver couldn’t discriminate against a potential customer based on race, gender, etc.

  • how to maintain the number of accessible taxis.

  • options for self-regulation by Transportation Network Companies.

The Mother of Invention

I firmly believe that there is space in the Edmonton market for both ride-sharing companies and the taxi industry to exist successfully, but some adaption will be necessary on the part of companies. I have met with enough taxi drivers to know that some evolution in our vehicle for hire bylaw is necessary, even without ride sharing, for these individuals how are arguably the most vulnerable in the industry. I’m looking forward to seeing the reports from Administration executed expeditiously, and with thorough consultation with all the relevant stakeholders. The time is now; we can't keep trying to hold this wave back anymore.