Taxi price war predicted from Uber-friendly bylaw
Proposal from city staff would give cab industry fare flexibility
City officials predict a price war and increased competition will hit the taxi industry if a new set of Uber-friendly bylaw amendments are adopted, and not just because of the new international player.
A new deregulated fare structure proposed by city staff Thursday would let any company — taxi broker or Uber — charge any price they like for a pre-arranged fare as long as a customer agrees to it in advance.
Anyone getting a cab at a taxi stand would have the same metered rate, but customers who call for a pickup can price-shop between companies.
That could mean discounts and loyalty programs for frequent users. It could also mean surcharges for busy nights, no matter which company the customer picks.
“We’re going to see more competition. That will be a result,” said Peter Ohm, acting branch manager overseeing the bylaw. “If you don’t like the rate being offered by one dispatcher, you can call another.”
“Only the cab industry is allowed to take street hails and pick up at taxi stands,” Ohm added.
His office is asking council to delay implementing the bylaw until June 1, if it passes, so they can mount an education campaign to prepare Edmontonians.
“This is a good balance to ease the pain (of taxi plate owners),” said Coun. Andrew Knack, saying change is coming regardless.
“It lets the taxi industry compete against Uber, which is something they’ve been very clear on. … Offering flexible fare prices might offer them the opportunity to expand their market.”
Uber quickly came out in favour of the new proposals, amendments to a bylaw that passed first reading Nov. 17 and goes to council for debate Tuesday. The Californiabased company uses an app to let drivers use their own vehicles to offer rides to passengers.
In a written statement, spokesman Xavier Van Chau called it “good news for Edmontonians.”
“We are cautiously optimistic that Edmonton could become the first Canadian city to approve a workable regulatory framework for ridesharing,” he said.
In the new bylaw, city staff recommend Uber charge six cents a trip to cover licensing fees for the city, plus a $70,000 annual lump sum. That’s significantly less than the $920 per driver fee proposed last fall.
With nearly 4,000 drivers signed on since last December, the per-driver fee would have cost Uber roughly $3.6 million.
Part of the annual lump sum would go to financing more accessible taxis to ensure wheelchairaccessible options are available.
The bylaw would require Uber to open its books to city officials for auditing. Since the fare is calculated on a cost-recovery model, that would also allow the city to adjust what it charges if regulating Uber is taking more or less time.
Traditional taxi drivers would continue to be charged $400 a year for their licence.
“I think it offers more fairness,” said Garry Dziwenka, head of the city’s vehicle-for-hire section.
He said the city will use the money to hire more staff to oversee Uber drivers.
The city would pull Uber’s licence if Uber doesn’t grant adequate access to their files. City officials could then seek a court injunction against Uber if it continues operating and fine Uber drivers $5,000 each, up from $1,400 under the old bylaw.
Uber would not be given a licence to operate until it can prove it has a provincially approved insurance policy.
Pascal Ryffel, hired by the Alberta Taxi Group to represent 600 taxi drivers, said the industry is disappointed with the proposal, which will lead to a deregulated industry.
“The bylaw as we read it is really tilted toward Uber,” he said.
“There’s no limits on plates so anybody is able to operate” he added, worried Uber’s low prices will drive professional taxi drivers from the market.