Permit values decline by tens of thousands in province
The ride-hailing application Uber appears to have taken a huge chunk out of the investment of thousands of taxi drivers in the province, new figures released to the Montreal Gazette show.
The average sale of taxi permits, calculated by the Commission des Transports du Québec, dipped in value by tens of thousands of dollars in the span of a year, the largest decrease on record since 1999.
First issued by the Quebec government decades ago as a way to control the supply of cabs, taxi permits have been sold on the secondary market, often on sites like Kijiji.
Between 1999 and 2016, permits more than tripled in value, and in the case of Laval, the most lucrative market, they quintupled in value. However, in the last year, all five districts of the Montreal region saw a dip of between 9.5 and 18.9 per cent during the second full year of Uber’s operations in the region as a competitor to taxis.
Here is how much taxi permits sold for in the five districts in Montreal as of March 31: Laval: $242,681, down 9.5 per cent West Island: $190,042, down 12.8 per cent Montreal: $143,654, down 18.9 per cent Montreal East: $143,063, down 16.3 per cent Longueuil: $126,591, down 10.7 per
cent
The situation was even worse in other regions: in the Quebec City region of Ste-Foy, for example, permit values decreased by 20.7 per cent. Values also decreased in Lévis, where Uber does not operate, by 27.7 per cent.
Representatives of the taxi industry are in court this week, arguing for a Superior Court judge to order the cancellation of a pilot project, begun last September, that legitimizes Uber.
“It’s very easy to explain (the decrease in values), because a cake that was separated for 10 people is now separated for 50, so our piece of that cake is much, much less,” said Wilson Jean-Paul, a spokesperson for Regroupement des travailleurs autonomes Métallos, which represents about 5,000 taxi drivers in the province. “So we’re asking for $100,000 for each taxi driver (who owns a permit). We can’t take this sitting down. We have to do something to get the government to change its position.”
The province’s pilot project attempted to even the playing field by forcing Uber drivers to get a Class 4C licence and adding a surcharge to all Uber rides.
Jean-Nicolas Guillemette, the Quebec general manager for Uber, figures his company still offers roughly a 25 per cent discount on taxi fares.
It is that discount, and the ability of Uber drivers to compete without purchasing a permit, that is the sticking point for taxi drivers. Many owners of permits have taken out long-term mortgages to pay for them, and they planned on selling the permits to help fund their retirement.
However, values have been decreasing steadily since they reached a high-water mark in 2009. In the Montreal region, permit values declined by $67,466, or 32 per cent, in that time.
The taxi industry has other arguments for cancelling the pilot project. It says Uber routinely violates the rules set out by the government when it signed the agreement in September.
“Some are not driving with their vignettes (identifying sticker),” Jean-Paul said. “Uber has not respected the agreement, so we want the government to cancel the project.”
In fact, inspections from the Bureau de Taxi de Montréal, a division of the Montreal police, show many drivers have been issued fines for not respecting the rules of the pilot project. Between Jan. 1 and April 30 this year, 854 inspections were made of cars driven by Uber drivers, and among those inspections, 178 were issued tickets. Among taxi drivers over the same period, there were 1,762 inspections, resulting in 418 fines.
Guillemette said the biggest obstacle for Uber drivers to adhere to the pilot project has been the stipulation that they affix an Uber sticker on their back windshields.
Because Uber drivers don’t always use their cars to pick up passengers, Guillemette said they remove the stickers several times per day, and that makes them sticky and less likely to stay on. He said, however, the company has ordered new stickers for drivers that should not peel off the windows. Drivers face fines of $700 if they ride without a sticker.
In addition to the cancellation of the pilot project, the taxi industry is demanding the government move more quickly on its stated plan to modernize the industry. That plan could include re-examining the use of a permit system and finding new ways for government legislation to adapt to the changing competitive landscape.
Mathieu Gaudreault, a spokesperson for Transport Minister Laurent Lessard, said the minister is concerned by the effects of the project on the values of taxi permits and will monitor them closely. Lessard must decide by September whether to extend the pilot project.