Montreal startup’s plan to compete with Uber is on hold

A Montreal-based startup says Quebec’s transport ministry has essentially given Uber a monopoly over ride hailing.

Raphaël Gaudreault and Dardan Isufi, the co-founders of Eva, say they applied for permission to launch a ride-hailing service in January, but they still haven’t received an answer from the Ministry of Transport.

Uber operates in Quebec under a pilot project that allows for “remunerated passenger transportation services requested exclusively using a mobile application.”

Gaudreault and Isufi say they want to be considered for that program.

“Basically, what we want is the same legal framework that Uber has for the moment. We know that in the future the situation can’t remain the same for both Uber and Eva, because there’s really illogical elements in the pilot project,” Gaudreault said. “But for now, we only want exactly the same things.”

Because Uber is the only company that has been accepted into the pilot project, both foreign competitors and local startups are being shut out, Isufi said.

“Right now, the Ministry of Transport in Quebec is giving a de facto monopoly to Uber,” Gaudreault said. “We would like to be able to operate without getting fines.”

And Isufi said the company is now looking to launch its app in Toronto — where Uber has several competitors, including at least two Toronto-based companies.

Eva hopes to offer a similar service — it has developed a mobile app to connect drivers and riders.

However, the company has a different business model: it’s a cooperative, rather than a for-profit business. Both drivers and riders would be members of the co-op.

They say that would keep revenues in Montreal.

The pilot project “needs serious revamping to ensure that we have a competitive market,” said Guillaume Lavoie, who teaches about the sharing economy and public policy at the École nationale d’administration publique and chaired a working group commissioned by the provincial government to study the sharing economy.

“If the barriers to entry or the requirements are too severe or too high, then it means that only the big guys can compete,” he said. “The pilot project regarding Uber has very, very high barriers of entry and very strong requirements, notably, a number of hours of compulsory driver training.”

That’s keeping both larger players like Lyft as well as local startups out of the market, he said.