The Liberals should be hailing Uber
Unlovable firm speaks to party’s core mandate
Uber may be the one of the world’s most unlovable companies. Profiles have talked of its “a ...... culture,” where aggression and backstabbing is encouraged.
There is an odious whiff of sexual harassment in the workplace, cavalier disregard for customer privacy and bullying towards critics. Drivers are considered “partners” or “contractors,” never “employees,” with the entitlements like paid vacation time the term implies.
And then there’s the chaos generated by the introduction of a disruptive technology to an industry that hasn’t evolved since the days of Travis Bickle’s Taxi Driver.
No wonder the Liberal government felt it could get away with whacking the ridesharing company with a new tax in last week’s budget.
It provided the government with a new source of income — albeit just $20 million over five years — and allowed the Liberals to bash a US$70-billion company for which there is little public sympathy.
But it is a short-sighted move that goes against much of what the Liberal government professes to venerate — innovation, the middle class, the fight against congestion and climate change.
Independent contractors do not pay sales tax until they earn more than $30,000 — except for taxis (presumably on the suspicion that drivers don’t declare much of their cash income).
Under the new rules in the budget, ride-sharing operators will be classified as a taxi business from July 1.
This is wrong-headed from any number of angles.
For one thing, many of 38,000 Canadians who have driven four or more Uber trips in the last month are part of, or aspire to join, the middle class this budget was aimed at helping.
Three quarters of those “partners” work less than 20 hours a week, viewing Uber as a short-term solution to earn some extra cash. Very few will earn more than $30,000 a year.
Interestingly, Uber’s driver profile is very different from the traditional taxi industry. Around one in five are women, reassured by an app through which the identities of both the driver and passenger are known.
The experience from Quebec, where provincial sales tax already applies, is fewer occasional drivers are prepared to work once the government has jacked up the cost and the administrative burden by demanding quarterly HST reports be filed. municipal governments like the City of Ottawa recognize there are differences that require separate regulations.
Uber is experimenting with other applications, such as UberEATS, a food ordering service, and UberPOOL, a ride-pooling option.
In the town of Innisfil, Ont., Uber has signed a partnership with the municipality to effectively create a public transit system, guaranteeing cheaper rates than a bus system.
This is a company that has far grander ambitions than killing the taxi industry. Rather, it is intent on killing the car industry — at least, the idea that everyone needs to own their own automobile.
Travis Kalanick, Uber’s cofounder, has spoken about his desire to eventually move to self-driving cars for Uber vehicles.
Children born in 2017 might never need to learn to drive. As a discussion paper authored by the University of California’s Adam Stocker and Sura Shaheen pointed out recently, automated vehicles and shared mobility applications will have become accepted technology by 2030 and may come to dominate ground transportation by 2050, revolutionizing the car industry in the same way that mobile phones have transformed the telecom industry. This will take millions and millions of cars off the road.
Instead of penalizing Uber drivers and customers, a more sensible way of levelling the playing field with the taxi industry would have been to remove the exceptional circumstance under which all drivers are obliged to pay sales tax if they earn less than $30,000.
If the Liberal government is as keen to innovate as it claims to be, it should reverse the direction of public policy and encourage private transportation companies like Uber and its competitor, Lyft.
Uber has some maturing to do when it comes to the way it treats its employees, its customers and its competitors. But its dynamic pricing, ride-sharing technology is here to stay and it will change global transportation systems for the better. Ottawa should be onside.