Cities forced to re­think taxis

The Guardian (Charlottetown) - - CANADA - THE CANA­DIAN PRESS

The ad­vent of com­pe­ti­tion and new tech­nolo­gies is forc­ing politi­cians across Canada to re-eval­u­ate their cities’ taxi in­dus­tries and to won­der just how many cabs they want on the roads.

Big cities are strug­gling with new en­trants such as Uber, a ser­vice that al­lows driv­ers to work with lit­tle over­head costs and to un­der­cut tra­di­tional cab fares.

Politi­cians in ju­ris­dic­tions such as Toronto, Mon­treal, Van­cou­ver and Ed­mon­ton are study­ing ways to mod­ern­ize the taxi in­dus­try but while they come up with so­lu­tions, some cities are la­belling Uber’s ser­vices “illegal” and forc­ing po­lice to seize its driv­ers’ ve­hi­cles.

But not all the bat­tles against the up­start have been suc­cess­ful: the City of Toronto re­cently lost a court case against Uber when a judge ruled there was no ev­i­dence the com­pany was op­er­at­ing as a taxi bro­ker or that it breached city by­laws.

Su­nil Jo­hal, pol­icy di­rec­tor at the Mowat Cen­tre, a public pol­icy think-tank at the Univer­sity of Toronto, says politi­cians should be think­ing about the in­ter­est of cit­i­zens as op­posed to en­sur­ing tra­di­tional taxi driv­ers can earn a liv­ing un­der the cur­rent sys­tem.

He ques­tions whether Cana­dian may­ors have the where­withal to tell the pow­er­ful taxi lobby that the days of mak­ing a liv­ing driv­ing a taxi full time might be com­ing to an end.

“It’s go­ing to take courage,” Jo­hal said.

In Que­bec — as in many other places in Canada — the gov­ern­ment strictly reg­u­lates the num­ber of taxi per­mits that are granted.

For in­stance, the is­land of Mon­treal can only have 4,522 per­mits. Notre-Dame-de-Pier­re­ville, a town of 2,000 peo­ple about 130 kilo­me­tres from Mon­treal, is al­lowed two.

“The goal is to keep the rev­enues of the taxi driv­ers higher — that’s it,” said the Mon­treal Eco­nomic In­sti­tute’s Vin­cent Geloso, who ad­vo­cates dereg­u­lat­ing the in­dus­try.

As a con­se­quence of the lim­ited num­ber of per­mits, their price has soared to roughly $200,000 in Mon­treal, mak­ing its mar­ket worth roughly $900 mil­lion.

Per­mits are bought, sold, traded and rented on web­sites of com­pa­nies such as Fin­taxi, which pro­vides loans to driv­ers in or­der for them to af­ford the per­mits.

The sys­tem worked for decades un­til com­pa­nies like Uber came along.

Uber driv­ers don’t buy per­mits, have lit­tle over­head and use a mo­bile ap­pli­ca­tion to lo­cate cus­tomers.

Jo­hal says the so­lu­tion is to end the lim­ited taxi-per­mit sys­tem.

“If you have some­one who has a car and is a safe driver and is prop­erly in­sured, why don’t they have the right to pick peo­ple up and drive them around?” he asked.

“If you (dereg­u­late the in­dus­try) the mar­ket would sort it­self out and peo­ple who couldn’t make a liv­ing would stop do­ing it.”

He is not op­ti­mistic such dereg­u­la­tion will hap­pen be­cause he be­lieves it would re­sult in the col­lapse of the taxi per­mit mar­ket across the coun­try — a choice he said would be po­lit­i­cally dif­fi­cult to make.

“If a city an­nounces it will phase in three times more li­cences in the next 10 years, then the li­cences will lose their value now,” Jo­hal said. “No one will buy at ($200,000) now be­cause they know in (a few years) years it’ll be worth $50,000.”

But the de­val­u­a­tion of the mar­ket is al­ready hap­pen­ing, ac­cord­ing to Mon­treal cab­bie Enamul Haque, who re­ceived a loan to buy his $230,000 per­mit five years ago and now says it’s worth about $170,000.

“I’m los­ing money on my in­vest­ment,” Haque said. “I’m los­ing my busi­ness.”

He says his costs in­clude the per­mit loan, fees for the dis­patcher, fees to the taxi bureau, a spe­cial driver’s li­cence as well as ga­so­line.

“I work 12 hours a day, seven days a week,” he said. “And I am still strug­gling to sur­vive. I’m earn­ing less than peo­ple who are wash­ing dishes in restau­rants. Can you imag­ine that?”

Marc An­dre Way, pres­i­dent of the Cana­dian Taxi As­so­ci­a­tion, ar­gues lim­its on the num­ber of per­mits are im­por­tant.

“You don’t want a Wild, Wild West type of en­vi­ron­ment where ev­ery­one can drive peo­ple around be­cause then no one can make a ca­reer out of it,” he said.

The per­mits in the in­dus­try have a value, he said, and “it’s an in­her­ited value and it’s been around for decades.”

“Many of us have in­vested in them and con­sider them as­sets,” he added.

But many taxi driv­ers aren’t lucky enough to have those kinds of as­sets.

Bazzi Bas­sam pays $440 a week to rent his per­mit and says he works about 70 hours a week driv­ing peo­ple around Mon­treal.

His col­league, Ge­orge Ene, also rents a per­mit for about the same amount and said he works 11 hours a day, five days a week.

“I’m mak­ing about 45 per cent less than when I started 19 years ago,” he said.


Ge­orge Ene, who has been driv­ing a taxi for 19 years, waits for a fare in Old Mon­treal.

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