Rising cab fares may make city attractive to Uber

Anyone who hasn’t kept up with taxi fares in Ontario cities wouldn’t know that Peterborough is an expensive place to catch a cab. That was the case, relatively speaking, before the local police services board approved a 23.5 per cent rate increase earlier this week. Now, it’s unquestionably true. A website that tracks cab rates in 25 medium-to-large cities across the country shows Peterborough as the third most expensive place in Canada to be a taxi user. That situation, and the way the increase came about, highlights the difficulties that can be created when an industry is regulated for price. Virtually every community in Canada, and likely in North America, controls taxi fare rates. The rationale is that cabs are a necessary service for anyone who can’t afford a car and those lowincome earners need to be protected against price gouging. In return for accepting price controls, licensing fees and other regulations that require they meet safety and insurance standards, cab companies get protection for their market. In some big cities that has meant strict limits on the number of licences, or “badges,” issued to allow a company or individual to operate a cab. In Toronto that virtual monopoly has, until recently, made a taxi licence worth up to $360,000. The arrival of Uber and other non-licensed taxi options has driven down the value of licences, and also the cost of taking a cab, in cities where those services operate. Peterborough is Uber-free at the moment. Whether Uber or something like it moves into a market of this size remains to be seen. Peterborough is also free of the elevated price of a cab licence. No one here is getting rich selling licences on an open market. And if you accept what the two cab companies that applied for the latest increase are saying, no one is getting rich on the day-to-day business, either. A Call-A-Cab representative told the Police Services Board that fares had not increased in 10 years, expenses have skyrocketed during that period and a big hike was necessary if the companies were going to continue to pay drivers a reasonable living wage. (The other company, Capitol Taxi, is owned by Mayor Daryl Bennett, who sits on the police board. Capitol supported the application but no one spoke on the company’s behalf. Bennett declared a conflict of interest and did not take part in the debate or vote.) While costs have no doubt increased in a decade, it seems strange that some corresponding fare increase hadn’t been approved for such a long time. The answer appears to be that Peterborough rates are traditionally set at the very highest end of the spectrum and then held there while others catch up – or get closer. Even at the 10-year-old local rates, a three-kilometre cab ride here would be more expensive than current rates in Kingston, Guelph, Kitchener, Toronto or Ottawa allow. That ride would cost more in Oshawa and Windsor. With the new rates, it appears that only Oshawa and Charlottetown, P.E.I. have more expensive cab service. A better result for Peterborough cab customers would be to encourage services like Uber into the game, with enough regulation to ensure customer safety. The local companies would object, but this increase undercuts their arguments.