Enter the feds in B.C. government’s ride-hailing fight

Canada’s competition watchdog is calling out the John Horgan government and its plan to suffocate the ride-hailing industry before it draws its first breath.

The Competition Bureau of Canada is responsible for encouraging competitive and innovative business markets in the country.

But that’s not what the bureau sees emerging in B.C., where Horgan’s NDP government is proposing heavy operational restrictions on ride-hailing companies like Uber and Lyft.

The government has suggested placing caps on the maximum number of ride-hailing drivers allowed on the road, government control of fare pricing and discredited taxi-style geographic boundaries on where ride-hailing drivers could operate.

The bureau is having none of it.

“Instead of regulating things like caps on the number of drivers, geographic boundaries and price regulation, just let the principles of supply-and-demand decide what is best,” Leila Wright, associate deputy commissioner with the bureau, told me Monday. “When companies have an equal opportunity to compete with one another, that’s when you’ll get those good things for consumers like lower prices and more choice.”

No other jurisdiction in Canada regulates ride-hailing in the way the New Democrats are proposing here.

“The City of Ottawa put out a report a few years ago where they said Uber prices are 36-per-cent less than taxi prices on average,” Wright said. “Passengers in Ottawa wait between five to 15 minutes for a taxi, versus four minutes for an Uber driver. So real, clear benefits when competition is introduced into the market.”

But wait. Don’t the taxi companies operate under strict geographic boundaries that prevent drivers from crossing municipal borders to pick up passengers? Wouldn’t that give an unfair advantage to Uber and Lyft drivers? The bureau has a pretty simple remedy for that: Let taxis and ride-hailing vehicles compete under the same rules.

“The rules should be the same for both types of driver,” Wright said. “Drivers should have the flexibility to choose their own service areas. That would allow the market to say, ‘This particular area has really high demand,’ so there will naturally be more drivers in that area.”

This a shocking dose of common sense that will no doubt place added pressure on the NDP to finally allow ride-hailing to operate freely.

But there’s nothing to stop the government from simply ignoring the advice.

Caps, boundaries and price controls wouldn’t run afoul of the federal Competition Act, Wright told me, adding the bureau is offering recommendations only.

“We hope the B.C. government takes our advice into consideration,” she said.

I’d say frustrated members of the travelling public would agree with her. Ditto for people who would like to become Uber or Lyft drivers to earn some extra cash.

But the New Democrats, like the Liberals before them, have been consistently obedient to the powerful taxi lobby. The government may dig in its heels, despite the growing pressure.