Ride-hailing doesn’t mean end of taxis

The dawdling time line that Transportation Minister Claire Trevena presented for allowing ride-hailing in B.C. was such an affront that it overtook the taxi report she released the same day.

It’s a interesting read, because it illustrates the remarkable solicitude the government has for that business. Of all the old-line service sectors that faced getting pushed aside by the new economy, none has prompted more anxious concern and lengthy deliberations from government than taxis.

The fretting and the hand-wringing by officials have gone on for years. The industry is politically influential in metro Vancouver, and both B.C. Liberals and the NDP know it. Hence the extended dilly-dallying about how to make the wake-up call for the taxi business as stress-free as possible.

Trevena added another 14 months to the tale of delay last week, saying the new due date will be the fall of 2019. That’s two full years past the date promised by all parties in the last election campaign.

She did so while releasing a report that confirms yet again government’s overwhelming preoccupation with the taxi business, as opposed to the people standing on the curb needing rides.

Faced last year with having to make a decision on ridehailing, she ordered up a report — not on ride-hailing — but on “modernizing taxi regulation.”

Written by Ottawa taxi expert Dan Hara, it’s mostly about minimizing the disruption coming that industry’s way, if ride-hailing ever does arrive on B.C.’s shores.

And oddly enough, his report suggests the disruption everyone is anticipating might be over-hyped. When ridehailing gets established as a safe, convenient option (see everywhere but B.C.) it creates so much growth in vehicle-for-hire demand that everyone can benefit.

Hara said ride-hailing firms have revealed “the magnitude of suppressed demand” that’s out there. The total number of trips in hired vehicles taken in Canadian cities could expand by 26 to 75 per cent in just a few years.

What has suppressed that demand are the traditional problems the taxi industry faces. They include the failure to increase the number of cabs and the arbitrary number of licences that ignores the huge fluctuations in demand between 10 a.m. and midnight. Refusals of service and boundary restrictions add to the pile.

Those and other problems leave large parts of the customer base standing out in the cold, and are remarkably inefficient for the taxi owners as well. There are pages of complaints from everyone involved about the failings of the old model.

But ride-hailing doesn’t have to mean demolishing the taxi industry, says Hara.

“Are transportation-network companies just taking trips away from taxis, or is the story one of increased supply evoking greater demand?”

His report leans toward the latter. With higher reliability and service, people start relying on it more. They go out more in the evenings. More people give up cars and rely on the proven service, and also start using transit.

His basic premise is that if the taxi business were dragged into the modern era, it could compete with the ride-hailing firms, rather than be annihilated.

And government appears open to the concept of rushing in with taxpayers’ money to help with the modernization.

Hara suggested that B.C. consider financial support to taxi consortiums that are proposing a shared phone-based taxi app.

There’s even some discussion of compensating taxi owners for the expected drop in the value of their licences. It could cost hundreds of millions of dollars, so the idea is discounted. But just broaching it demonstrates yet again the concern government has for the industry. (Where were these people when all the video stores were going out of business?)

As it stands, the government will likely help fund a taxi app that would upgrade the service level. The B.C. Liberals promised $1 million to that same goal just before the last election. They also offered $3.5 million to install “crash avoidance technology” on all taxis, along with some breaks on their ICBC rates.

The NDP hasn’t gone that far yet. But Trevena still has more than a year to get to the latest target date, and Hara is being retained again to guide her every leisurely step of the way.