Uber fi­nally mak­ing in­roads

Waterloo Region Record - - EDITORIALS & COMMENT - Lee Hard­ing Lee Hard­ing is a re­search as­so­ciate with the think-tank Fron­tier Cen­tre for Pub­lic Pol­icy. Dis­trib­uted by Troy Me­dia

“She’s got a ticket to ride, but she don’t care,” goes the old Bea­tles song. When it comes to Uber, most riders would sing along.

If con­sumer de­mand was the only is­sue, the rideshar­ing ser­vice would prob­a­bly be op­er­at­ing across Canada by now, just like it does in over 600 cities around the world. Un­for­tu­nately, many Cana­dian ju­ris­dic­tions have been slow to let Uber hit the road. And even those that have may still be giv­ing the com­pany too hard a time.

As most al­ready know, Uber al­lows users to get rides from nearby driv­ers us­ing a mo­bile app. This makes Uber an in­tim­i­dat­ing threat to taxi com­pa­nies and their driv­ers. Be­fore Uber and its rideshar­ing com­peti­tors came along, taxi providers en­joyed their own form of sup­ply man­age­ment. Cities is­sued a set num­ber of cab li­cences, mak­ing higher prof­its for taxis and lim­ited ser­vice for riders.

Uber re­sponds to the mar­ket far bet­ter than taxis alone ever could. Taxi com­pa­nies and driv­ers have re­sponded to this threat by voic­ing com­plaints of vary­ing va­lid­ity. De­trac­tors say that Uber by­passes op­er­at­ing fees, lacks safety stan­dards and back­ground checks for driv­ers, and has in­ad­e­quate in­sur­ance cov­er­age. Some say Uber’s surge pric­ing sys­tem al­ter­nates be­tween un­der­cut­ting taxi fees in times and neigh­bour­hoods with low de­mand, and goug­ing when de­mand for rides is high. So what’s a govern­ment to do? The right an­swer is min­i­mal but ad­e­quate reg­u­la­tion that pro­vides a level play­ing field for the marketplace. It’s not for govern­ment to pick win­ners ver­sus losers, no mat­ter what the squawk­ing.

Ed­mon­ton was the first Cana­dian city to of­fi­cially sanc­tion Uber. Its ef­forts were helped by pro­vin­cial leg­is­la­tion that makes per­sonal in­sur­ance on a ve­hi­cle suf­fi­cient cov­er­age to of­fer rides for money. Just the same, the city spent $1.5 mil­lion in 2016 to en­force its by­laws, hand­ing out nearly 300 tick­ets to rideshar­ing driv­ers, ap­par­ently with­out a sin­gle con­vic­tion.

In the words of William Shake­speare, taxi driv­ers and politi­cians “doth protest too much.” In a study re­leased in Jan­uary, Carl B. Frey of Ox­ford Martin School com­pared Amer­i­can cities with and with­out Uber. The re­sults were some­what sur­pris­ing. The pres­ence of Uber seemed to cut the in­come for salaried taxi driv­ers by about 10 per cent. Even so, self-em­ployed cab­bies ac­tu­ally saw their in­comes in­crease by 10 per cent. Mean­while, the num­ber of self­em­ployed driv­ers in­creased by 50 per cent. Uber driv­ers earned more per hour than their coun­ter­parts in taxis, likely be­cause Uber is more ef­fi­cient at get­ting a driver to con­nect with a pas­sen­ger. This means a greater per­cent­age of the driver’s time is spent with a rider in­side and the me­ter run­ning.

What all this means is that taxis and rideshar­ing ser­vices can hap­pily co­ex­ist. Even cab­bies are start­ing to get that. Gur­mail Man­gat, pres­i­dent of Win­nipeg’s Unic­ity Taxi, told CBC in March: “If there is a level [play­ing] field, we have no prob­lem com­pet­ing . ... We need to have some guide­lines, reg­u­la­tions on them, too.”

Such reg­u­la­tions are be­ing set up at the city and pro­vin­cial lev­els, not only in Win­nipeg but also in Van­cou­ver, which is soon ex­pected to lose its du­bi­ous dis­tinc­tion as the largest North Amer­i­can city with­out Uber. Regina and Saska­toon await pro­vin­cial pol­icy changes so driv­ers can charge for rides with­out a PT Class li­cence that costs more than $4,000 an­nu­ally.

Bet­ter late than never. Too bad Cana­di­ans had to wait so long for the right to take any ride they were ready to pay for.


An Uber driver us­ing the com­pany’s app. Lee Hard­ing writes: ’If con­sumer de­mand was the only is­sue, the rideshar­ing ser­vice would prob­a­bly be op­er­at­ing across Canada by now, just like it does in over 600 cities around the world.’

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