City finally correcting course with ride-sharing bylaw

That Calgary’s bylaw to legalize ride sharing might be amended so as to actually allow for ride sharing is a development to be welcomed.

That this possible development is causing such an angry backlash is a sign that those who embraced the original changes only did so because they knew it would keep out companies such as Uber.

Of course, Calgarians could be forgiven for expecting that a bylaw to permit and regulate ride sharing would accomplish that objective.

So it’s not at all unreasonable to expect city council to address this glaring and obvious shortcoming.

The proposed changes to the bylaw were the subject of a lengthy and emotionally charged hearing last week at a northeast Calgary hotel. The meeting dragged on for some five hours, as numerous representatives of the taxi industry lined up to bash Uber and accuse the city of bending over backward for them.

The matter was adjourned until Nov. 18. If approved by the livery transport advisory committee, the changes would go to city council as a whole.

Hopefully, this can get sorted out before the busy holiday season.

Despite all the hand-wringing, the changes represent a simple and long overdue fix. Rather than imposing a per-trip fee, as Edmonton did, Calgary’s original ride-sharing bylaw imposed a flat fee for drivers. If the proposed changes are approved, ridesharing companies would pay a scalable fee based on the number of drivers, a $15 licence fee per driver and a 20 cent per trip fee.

Credit to the city for trying to get it right this time, but questions should be asked about the certainty with which many on council claimed to have got it right the first time. The mayor, especially, was particularly dismissive of Uber’s clearly stated concerns.

At the time, Naheed Nenshi accused Uber of following a predictable public relations script, and suggested other major ride-sharing companies would appreciate Calgary’s bylaw.

Nenshi even mused about calling the headquarters of Lyft and saying, “Looking at international expansion? Here’s some regulations that will work really well for you.”

Unfortunately for the mayor, Lyft later confirmed that Calgary’s regulations wouldn’t work for them, either. And in the meantime, month after month passed without any major ridesharing companies entering the Calgary market.

With an election looming next year, it might be unwise for the mayor and city council to allow the status quo to persist into 2017. The province has already addressed some larger issues around insurance, licensing requirements and background checks. The rest should be easy for Calgary.

The taxi industry, though, doesn’t intend to let this be easy. Of course, back in February, when the city had ostensibly legalized ride sharing, they were paragons of compromise. The president of Associated Cabs, for example, said the rules created a “fair and level playing field” that would be “good for the industry, good for the consumer.”

Now, suddenly, some sensible adjustments to the fee structure represents an existential crisis to the industry.

Consumers have certainly not benefited from Calgary’s status quo.

A study released last month by economists at the University of Chicago and Oxford University illustrates just how strong the consumer benefit of ride sharing is. The authors used Uber’s abundance of available data to map out a demand curve and deduce a consumer surplus figure — the difference between what you actually pay and what you’re willing to pay.

They found that for each dollar spent by consumers, about $1.60 of consumer surplus is generated. That translates to a $6.8-billion consumer surplus in the U.S. last year alone.

Calgarians are missing out on this, despite being told months ago that city council was opening the door to ride sharing. Those who want Uber banned are free to make their case, but changing the city’s bylaw so that it permits what it claims to permit can’t happen fast enough.