Extricate city from taxi business
It’s not just the taxi companies that must become more creative in finding ways to transport people from the airport, as suggested by the airport authority’s contract administrator.
Saskatoon, too, needs some fresh thinking.
Like almost every major city in Canada, except perhaps Montreal, Saskatoon’s City Hall keeps a close watch on the city’s taxi industry. As the Winnipeg-based Frontier Centre for Public Policy argued in a report published last year, that oversight might be too restrictive.
David Seymour, a senior policy analyst for Frontier, looked at taxi industries in Prairie cities and concluded that tight municipal controls have so distorted the market that a taxi licence now routinely sells for many times the price of a new car.
From the perspective of a consumer, something clearly is wrong with how the taxi industry is run. That’s been manifest lately in the discussion on how to get more cabs to the airport in a timely fashion when passengers are desperately seeking transportation.
It is for that reason the airport authority has been trying to hammer out a deal with taxi companies to make sure there are enough cabs on hand. For its efforts, the authority came under fire from smaller taxi companies for drafting a contract that would require a fleet of at least 50 vehicles.
But it’s not only the airport that suffers from a periodic dearth of cabs. Bar owners in Saskatoon have indicated that on some nights, patrons are required to wait as long as 90 minutes for a cab if they want to go home between midnight and 2:30 a.m. This may be a serious inconvenience for those who are willing to wait, but it is a serious danger for those who aren’t (and the public) if they opt to drive home intoxicated.
It is hard to imagine any other business — even with strict oversight and regulations — that could remain operational and treat their customers in such a manner. If hotel operators only had rooms available occasionally, or restaurants required customers consistently to wait half the evening for a table or, as often as not required them to find another way to get their meal prepared, it wouldn’t take long for another establishment to set up across the street.
This is not to say that hotels and restaurants lack government oversight and regulation. Governments regulate safety and public health, oversee where these businesses are allowed to locate , dictate how much parking they must provide and even set such things as height restrictions. What City Hall doesn’t do is slap restrictions on how many restaurant tables Saskatoon can have or licence hotel rooms to the extent that the value of the licence by far exceeds the capital costs of building a hotel.
Once they get into the business of controlling taxi numbers, there is no easy way for governments to extricate themselves without causing serious damage to those who’ve paid an average of almost $80,000 for the licences. Saskatoon isn’t the only one to find itself in this bind. In Calgary, taxi licences sell privately for $150,000 and in Vancouver, where the various jurisdictions not only restrict the number of taxis on the road but even the municipalities in which they can pick up fares, the price can be as high as a quarter-million dollars.
When someone pays that much for a taxi licence, the fares have to be set artificially high in order for the driver and licence owner to recoup their investment. Customers are not only disadvantaged in that they can’t get a cab when they need one, but they pay dearly for their ride once a taxi does pick them up.
This has a stultifying impact not only on the local taxi business, but also on a community’s economy, culture and environment. Those who for economic or environmental reasons don’t wish to own a car must pay much more for the privilege of getting a ride.
There is a message in the fact that, in spite of these drawbacks, most major Canadian cities continue to have taxi commissions or other means of controlling the industry, to the point that politicians decide how many vehicles for hire should be allowed on the street.
However, Saskatoon has a welldeserved reputation of charting its own path when it faces such challenges. To adapt Saskatoon Airport Authority contract administrator Shelley Moser’s words, it’s time for civic officials to get “creative” and find a way to open up the taxi market to competition.
Regulations regarding cleanliness, safety, driving skills and vehicle appropriateness will still be necessary. And the city may even want to consider giving preference to such things as the environmental impact of the vehicles — some cities have put pressure on the industry to adopt hybrid or electric vehicles — or even charge to set up a non-partisan central dispatch service that serves all the cars on the street to provide the best customer service.
But at some point, City Hall has to stop strangling the industry by controlling how many people can take their chances in making a living by driving a cab. The sooner Saskatoon begins the task of extricating itself from limiting the number of taxis on the street, the more it will manage the pain of the switch.