On Uber, three issues Toronto needs to get right
After 18 months, several traffic-halting protests, two court challenges and thousands of water cooler discussions, the moment of truth is near. Toronto’s city council is expected to develop a regulatory framework for taxis and the ride-sourcing company Uber in April.
Roughly 20,000 trips a day are taken on the peer-to-peer UberX service, and polling numbers consistently speak to high levels of consumer satisfaction, particularly around pricing and ease of use. But this praise has come in a marketplace where taxis are subject to reams of regulations, while UberX operates essentially unfettered by government oversight. Will consumers still be satisfied when the “playing field is levelled,” a phrase that Mayor John Tory, the Competition Bureau and cab companies have all used? If the playing field is levelled intelligently, and with the public interest at the heart of councillors’ deliberations, the answer to that question should be yes.
There are a raft of specific issues that will need to be tackled, including insurance coverage, licensing fees, adequate criminal record checks and narrowing the gap around driver-training requirements (UberX drivers watch a short tutorial, Toronto cabbies must take 17 days of courses). But, these are all relatively straightforward matters that have been dealt with in many other jurisdictions. There are, however, three critical issues that Toronto needs to get right: the ask, the numbers and the option to use an eraser.
What will the city demand from Uber in exchange for market access? The company’s deal with Boston demonstrates that it will pony up data on its routes — both to inform future tweaks to regulations, and to help officials decide where and when to boost transit routes. Toronto should also press for access to information on driver ratings to better target inspection and enforcement efforts.
Uber has also agreed to impose a pertrip levy in cities ranging from Edmonton to Chicago, which funds transportation priorities like accessible vehicles. To date, most of these fees top out at 30 cents per ride, which would mean about $2 million per year — enough to purchase 40 accessible vehicles a year or retrofit twice that number. As the biggest market in Canada, Toronto should demand at least that much of a levy.
The number of drivers in the city is the second major issue which bears watching. Toronto, like most major cities, has traditionally limited how many plates are available to taxi operators — the number currently stands at 5,000. This cap on supply has made some people who hold dozens of plates very wealthy while also serving to restrict competition.
Opening up the market to thousands of UberX drivers (most of whom drive fewer than 10 hours a week) will, ultimately, lead to a more dynamic marketplace but also significant opposition from plate owners as their investments continue to lose value.
This will be the trickiest knot to untangle for councillors. On the one hand, times have changed and investment decisions aren’t backstopped by governments in most marketplaces. New South Wales in Australia created a transitional fund, generated through a fee on all taxi and Uber rides, to cover losses of recent plate purchasers while New York City has explored limits on the number of UberX drivers.
Increasing consumer choice should be prioritized, but consideration should also be given to easing the transition to a new regime for recent plate purchasers.
It is unlikely Toronto will perfectly balance all competing interests, like the optimal number of taxis, in the first go around. So, it needs to write these regulations in pencil and be prepared to review and assess what’s happening with the option of revisiting rules in a year or two. Establishing a rigorous performance measurement system that assesses the traffic and environmental impacts of more cars on the road, consumer satisfaction levels and impacts on drivers will be critical. Ongoing monitoring and evaluation will ensure that responsive, fair rules are being developed based on evidence, not anecdote.
The city should also take the breathing space afforded by a new regulatory framework to begin conversations with the province, other municipalities and planning authorities to develop a more integrated approach to transit and transportation policy not driven primarily by licensing and enforcement concerns.
Cities and provinces across Canada need to start thinking proactively about how ride-sourcing, parking apps like Rover and car-sharing companies like Zipcar can be a part of a diverse, user-centred transit ecosystem that supports broader public interest objectives such as enhanced economic opportunities for citizens, lower costs for consumers, reduced environmental impacts and less gridlock on our roads. Take a breath, because a decision on Uber this spring is only the beginning of a much-needed conversation.