Next up for Uber in Canada: regulation, somehow
WATCH: Cab companies in major Canadian cities are gearing up for a fight against Uber. They say Uber does not play by the rules because neither its cars nor its drivers need to be licensed. But critics say rigid licensing is precisely what ails the taxi industry, giving only a small number of stakeholders the power to control market. Laura Stone reports.
OTTAWA – Julia Rennalls has strong feelings about Uber, the worldwide smartphone app that lets her request a ride at the tip of her fingers.
“I love Uber. It’s fantastic. It’s quick, it’s convenient, it’s great,” she says.
The 31-year-old Ottawa store manager uses the app twice a week instead of calling cabs.
Uber allows users to get rides from private drivers, with no conventional cab companies involved.
“It’s much cheaper than a typical taxi ride, and they also do promotions all the time, which is a huge draw for me,” Rennalls said.
Local governments and taxi companies are less enthused.
Cities across Canada are struggling to regulate the service, which operates without expensive taxi licenses or permits.
Some politicians have argued Uber is operating an unlicensed taxi service. Uber, for its part, argues it’s a technology company, not a cab company.
There also continues to be disagreement over whether Uber drivers are employees entitled to benefits (as one California tribunal found) or independent contractors (as Uber contends).
It now operates in six cities and 20 municipalities in Canada, and 300 cities worldwide.
Drivers can work part-time and select their own hours and don’t have the same insurance or inspection requirements as cab drivers.
The service is now under review by city officials in Edmonton, Ottawa and Toronto, with some drivers being ticketed in the meantime. In Ottawa and Toronto, 76 and 72 charges have been laid, respectively, for not carrying the proper licenses and approvals.
Toronto recently lost an attempt to halt Uber’s operations through a court-ordered injunction.
Uber’s general manager says he supports regulation, as long as there’s more leeway than taxis and limos.
In Chicago, for instance, there’s a new licensing category for Uber drivers that includes background checks and insurance.
“There is a place for the regulation of this industry. And as we create these regulations, they should keep in mind that ride sharing is very different than traditional taxis and limousines,” said Ian Black.
“It’s very important to allow for innovation to continue to happen in this space, so flexibility on fares, flexibility on supply, flexibility for new business models.”
Uber was fined $7.3 million and ordered to stop operating in California for failing handing over enough data to the state. The company says it will appeal.
“The bottom line is they don’t follow the rules. All of our drivers are licensed, our cars are licensed, inspected, we’re properly insured and we follow the regulations,” said Marc Andre Way, president of the Canadian Taxi Association.
Way estimates it costs around $2,500 a month to work as a taxi driver.
“Your day-to-day costs is expensive. Your vehicle has to have security cameras, meters, radio, all the communications pieces.”
Toronto councillor Jim Karygiannis has been a vocal opponent of Uber. He says it has nothing to do with receiving $7,600 in 2014 campaign donations from the taxi industry.
He now alleges Uber isn’t charging HST. The company, for its part, says it’s up to the drivers to collect it.
“It seems that Uber wants to avoid the rules and regulations, they demonstrate this time and time,” he said.
For her part, Rennalls hopes regulation doesn’t change the way Uber operates.
“I would really be worried that it would become that big machine, as opposed to the nice quaint app it is now.”
© 2015 Shaw Media