Competition Bureau urges B.C. to ‘level the playing field’ for taxis and ridesharing companies

The federal Competition Bureau is urging the B.C. government to re-think provincial taxi regulations and make them better for consumers and businesses by “applying the principles of competition.”The bureau has put forward recommendations to British Columbia’s all-party committee being tasked with helping to establish regulations for the province’s ridesharing industry.The B.C. government passed legislation last year that has committed to making ridesharing services being available by the end of 2019. But critics have warned the legislation is too restrictive and would discourage companies like Uber and Lyft from operating in the province.“Ridesharing platforms have transformed the ride-hailing industry and revolutionized the way Canadians travel,” Interim Commissioner of Competition Matthew Boswell said. “We welcome the opportunity to make recommendations to B.C.’s Select Standing Committee that will help regulators and policymakers create a pro-competitive environment for the benefit of B.C. consumers.”

The competition bureau is recommending the B.C. government provide both ridesharing and taxi drivers with the flexibility to choose their own service areas, rather than requiring drivers to stay within limited geographic boundaries. The bureau is also calling on the market to determine how many drivers can operate.

“Some groups believe that, without limits on the number of cars for hire, drivers will be less able to cover their costs of operating, and will need to charge higher rates to passengers in response,” the report reads.

“However, an international review of taxi regulation performed by the OECD found ‘little evidence’ to support this assertion. This argument is also weakened by the fact that greater capacity generates shorter waiting times and higher passenger satisfaction, which may increase demand for car for hire services generally.”

The committee is also looking at the issue of pricing. The competition bureau is suggesting to the government that prices should be determined by market forces to “ensure the best outcomes for both drivers and passengers.”

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“When prices are raised above the level that market forces would naturally deliver, this results in real harm to the economy,” the Competition Bureau submission to the committee reads.

“Those passengers with the lowest willingness to pay for the service are pushed out of the market, and forced to go without the transportation choice that is right for them. This results in what economists call ‘dead-weight loss,’ which is a real resource loss to the economy that generally cannot be recouped through other policy means.”

British Columbia will require all ridesharing drivers to get a Class 4 passenger licence and undergo regular criminal checks.

On Tuesday, Transportation Minister Claire Trevena said “it is important that the regulations are created in a way that ensures the safety of British Columbians, and prevents significant growth in congestion like that experienced in other jurisdictions which have introduced ride-hailing, like New York and San Francisco.”

She added a “committee will present recommendations after hearing from a wide range of experts, including input received by the Competition Bureau. I look forward to receiving their report by March 31st.”