A taxi driver protests Uber in Toronto on June 1, 2015.Nathan Denette/The Canadian Press
Spare a thought for taxi drivers.
Caught between the interests of an industry that relies on a feudal regulatory system to make a buck, and the interests of consumers who love the low cost and quick service of ride-sharing services like Uber, they don't know which way to turn.
Should they stick with the traditional model and hope that city hall bans Uber, as Vancouver and Calgary have done? Or should they jump to ride-sharing, as thousands have done in Canada and especially in the United States, where the number of Uber drivers has more than doubled every six months for the past two years?
So far, taxi drivers in Canada have chosen the traditional model. They have led protests in Toronto, Montreal and Ottawa defending the status quo. Their economic success depends on municipal regulations that strictly limit the number of cabs on the road, thereby creating artificial scarcity that results in higher fares. They want to preserve that system; some have even invested heavily in it and stand to lose money if it disappears.
But that's a trap, as a recent white paper from the Competition Bureau of Canada explains. The old way never kept up with demand, thereby dooming it. The arrival of Uber has led to a surge in users who were deterred by the high prices and poor service of the traditional model. According to a new report by the City of Ottawa, Uber prices are 36 per cent cheaper than the average taxi fare, and the average wait time for passengers is under four minutes, compared to between five and 15 for a regular cab.
Taxi drivers are in a real bind. Their loyalty to the old model is not surprising, but it works against the public interest. Worse, it harms their own self-interest. The Uber model for drivers is more efficient, less expensive to get into and provides participants with more control over the prices they charge and the hours they drive.
If they thought it through, cabbies would abandon the current model and push for one that, as the Competition Bureau says, has the lightest possible regulatory touch, and whose regulations are the same for all drivers, old or new. Don't limit entry into the market and don't set fares; do require car inspections, police background checks and a reasonable level of insurance.
In other words, make taxis a lot more Uber-like, and Uber a little bit more taxi-like. That's the right balance.