Gord Perks is a Toronto City Councillor
Recently, Toronto followed U.S., European, and Canadian cities by taking legal action against taxi company Uber. Opinion writers and editorialists claim this crushes a shiny new app technology and business model. They've missed the point. Uber is actually in trouble for old and ugly business practices.
Many Toronto cab companies already take app bookings. Some commentators want more: app-only companies should be able to compete in our market. Fair enough, and also entirely legal.
Hailo – an app-based European company – recently took a run at Toronto and other North American markets. After two years it backed out. Was regulation the problem? Nope. Hailo had the $300 brokerage license, and stable of licensed drivers taking their bookings. Hailo execs said marketing costs were proving prohibitive. It can be hard for a new brand in a mature market. That's a business problem not a regulatory one.
Uber, which has been valued at $17-billion, won't pay the $300. Rather than doing the hard work, it cuts corners and ignores the law.
Insurance: A San Francisco family is suing Uber after a driver struck and killed their child. Uber says not its problem, the driver wasn't on its clock. The family alleges the driver was searching the Uber app for a customer. Toronto's licensed drivers carry commercial insurance so they're covered when cruising.
Driver screening: It's claimed the San Francisco driver had prior convictions. Toronto screens criminal and driving records before issuing taxi licenses.
Gouging: Uber sometimes uses "surge pricing" on holidays or in bad weather. This is a no-no. Most cities (including Toronto) set taxi rates. Regulators make a deal with taxi companies: if we let them charge for rides on public roads, they can't hold you to ransom at 3 a.m. on a lonely street in winter. Transportation systems aren't something you comparison-price at the mall.
Customer safety: Because Toronto grants and can revoke licenses, we can keep bad drivers off the streets. By using unlicensed drivers Uber takes that public power away.
Denial of service: There are good reasons for denying service – violent behaviour; and bad ones – you have parcels, or a disability, or loud children, or the driver doesn't like your kind. If the City asks, licensed taxi companies must explain denials. Unlicensed Uber evades this rule.
Employment practices: Canadian provinces (except B.C.) don't extend employment standards to cabbies – no sick days, no limits on working hours, no benefits, no minimum wage, no job protection. Toronto and other cities use the licensing system to put some restrictions – like shift lengths – on brokers' treatment of drivers. Uber drivers aren't protected.
When Toronto recently reviewed its taxi regulations, city council asked the province to consider extending employment protection to cabbies. We're still waiting on Premier Kathleen Wynne.
Privacy: Taxi companies have your credit card, your phone number, know where you live, and where you travel. U.S. Senator Al Franken recently wrote Uber asking about their privacy safeguards. Uber hasn't yet replied.
Competition: CNN has reported that Uber-affiliates have placed thousands of fake orders with a rival taxi company. Far from improving competition this tactic aims to break competitors and regulators alike.
Let's look forward. Toronto app company Gata Labs has broken into several Ontario markets, and are reportedly eying Toronto. Its website proudly proclaims they work only with licensed taxis because it's safer for customers. Soon, a company like this will take off in Toronto without putting consumers and workers at risk.