Uber Ontario manager Ian Black says the company works to educate officials about ride-sharing, which he considers a means of affordable transportation that reduces stress on roads and parking.Matthew Sherwood/The Globe and Mail
Uber Technology Inc.'s testy relationship with municipalities isn't expected to ease up anytime soon, as the company needs more users to support its rapid growth and rising valuation.
While city councillors, car-service companies and municipal officials across Canada fight over Uber's encroachment into regulated taxi industries, the global company's scrappy government relations style is being driven by unrelenting growth objectives. With an expand-first, ask-questions-later approach, it's aiming to justify a $50-billion (U.S.) valuation to financial backers.
"Uber moving into new markets and trying new logistics endeavours is part of their strategy to prove value to investors," said Nikhil Krishnan, an analyst with New York-based research firm CB Insights, via e-mail. "A large part of coming in without asking for permission is to gain support of users, as well as prove that the demand exists in the first place."
What's the issue?
Across Canada, municipalities are trying to figure out how to deal with Uber's app-based ride-sharing, delivery and car-booking services as the company cuts into the heavily regulated taxi industry. Vancouver fee regulation has effectively banned Uber, while Toronto Councillor Jim Karygiannis has claimed that passengers using the UberX ride-sharing service during the Pan Am Games could face fines of $300 to $20,000.
A private startup operating in more than 300 cities in 57 countries, Uber has plans for a new funding round of $1.5-billion, for a valuation of $50-billion. It has one of the highest sales multiples among private tech companies, and "baked into that valuation is the assumption that the company is going to grow significantly in the future," Mr. Krishnan said.
That's why the company is scaling up around the world, in big markets such as India and China, where this year it plans to spend more than $1-billion. At its headquarters in San Francisco, the company isn't having meetings about Toronto, said lobbyists familiar with the company who spoke on condition of anonymity. It's talking about growth, new markets and more users.
Who's lobbying whom?
Once the company is in a market, it tends to be popular with users and can rally the public for support through digital media. Uber is currently running a digital campaign in Ottawa for its app users to "Tell Mayor Watson Why Uber Matters to You!"
It must defend its business and is pretty much registered to lobby anywhere in Canada where there is a public registry. While there's pushback in some municipalities, the company is trying to have constructive conversations in provincial capitals about ride-sharing legislation to support its service.
Uber is also registered to lobby the Alberta and B.C. provincial governments.
In Alberta, it has hired New West Public Affairs, co-founded by former cabinet minister Monte Solberg, to lobby on the provincial Traffic Safety Act and in B.C. it has hired Maple Leaf Strategies to "encourage an environment that allows Uber to activate their technology in British Columbia," according to the registry.
In Toronto, the company has commissioned firm StrategyCorp Inc., with consultants Amber Crawford, John Matheson and John Duffy among those communicating with the city and elected officials, according to the municipal lobbyist registry.
At Queen's Park and the City of Ottawa, National Public Relations has been lobbying for the company. Chris Schafer, Uber's Canadian public policy lead, has also been active in Ottawa's city hall, according to the registry.
Ian Black, Uber's Toronto general manager, said the company works to educate elected officials about the benefits of ride-sharing, which Uber says is safe, affordable transportation that reduces stress on roads and parking.
"It's really about sitting down with people in positions of policy-making authority to help them understand why increasing ride-sharing is actually a good thing for the community," Mr. Black said.
At the same time, taxi and limo companies are registered to protect their business.
In Toronto, a limousine service company called Super Stealth Inc. has been registered to lobby on Uber since February, where Associated Toronto Taxi-Cab Co-operative Limited is also registered to lobby on taxi licences.
The biggest challenge?
Uber has gotten around municipal fines by offering to pay them for Uber drivers. A bigger challenge is what to do about car confiscations, as has happened in Montreal.
Most importantly, the company wants to avoid situations such as those in Calgary, where limousine regulations prevent Uber from operating, and Vancouver, where a provincial regulator effectively banned the ride-booking service by imposing minimum $75 fares.
Ottawa Councillor Mark Taylor said most large companies consult with local policy-makers to understand the market and the rules before entering a large market.
"I've met with them on several occasions, and you're going around in circles because they're not willing to change their business model," said Mr. Taylor, whose city has laid 76 fines against 37 Uber drivers for issues related to taxi licences.
"The feedback they hear from lawmakers is: 'Well, let's forget, for a moment, about plates and monopolies and all that kind of stuff. Let's just talk about safety and security. We have these very real issues.' They say: 'Yeah, we hear that – and we disagree,'" Mr. Taylor said.
Mr. Black said Uber is increasingly engaging with cities and spending more time working with regulators.
What's next?
Uber wants to make transportation as ubiquitous as running water: affordable, reliable and available to everyone, Mr. Black said.
"It's a priority, in every city that we're in, to become a part of the fabric of the city," he said.