Toronto is looking to become the first Canadian city to recognize new technologies such as Uber as a category distinct from taxis, with its own rules and regulations, as lawmakers around the world struggle to regulate ride-sharing services.
In a report released Wednesday, Toronto city staff recommend updating the city's by-laws to pave the way for a new "transportation network companies" (TNC) category for Uber and other ride-sharing services – a system already used in more than 60 jurisdictions in the United States. The report aims also to placate the taxi industry by promising to lessen the regulatory burden.
"This is the common-sense, realistic way to do it," Mayor John Tory said.
If approved by the city's licensing committee next week, the report will go to council later this month. If council also approves the report, city staff will work with provincial insurance regulators and create new rules.
Toronto is just one of hundreds of cities around the world struggling with the ever-expanding UberX service, which allows ordinary drivers – and not licensed taxicabs – to accept paid fares. Dozens of U.S. cities have already adopted the "transportation network companies" system, and now both Toronto and Edmonton are eyeing similar models. In Edmonton, a draft by-law that includes a new category called "private transportation providers" will be up for public consultation later this month.
Though Toronto's report does not spell out the specific regulations Uber would follow, they likely wouldn't be as strict as the rules that taxicabs face on everything from fare structure to meter design. Taxi drivers also have to complete a weeks-long training course and spend thousands of dollars each year on commercial insurance. Regulations surrounding TNCs, meanwhile, are typically focused on ensuring adequate insurance and driver background checks.
The mayor pointed to an Ipsos Reid survey that showed the majority of residents see Uber as distinct from taxis or limos as reason for separate regulations. That same survey found that, with about 500,000 Uber rides in Toronto in the past year, about 65 per cent were satisfied with their experience – compared with slightly less than 30 per cent for taxis.
"They're different beasts," he said. "The objective is to make sure that while they're regulated in different ways, that they're regulated equitably vis-à-vis one another so that both can compete."
To help taxis compete, the report recommends dropping the mandatory minimum cab fare from $4.25 to $3.25, and looking for others ways to loosen the rules for cab drivers.
Wednesday's report represents a big win for Uber, which has long been lobbying Toronto city council for the new category. In a December, 2014, interview, the company's regional manager Ian Black told The Globe that he believed the TNC model "would apply very nicely to Toronto."
In a statement Wednesday, Uber Canada spokesman Xavier Van Chau commended the report, saying the recommendations show "a thorough understanding of how ridesharing, consumer choice and smart regulation can benefit Torontonians."
But cab drivers criticized the recommendations, saying that a TNC model would "destroy" the taxi industry and create a two-tier system. Taxi officials have, in the past, estimated that Uber has led to a loss in revenues from anywhere between 10 and 50 per cent.
"There's no competing in a market with a company that doesn't have the same rules and regulations that we do," said Toronto Taxi Alliance spokesman Sam Moini. "We want one by-law for all. We don't want two sets of rules."
Sajid Mughal, president of the iTaxiworkers Association, meanwhile, called UberX "a disease," and the report "a slap in the face" to the cab industry. He called for the city to instead ban UberX.
Earlier this year, the city tried to shut down Uber through the courts, arguing that the company was operating an illegal taxi service. That case was dismissed.
On Wednesday, the mayor rejected the idea of banning or trying to shut down Uber.
"I would ask them the question of 'How do they think we would do that?'" he said. "Do they think we're going to be successful at turning back a technology that has been adopted and embraced by hundreds of thousands of people in the city, and in other cities the world over?"