Toronto is considering implementing new guidelines which may allow unlicensed taxi-hailing service UberX to begin operating in the city – one of which is to ensure that all drivers are properly insured.
“Today, we’ve taken the first step forward to first bring Uber inside the law and regulate it,” Mayor John Tory said at City Hall on Wednesday. He reiterated his belief that Uber’s popularity is here to stay, and said that he supported the new licensing staff-report that is being considered.
Under the proposed plan, Uber will have to register as a taxi brokerage and can operate vehicles under a brand new category called “Transportation Network Company.” But, for that, the company will need to ensure that all vehicles have adequate insurance and undertake driver record screening, criminal background screening and regular vehicle inspections. The TNC is modeled after examples in the US.
The Financial Services Commission of Ontario hasn’t informed the city whether there are any insurance products relevant to Uber in existence. While Uber has claimed that all UberX drivers are insured, the city isn’t convinced.
If the staff report passes in its current form, Uber will have to become a brokerage in order to legally operate UberX in Toronto. For UberX to continue in its present form, the city council will need to pass a bylaw which will take at least four months, and probably longer.
Uber Canada released a statement welcoming Toronto council’s report.
“It’s great to see the thoughtful leadership City staff have shown in crafting this report, which has a thorough understanding of how ridesharing, consumer choice and smart regulations can benefit Torontonians,” the statement by spokesperson Xavier Van Chau read.
“Having facilitated more than 4 million ridesharing trips in Toronto in the last year, Uber has become a choice local riders and drivers depend on. Given this scale, we recognize the need to be regulated and Uber is fully committed to work in partnership with the City in helping adopt and implement ridesharing regulations.”
But, the city’s taxi industry is not happy with the move to regularize UberX.
Sam Moini of the Toronto Taxi Alliance said, “This will kill us. This report is absolutely the death of the taxi industry.”
“Creating a new license gives an outrageous advantage to the Uber taxis... The report will kill 10,000 full-time drivers and replace them with part-time Uber X drivers. They will be competing for crumbs rather than a piece of the pie.”
Moini questioned the decision to implement a two-tier system when UberX and regular taxis provided the “the exact same service.”
“We need one system, one bylaw for all,” he said.
The staff report also recommends ways to help the taxi industry which, according to estimates, has lost 50 percent of business. It proposes to issue 100 additional licenses and more notably, the reduction of the initial taxi fare from $4.25 to $3.25.
But, the taxi industry doesn’t believe that these measures level the playing field. Cab drivers fear that UberX drivers will have an advantage since they won’t face equivalent requirements like roof lights and meters.
Mayor Tory said that Uber’s entrance is an inevitable disruption.
“When these disruptive technological changes take place it is not easy for those involved in that industry,” he said. “We’re working very hard to relieve this burden. One of the purposes of this regulatory reform and modernization is to create a more realistic and viable set of rules to help the taxi industry remain viable. It is not the government’s role to regulate Uber out of existence or to ban it. I don’t think a ban is in the zone of reality... At the same time, Uber cannot operate as if this is the wild-west. There have to be regulations in place.”
The report will be discussed by Toronto’s Licensing and Standards Committee on Sep. 16 and could go to council by Sep. 30.
