So last week the B.C. Passenger Transportation Board (PTB) effectively shut down Uber in Vancouver by compelling the rides they arrange must charge a minimum $75 a trip, regardless of distance. Shortly after being announced, twitter lit up as Uber notified its customers of the decision and the hashtag #UberVanLove began directing angry (and deserved) tweets at government officials.
My thoughts on all this are evolving but I think the PTB has made a poor decision and hope that a compromise can be found.
Here’s a long piece explaining why.
Uber is different. Most people think that Uber is simply a new middleman, trying to cut out the current dispatchers (or work with them). This is not true, they are much more than that. As you can read in this Time magazine article, Uber is not just about connecting riders with drivers. For example:
Abyzov says the company has a “science team” working on dispatch algorithms to produce a predictive heat-map that helps local car companies and their drivers better anticipate rider demand. “We’re helping our partners build successful small businesses,”
So let’s be clear. This is about a learning company that is figuring out how to preposition cars in neighborhoods because it can anticipate demand. As far as I know (or have experienced) There is no taxi or town-car company in the lower-mainland that is even thinking that way. And this type of thinking has big implications. In San Francisco, it means the average wait time for an Uber car is 3 minutes.
Think about that for a second (I’m looking at you PTB).
This means that:
- Efficiency: People are getting around the city much faster – increasing their productivity. For a city trying to compete globally, this matters.
- Reliable: I’ve had taxi companies not commit to send me a car when I’m not at a fixed address because they assume I’ll hop in a roaming taxi before the one I ordered arrives. Because Uber let’s you rate the taxi, but also lets the taxi rate you, it increases the reliability of both taxis and passengers. This means fewer taxies chasing passengers who aren’t there, and fewer passengers left stranded by untrusting dispatchers.
- Fewer cars: People are much more likely to get out of their car (or not own one at all) if they know they have reliable alternatives. Public transit and car sharing are important to this, and a highly effective car service, available at one’s finger tips would be a powerful addition to the mix. Speaking of reliable: a 3 minute average is pretty god damn reliable. Certainly more reliable than the taxi experience many receive in Vancouver.
- Greener: Pre-positioning cars in neighborhoods where you can predict demand means fewer cars trolling for fares. In addition, because they are nearer to their fares, Uber cars are doubly more efficient. This means fewer carbon emissions. Also, more Uber rides means less pressure on downtown parking and, as I mentioned above, possibly fewer cars on the road.
- Serve more neighborhoods: When you can predict demand it means you’ll better serve those pesky “under-served” suburban neighbourhoods Rather than having everybody chasing fares in the busiest part of town, you can be more strategic about how you deploy your cars.
- Convient: Using the app is just easier. I can order a taxi in a crowded bar without having to talk to (and thus be misheard) by the dispatcher. As a user, the thing I’ve loved most about Uber is that when you book a car, you get to see where it is. So rather than relying on the dispatcher “assuring” you the car is only 5 minutes away, you can see on the make exactly where it is. (This is a bonus for those with awkward addresses, I’ve actually guided lost drivers to my location when I’ve been in a complicated cul-de-sac).
The other mistake is to assume that Uber is about town cars. Here in Vancouver the cosy oligarchy of taxis companies – and (from what I understand) the complete lack of independent taxis – means that they don’t want to work with Uber. And yet, while I’m an Uber user I’ve actually only used its town-car service once (to try it out), I mostly use Uber for taxis – while traveling on business in Toronto. Again, there are benefits.
- Foreigner friendly: As someone less familiar with street addresses in Toronto, and totally unaware of taxi phone numbers, Uber locates me and brings a taxi to me. I don’t have to know much about my address. This makes it exceedingly tourist friendly. In addition, drivers are rated… so I can choose not to use poorly rated drivers – a major benefit. Last time I checked, tourism was big business in Vancouver. Wouldn’t it be nice if we made our city even easier to navigate for tourists?
- Better for independent drivers: While some observers rail that Uber is a “foreign firm” it could be a valuable supplier for independent taxi drivers (were we to have any). As such, it might support a broader taxi driver community, one that was not beholden to one of the four players in our market. That, one would think, would be good for taxi drivers (but admittedly, potentially less good for big four companies who presently can take $522 taxi license the city issues and then resell it to drivers for $250,000-$500,000 per shift. That’s a pretty serious mark up. And while I’m sure it is great for the taxi companies… it is less clear to me how the city government, taxpayer, taxi user, or taxi drivers. Feels like a lot of lost tax revenue, or expensive barrier to entry. Heaven forbid we break up that arrangement. For more on the shady world of the taxi business in Vancouver, I suggest you read this excellent article by Luke Brocki.
The PTB should engage Uber and find a compromise because you know, I know, and everyone knows, that the types of innovations I describe above aren’t going to emerge organically out of the taxi industry in Vancouver (or, in any city for that matter). Kill Uber and you kill any incentive for the taxi industry to engage with the future. And frankly, that’s a pretty crappy outcome for everyone who takes taxis.
But, it gets worse. The PTB needs to know that failing to engage in Uber won’t make this problem go away. Uber is a downright straightforward problem/opportunity to manage. What is the PTB going to do when Hailo, Lyft, or SideCar elects to expand to Vancouver? Will we have to sit back and watch with envy as Torontonians, New Yorkers, San Franciscans, Londoners, Washingtonians (the list goes on and on) and others enjoy these services?
I’m not saying the PTB should accomodate Uber, I’m saying the PTB needs a strategy to accomodate a whole wave of innovators that are going to descend on the transportation business. Uber is just an opportunity to being figuring this out. Sticking your head in the sand isn’t going to make these issues go away. More disruptive alternatives are on the way. You’d better start engaging this stuff today, while we passengers only hate you a little bit.
Vancouverites deserve a world class taxi and town car service. One that innovates and offers world class service. Today we have a company that is trying to do that, and more that are likely on the way. It would be nice if we had a PTB that worked with them rather than against them.
Some Additional Thought and Caveats on this Piece and this Issue.
1. Minister’s Response.
To describe the response by the minister responsible, Mary Polak as disappointing would be an understatement. Given she appoints the PTB and likely has some influence, she washed her hands of the issue so fast it she has little interest understanding what is actually going on. (For those who are upset at the PTB decision, I’d focus your tweets at her – particularly as she has gotten off relatively lightly.). My hope is that her, or someone in her staff, will see this piece and see that this issue won’t be going away, it is going to get bigger.
2. Some Thoughts on Uber
For those who who don’t like Uber and those interested in a little history:
Firstly. Yes, I am aware that Uber founder Travis Kalanick is a both fan of Ayn Rand and a fairly uncompromising person. Personally, I’m not a fan Ayn Rand’s writings. I think her books are terrible and that her understanding of how markets and society work (to say nothing of human relationships) is deeply, deeply flawed and certainly lacks nuance. And while some people use this as a basis to write mean articles about Kalanick I think it is a pretty poor line of attack. While I may disagree with its founders ideology (if that is what it is), I’m much more interested in the company’s impact and business model.
In regards to Kalanick being hardheaded (or other, less flattering descriptors), I’m aware of that too. Of course, the people who judge him are usually those who have not tried to do a start up, much less one that tries to alter a sometimes more than 100 year old industry that does not always benefit consumers (or its drivers). Do I agree with Uber’s approach? Not always. I think they screwed up badly in New York. At the same time, in many cities, I think they have had little choice. The current operators – who, let me remind you, compose a market oligarchy – are not exactly interested in innovation or new entrants. If you are going to try to change the way taxi service is delivered… being hardheaded is probably a job requirement. The fact that some taxi companies go after them is not a sign of them being a bully, it could be a sign that they will make the market place more competitive. Nor do I think that they mobilize their users makes them a “bully.” I find it interesting to contrast Uber with the case of PickupPal, a Canadian company that was equally at odds with similar transportation rules and who also started a massive petition (and ultimately had the law changed – much to the chagrin of bus companies). It’s noteworthy that PickupPal is not portrayed as the bully and is indeed celebrated as the triumph of the consumer over the vested interests of the status quo players.
3. Other Reading
Finally, Karen Fung has a good piece about the complexity of transport policy that I don’t really think makes the case for not letting Uber into the market, but is worth the read.
Also, as I mentioned in the piece, Luke Brocki’s piece, Taxiland, is definitely worth reading.
4. Poorly Formed Tweets
Oh, and I was disappointed to see this tweet by a journalist who I normally find quite thoughtful. A desire for more buses and for services like Uber are hardly mutually exclusive. Indeed, trying to pit the two options against each strikes me as downright counter productive. I’m in favour of all solutions that make increase options and diminish the dependency on car ownership. I’m happy to pay more taxes for better bus service, and at the same time, Uber strikes me as another (low cost) way to spark innovation and increase options.
Taxis. They’re taxis.
Oh, and also, good piece.
Great piece, David. This is one of the most thoughtful pieces on the subject of cities vs. Uber I’ve seen.
Interesting piece, but out of touch with reality. First of all there is the basic problem everybody is ignoring. Uber entered the market illegally and hoped that bully tactics would get them a place in the market. If their product is so wonderful, why didn’t they come into the market legally ? They knew the rules, but chose to ignore them.
Several other dispatch options are also mentioned as a possible problem down the road………guess what, won’t happen. Hailo could come into this market and they would, under their current business model, have no regulatory problems. Lyft would also be legal, though they might have a bit of a fight.
Uber does not provide any benefit to limousine/sedan operators under the current regulations. Changing them to allow current operators to operate at Uber rates is a fast trip to the bottom for the industry. In essence what Uber managed to do for the industry is allow the PTB to identify carriers that were already operating illegally. Before Uber they were truly under the radar.
Another point to consider, why should I give up $75.00 an hour with one trip, to make $50.00 an hour with three or four trips ? I’m going to bust my ass because some chump wants caviar service at hamburger prices, not going to happen.
It is interesting to me that this comment is written from the perspective of the industry. I get the perspective, but it isn’t clear to me how cheaper fares are not in the interest of the consumer.
This is not a call for complete de-regulation, but if there is downward pressure on rates, from a consumer perspective that is not necessarily a bad thing.
The PTB operates/issues licensing on a basis of “Public Need”. Taxis are needed to fill a gap between Public Transportation and Private vehicles. LImos are a discretionary service. They don’t fill a “need” they fill a “demand.” You’d still get married even without a limousine.
The PTB also takes the position, that competition is good, but destructive competition is bad. For that limousine industry, that horse has left the barn courtesy of that dimwit Keven Falcon. The Act that he introduces created two classes of limousine based on seating.
Consider that your regular limousine based on a car chassis is regulated as to territory and rates, a minimum of $85 per hour, but the big SUV limos have no such restrictions.
This has nearly driven the regular limos out of business, so they started to low ball to compete, go out fighting as it were. The Sedan operators had the Airport “Limos” to compete with, they have a special low rate, so they also started low balling to survive.
In essence we already have a slow slide to the bottom in place courtesy of legislation. Big companies can survive this, since most of their business ins from out of Province. The small operators that rely on local business can’t, that’s why they scrap what they can.
The bad is this, vehicle maintenance goes first and there goes public safety. Our vehicles have to pass an inspection every six months, and they are not cheap to repair. We can fail for something as simple as a cracked tail light. You can glue it, we can’t. Little things add up. There were already carriers out there with Uber that were using vehicles that looked good, but couldn’t pass our safety inspections, so they became drunk packers.
The industry as a whole didn’t ask for the rates that are in place, they were imposed by the Board. Remember there are maximums in place as well, like $150.00 per hour for the Sedans.
You listed a number of great pros that I hadn’t considered about the situation. The fact of the matter is, is that taxi service (and late night transit) are not reliable options. On any given weekend night, you may end up waiting an hour for a cab to only go from downtown to kits. With services like Uber, who are providing service only to those that live within Vancouver-proper, it’s freeing up taxis for those who need to travel further.
Interesting benefit. Hadn’t thought of that.
Erin, think a minute.the major complaint with taxis, besides not being able to get one, is that they refuse to do the longer trips out of Vancouver at night, so your argument is ass backwards. No taxi will refuse you a trip to Kits when you come out of the Roxy at 2 A.M., but they sure as hell won’t want to take you to New West or Surrey. Dropping you in Kits means they are still in the money, out in the “burbs” they can’t touch a trip till they are back in Vancouver and there is not a lot of activity in East Van at that time of the morning.
Gunter – can Hailo operate there? My taxi driver told me that he can’t accept dispatches from other companies.
My understanding is that legally, if they got a license (I’ve no idea how hard that is), they could. However, I suspect that the cab companies would pressure/order their cabs to not use them. Would be interesting to see what would happen.
Jon / David, Hailo can legally operate in Vancouver and all they need is a business licence, if they set up an office. What the cabbies can’t do is accept dispatches from other taxi companies. However you, like many others may have noted that cabbies like their cellphones. They can accept calls from clients directly, so Hailo would be a step up from that. By the way, you’d be surprised how many of the good drivers actually have a personal client base the service apart from the dispatch system.
Keep in mind Hailo would in fact be a benefit to the taxi companies. The more drivers that are dispatched through Hailo, the fewer call takers and dispatchers are needed, and those folks are union.
If you have heard that Hailo had issues in Toronto, they have different regulations.
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It’s always sounded to me like Uber’s business model is to do to the cab industry what Napster did to the recorded music industry, Craigslist is doing to the newspaper industry, your basic advance in disintermediation. Each of these is marked by a noticeable drop in quality along with drops in cost. Anyone have data for cities where uber (and similar companies) operate comparing accidents per passenger-mile for these 21st-century jitneys vs. traditional licensed cabs & limos?
Good question Eric – I think the service is too new to have any data like that. Probably San Francisco would be the best place to look.
Of course, you’d need to adjust for the size of the fleet. There are now something like 60-200 more town cars operating in San Fran because Uber has made it profitable for them (so I understand).
Uber increases the credibility of the industry via the rating system: after a trip, utilizing a five star rating system, the client gets to rate the experience on their app, and the driver does the same for the client. Does the taxi industry care about customer service? Do they really heed customers concerns and follow up on any complaints? No way. You know why? It’s called entitlement. When you have little to no competition, customer service drops! A free market fosters competition and those companies who succeed in that market, keep each other honest and are always striving to better themselves, to stay ahead of the competition. The customer benefits, because they get a superior product. The companies benefit by employing loyal employees, who are proud to offer a great product and represent the company in the best possible manner. Re: Gunter and “ambush” tactics? The industry itself is being ambushed by a select few companies who enjoy a monopoly, under the protectionism served up by the PTB and their over regulation. Also about working for $50: well, if you can average that per hour for a 10 hour shift? Very doable. The alternative? Sit at home and hope a client calls? A strong business model coupled with a strong work ethic succeeds. Uber is just what his industry needs. And I am proud to be a part of it. But, don’t ask me! Ask the thousands of loyal customers who signed up in a few short months. Wow, what a shake up! Mr. Sahota recently talked about Uber being a threat to the industry. What he was implying is that Uber is a threat to the monopoly Well, the industry is fast changing. Uber is at the forefront. Whomever joins will benefit. Whomever resists change will end up just like the horse and buggy, shortly after Henry Ford introduced the Model “T”!
Taxi complaints, 1-888-564-9963 or contact Consumer Protection B.C. through their webpage. They are dealt with. Also, have you heard of Taxihost?
The industry has not been “ambushed” by any companies that enjoy a monopoly, though we have been led down the garden path by politicians, and various political hacks that generally tend to ignore industry imput. However, by talking to us even though they ignore us, the powers to be can always claim we were consulted.
If Uber could put $50.00 an hour into my pocket, after they have their bit, then I might agree with you, that Uber is what this industry needs. Truth is they can’t, because the demand from the public is not there and it never will be.
You say you are proud to be a part of it. Part of what? The industry, or the client group?
I say put the choices out and let the consumer decide. The taxis system in Vancouver is terrible. The drivers, car quality, availabilty and discriminatory highering practices within the taxis companies had turned me complately off and I want a better choice I willing to pay more for. $75 as a minium is completely unreasonable for a service which is not a limousine. Town cars, sedans, and SUVs are not limos. I am really starting to hate this city and province. Its so primitive, backwards thinking and short sighted. Marry Polak is simply not doing her job of which we pay her 6 figures for. Remember uber was MORE then taxis, so it wasnt pushing the price down, but rather providing an superior options to taxis for a price premium. If the disparity of price isnt enough perhaps its time taxis companies make the cars/service a little less crappy, rather then stomp on something like Uber which offered what I consider reasonable value?
Really ? Uber offered nothing except a method by which limo operators that were already operating illegally anyway, were able to connect with a broader client base. These operators made the choice that more illegal trips at even lower rates then they were already charging, would balance out based on volume.
By the way, Town Cars are Sedans. Also, the MVA defines all vehicles for hire with a capacity up to 10 passengers as taxis, including limousines.
This industry does not exactly operate like a regular business. While every sector has its regulations that in theory serve the public good, this sector has another purpose. Getting elected. Generally our business operates under the public radar, and we are ignored by the Government. While you see a lot of limousine services around it is not a big industry, unlike the taxis where you don’t see as many as you would like, but it is a much larger industry.
Our industry has gone through regulatory changes, not always for the best, for us or the public. In fact, I suggest the main consideration for changes has been to protect the voting block and source of campaign funds that keep the politicians elected.
The taxi industry is controlled by the Indo-Canadian community. I am sure most of you have heard that the support of this community is essential to getting elected in most parts of the Lower Mainland and Fraser Valley.
The main reason the current rates exist is because, when sedans were first allowed into the market, the MCC now PTB decided that a minimum rate of $65.00 per hr. minimum was required to “differentiate” ( read; protect ) sedans from taxis.
Keep in mind that in the Lower Mainland a single taxi is worth between $200,000.00 and $700,000.00 depending on the company and municipality you are working in. You can buy an entire limousine company up to 10 vehicles for that kind of money. When Christy Clark ran against Sam Sullivan to be the party candidate for Mayor of Vancouver, the taxi industry donated $15,000.00 towards her campaign. They also supplied free taxi rides for her supporters getting to the polls, which by the way is a violation of the Passenger Transportation Act. She still lost, and though the violation was reported, it was never acknowledged or investigated.
You really think that any politico, or political hack is going to change or recommend changes that will have a negative affect on the taxi industry ?
This industry is affected by Federal, Provincial and local regulations. Federal covers mostly safety and NAFTA issues. Provincial and local regulations cover what, where, how many and how much. That is manipulated by money and votes. We are also affected by YVR regulations and demands. That isn’t affected by votes or money so mach as, what makes us ( YVR ) look good. If it’s good for the public or not is irrelevant, as loong as it’s good for YVR.
The transportation marketplace is not that simple and Uber is going to need a lot more public support then what they have now before their business model gets a second look. By the way, if you think this is a Liberal thing, it’s not. The NDP are just as good at kissing ass. Think back to Sahota, current NDP Party boss and his stunt in support of Herb Dhaliwal and the airport limousine service, Paul Gill and Kimber Cabs, Lalli and Local Minibus……………..
Sorry, a quick correction…….should read,.. “differentiate” ( read, protect ) taxis from sedans.
Local taxi companies now have their own mobile apps coming out this year that allow customers to order and track cabs from your smart phone..For those who have some sense of customer loyalty we can stay with our cab companies of choice without paying a premium.
I respect that taxi companies have to abide by certain regulations, that are basically in place to protect us, the customer, so I feel more comfortable knowing that the driver picking me or my mom up is regulated vsUber who takes on no responsbility for service levels or if any issues arise.
The apps you refer to have been around for awhile, so maybe you might want to question your cab company why they have not been put into use before this hit the fan with Uber. One of the issues people have with cabs is the difficulty in getting one during certain hours. If you decide to maintain brand loyalty by way of app dispatch, then it is going to get even more difficult.
The alternative is something like Hailo, where all the cab companies are represented which results in a much wider choice for you, and makes it easier to connect.
As to the vehicles used by Uber, they are/were just as regulated as the cabs, it’s just that Uber and the carriers they worked with choose to ignore the rates set by those regulations.
Something else to consider………
The PT board did not refuse Uber a PT license, it shut them down for operating without one, and without a PT license and appropriate insurance for a vehicle for hire, Uber was acting irresponsibly and illegally.
I would sooner trust a restored Limo made prior to the 70’s than any newer one! And htey are cooler, like a 54′ Caddy limo I once rode in! Not as much electronic junk,sensors and PCM’s to short out or send fuel the other way like what happened several years ago in a car fire, I think it was also a Limo, made in the 80’s. Glad the women got out ok! What a scare!
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