New regulations mean business as usual for Uber, says U of T expert
For months, Torontonians have debated the fate of Uber, even as the taxi industry has threatened protests and the ride-hailing service has issued threats of its own to leave the city. As Uber continued to operate illegally – outside the terms of the current taxi bylaws – councillors and the mayor discussed solutions. This week, after a heated debate, City Council finally approved new regulations for Uber. U of T News talked with Sunil Johal, policy director at the Mowat Centre at U of T’s School of Public Policy and Governance, about the new laws governing Uber and whether these will settle the issue, once and for all.
What will change for Uber? Do the new regulations go far enough in regulating Uber?
Toronto’s new rules will largely mean business as usual for Uber, its drivers and customers. UberX drivers will now be required to file documentation, such as criminal record checks and insurance certificates, directly with the city rather than with Uber as had been the case previously, and obtain a city license. But Uber drivers won’t be required to have cameras in their car, undertake training courses or have rates regulated by the city (other than a small change to the base fare).
What effect these rules will have on the ground transportation system in Toronto is uncertain right now. Taxis have operated in a supply-managed marketplace for decades, and the effects of allowing more cars on congestion, consumer satisfaction, safety and accessibility will take some time to sort out. The City will need to closely monitor these types of issues over the next one to two years and be prepared to make adjustments as needed.
“Indications are that Uber is pleased with the new rules” - Sunil Johal
How have the rules changed for taxi drivers? Is it enough to satisfy the taxi industry?
The new rules reduce a number of mandated requirements for taxis, including the elimination of 17 days of training for new drivers, refresher courses and the need to have CPR and First Aid certification. They also permit taxis to discount fares from regulated rates, and charge higher rates if trips are booked through a smartphone. Any rate reductions would need to be borne by individual drivers rather than taxicab brokers.
These amendments seem to have been designed to win the favour of the larger taxicab brokerages in the city, and also go some ways to removing time-consuming requirements for individual drivers. I expect we’ll see taxi brokerages start to explore the possibility of re-constituting themselves as Private Transportation Companies (PTCs), the classification Uber has under the new rules, as they would have greater flexibility around pricing and fewer costs. More individual drivers will also likely explore driving for PTCs, as their income potential may be higher.
Do you think the controversy ends here or will this continue? Is the city, Uber or the taxi industry still pursuing other issues or regulations?
Indications are that Uber is pleased with the new rules, and I anticipate the taxi industry will take a careful look at how their business model is going to be impacted. Some in the industry who invested in taxi medallions at a cost of $300,000 or more in recent years may still be very unhappy with the impacts of these rules on their investments. The city has committed to studying compensation for medallion owners and this could remain a friction point in the coming months.
It’s interesting to note that City Council actually requested the province step in to regulate companies like Uber. Whether the province wants to get involved in what has proven to be a political minefield will bear watching.
Are similar battles playing out in other cities? Are any of the regulations or new laws interesting enough that you think they’ll influence how other cities deal with Uber?
Toronto adopted an approach that is largely similar to that of many other cities in the US and elsewhere. A number of other cities in Ontario like Mississauga and Hamilton are currently developing approaches to their own taxi industries, and will likely use Toronto’s approach as a starting point for discussions.
For more about the Uber debate, watch Urban Studies professor Shauna Brail's video: