Stephen Rees's blog

I’m sorry that this story comes from a paywalled site. The Globe and Mail reports that Uber has had a meeting with Councillor Geoff Meggs who “said there will be a motion to council this week to freeze the status quo for six months while staff study the issues – past the election in November.” He also acknowledged that this will have to be treated as a regional issue even though “each municipality in the Lower Mainland has its own rules on taxis.”

Mohan Khang of the BC Taxi Association knows he can rely on the Passenger Transportation Board. They turned Uber down two years ago and are highly unlikely to do any different next time. Why? The PTB actually controls who can have a taxi license, even though they are issued by municipalities.

Section 28(1) of the Passenger Transportation Act states that the Board may approve an application if the Board considers that

• (a)    there is a public need for the service the applicant proposes to provide under any special authorization,

• (b)    the applicant is a fit and proper person to provide that service and is capable of providing that service, and

• (c)    the application, if granted, would promote sound economic conditions in the passenger transportation business in British Columbia.

So it actually does not matter what any one city decides to do. The provision to “promote sound economic conditions in the passenger transportation business in British Columbia” means that the established taxi operators’ interest overrule any and all other considerations. Uber could indeed try to satisfy the requirements that there is a need – simply on the grounds that there are fewer taxis here per thousand population than anywhere else in Canada. They could also show that they are working in Halifax, Montreal and Toronto. All the BCTA has to do is point to the impact services like Uber and Lyft have had in cities in San Francisco – where taxi use was more than halved – and the PTB will be obliged to reach the same decision as it did last time.

It has become something of a truism that regulators become the client of the industry they are set up to regulate. That is demonstrably the case with the National Energy Board and the oil industry. While other places have sought to deregulate taxis or to operate on the basis that the public interest in plentiful, affordable and convenient access to mobility services is more important than the survival of existing providers, that has not happened yet in BC. It is not likely to change any time soon.

The people who drive taxis are not the people who drive the industry or the PTB. The people who make significant amounts of money from taxis are those who own licenses. Although these are issued by government they can be traded on the market, and thus, due to their scarcity, acquire significant value. The man (and it is usually a man) driving the cab has to rent the license from its owner. He also has to rent the cab and pay for its fuel, maintenance and access to the dispatch system. A cab driver does not start to earn any money until he is at least halfway into his shift and even then will be very fortunate to clear more than minimum wage. He will do better if his cab also has the even rarer YVR permit – which also means the taxi has to be licensed in Richmond as well of the municipality where it is based.

So for Uber – or anyone else – the task is to get the legislation changed. And while there might well be many people who would like to see that, the people who control the industry also have considerable political weight, not just because they are contributors to party funds but also because they claim that they can deliver votes from the people and communities that rely on employment in the industry. So far as I am aware, no politician in BC has ever tried to test the validity of that claim.

The virtues – or otherwise – of Uber do not matter. The public need for greater access to demand responsive transportation does not matter. Political power is what matters. Geoff Meggs can have as many meetings and as much research as he cares to commission. It will not make any difference to the outcome.

POSTSCRIPTS

I have now seen another post on the same issue from The Georgia Straight – which, of course, isn’t paywalled

The issue of taxi licensing in Greater Vancouver and a possible solution is presented by Ben Proctor in his recent (April 2104) Masters of Public Policy Thesis at SFU. I am indebted to Neil Salmond for this link. The research confirms what I have been saying on this topic. His proposed solution is practical but still requires a politician with considerable courage and willingness to take on a powerful and deeply entrenched private interest group. Both John Horgan of the NDP and Todd Stone in their recent comments regarding Uber show that neither has any intention of changing the present arrangements.

The real issue is that taxis are expensive and not as readily available as needed. Licence owners make a lot of money. Taxi drivers very little – but carry all the risk. Uber ought to be a better system but isn’t. Once again the drivers take all the risk, the company all the profit. Lots of seats in cars are empty: average occupancy of the cars on the road is around 1.4. Most cars are only in use for an hour or so each day. Much of the fleet sits idle most of the time. There are clearly opportunities to make better use of the resources tied up in private cars. The PTB and Uber are both significant blockages on the path to progress towards better, more efficient personal mobility.