The Fight for Uber
Will the city’s cabs finally face competition, or be shielded from their own customers?
April 30, 2015
I’m at my destination, but my cabbie won’t let me out. He’s got too much to say about Uber. To be fair, I provoked him, asking if he planned to make the move from Yellow if the ride-sharing company sets up here as planned. Almost half of Uber’s current drivers formerly worked for cab or limo fleets, after all, but some drivers (like mine, it seems) are wary. “You hear so much info—some good, some bad. But how can you compare? Cabs and Uber are like apples and oranges,” he laments. “They’re an unregulated brokerage; we’ve got rules to follow.”
Uber proclaims itself to be a tech firm, not a taxi company (and thus exempt from those rules), but Mary Polak, then the province’s transportation minister, sent it packing in 2012 with a threat of $75 minimum fares. Older, wiser, and richer, Uber has now set its sights on a 2015 return to the city, and my cabbie isn’t the only one who sees the $50-million, San Francisco-based company as a threat. The Vancouver Taxi Association declined requests to comment, but its stance has been made clear elsewhere: they’re not happy. And why would they be? With a monopoly on taxi licences that allows them to dictate pricing, of course they’re alarmed that an outsider might provide what Vancouverites so desperately want: cheaper rides that are easier to get.
This city has only 600 cabs, which puts us last in the country per capita. Where we’re first is on the meter: it costs 15 percent more to take a cab here than elsewhere in Canada, according to a recent SFU study. We’ve got other stupidly expensive things to spend our money on, but council is stalling while it figures out a way to keep everyone happy. (It put a hold on issuing vehicle-hire licences last year; that study period is expected to end this month.) In the meantime, the VTA is seeking an injunction to bar Uber from the city, and the Provincial Transit Association has stated its commitment to maintaining “industry health” and preventing “destructive competition.”
If you want to operate a taxi in Vancouver, you need a vehicles-for-hire licence (plus a passenger transportation licence, a chauffeur’s permit, a TaxiHost Pro certificate, a background check, and, duh, a driver’s licence). The city’s cab companies—Yellow Cab, Black Top/Checker Cabs, MacLure’s Cabs, and Vancouver Taxi—buy these, then resell them, packaged with company shares, for up to $800,000; shareholders turn around and lease the licences to drivers for an upfront fee and a percentage of all fares.
The issue with Uber challenging these oligarchs of transportation, say my well-informed driver and the VTA, is that if Uber starts pricing cab companies out of business, it could become the next for-hire monopoly itself. But Jeff Welsher, the company’s general manager for regional expansion, argues Uber may actually increase business for cabs. The Toronto-based Welsher has helped the company set up shop successfully in all of its Canadian markets. (Prior to that, he worked in the private-equity field.) He believes Uber could supplement existing transportation modes—transit, car-sharing programs like Car2go, and yes, taxis. “If you make it easier for someone to get around and get a ride when they need one,” he argues, “some people no longer need to own two vehicles, and it grows the market for everyone.”
In other cities—Ottawa, for example—Uber has carried on despite threat of penalty, but it’s unclear if it will muscle its way into this market without approval. “We’re always looking to collaborate with officials,” says Welsher coyly. “The important thing to note is that over 24,000 signed our petition to appeal to council.” The other 96 percent of Vancouver residents are presumably too busy waiting on a corner in the rain, trying to hail a cab, to add their signatures.