Trevor Melanson: There is no hope for Vancouver’s taxi industry
Home of Canada’s most expensive cab licences, Vancouver will see its plate prices fall the farthest of all—with or without Uber
March 4, 2016
The ongoing Uber wars aren’t about to end any time soon, it seems. In December, Toronto’s taxi drivers took to the streets to protest UberX, the company’s lower-cost option and one that many cab drivers say is skirting regulations and killing their industry (and their ability to earn a living in it). Consider the fact that between 2012 and 2014 the estimated value of a taxi licence in Toronto dropped from $360,000 to less than $100,000. Much of that had to do with Toronto merging its two-tiered plate system, but Uber has received its share of the blame.
That price drop is nothing compared to what Vancouver cabbies are in for. Vancouver doesn’t have Uber yet, and council is in no apparent rush to change that (though the province recently warmed up to the idea), but it may not matter much. After topping out in 2014 at $800,000, the value of a taxi licence is already dropping because of the mere threat of Uber, according to the Vancouver Taxi Association’s Carolyn Bauer. Yes, $800,000, a price tag that’s far beyond anything ever seen in Toronto. It’s nearly what they’re worth in New York and substantially higher than any other city in Canada. Over-regulation has led to too few cabs on the road, but it’s also why a taxi licence in this city has increased so much in value—and why it has so far to fall. And make no mistake: it will fall.
While Uber may be public enemy number one (for cabbies, anyway), the tech firm is just the most visible manifestation of an unstoppable shift. There are other reasons, after all, why the value of a Vancouver taxi licence might be in decline. Car2Go, a taxi alternative, doubled its fleet size this past summer, while BCAA’s version, Evo, launched months earlier. And while self-driving cars are still a decade or so away from replacing human-driven taxis, the threat they present to the industry’s business model is clear and inescapable. Even GM, a company that’s been in operation since 1908, sees the writing on the wall. In January, GM invested $500 million in Uber competitor Lyft to co-build a network of self-driving cars.
According to Peter Nowak, a Toronto-based technology journalist and author of Humans 3.0, the protests over Uber are “small potatoes” compared to what’s coming next. “Self-driving cars are going to inevitably change everything,” he says. “If taxi drivers think UberX drivers are eating away at their livelihood, they haven’t seen anything yet.” As for Vancouver, home of Canada’s costliest cab licences? Just ask Icarus how rough the landing was.