Denley: It’s time for Ottawa to deregulate the taxi industry to compete with Uber on flat ground.

Mayor Mark Sutcliffe and Ottawa City Council members have an opportunity to right a wrong first committed by his predecessor over 50 years ago and perpetuated by every council since. Unfortunately, it took him eight years of legal work to get to this point.

Last week, Ontario Superior Court Justice Mark Smith It was determined that the city was at fault. When Uber began operating in Ottawa in 2014, the city’s failure to enforce the City of Ottawa Taxi Bylaw harmed the city’s taxi industry. This was an obvious and correct conclusion.

Article Contents

Article content

Hanif Patni, vice chairman of taxi firm Coventry Connections, said taxis currently account for only 25% of the company’s overall passenger transportation business. The number of taxis has fallen from his 2,000 before Uber to just 800. His city-issued taxi license plates, which once sold for $300,000, now sell for as little as $10,000.

That’s why the driver and license plate owner filed a lawsuit in 2016 seeking $215 million in damages. Judge Smith did not immediately assess damages in the case, giving the city and the taxi industry time to reach a mutually satisfactory settlement.

Part of the deal would include the end of the cumbersome supply-control system that has governed Ottawa’s taxi fleet since 1971. Anyone wanting to drive a taxi in Ottawa would have to buy a plate from someone who already has one – or rent one from them. The city would only allow a handful of new plates, but the number would be determined by Ottawa’s ability to figure out how many taxis it needed. The oft-repeated justification was that too many plates would prevent all drivers from earning an adequate income.

Article content

of City taxi ordinance has regulations regarding all aspects of taxi operations, including the age of the vehicle, the size of the vehicle, and the fares charged. All taxis must be equipped with cameras, all drivers must be properly dressed, and no personal items may be carried in the vehicle. The list goes on.

The taxi industry accepted the rules in exchange for protection from competition. Then Uber came to town, claiming that the city’s taxi ordinance didn’t apply to it and that it was actually a technology company, not a taxi company. We just use an app to connect drivers and riders.

After Uber announced its intention to waive the city’s taxi ordinance, the City Council had two defensible options: It could deregulate the taxi industry to allow it to compete fairly with Uber, or it could try to force Uber to play by the city’s rules, as the taxi industry has done for decades.

Instead, city politicians have chosen to kowtow to Uber and allow Uber to operate as it wishes while continuing to over-regulate the taxi industry.

Judge Smith ruled that the city should have upheld the ordinance — the smarter approach then, and now, is to deregulate the industry and allow traditional taxi companies and ride-sharing companies to compete on an equal footing.

Article content

It’s time for this council to finally do what its predecessors failed to do and treat the taxi industry like any other business. The goal is to establish an absolute minimum regulation. These include a valid driver’s license, insurance, acceptable driving record, criminal background check, and vehicle safety check. That’s what the city is asking Uber operators to do now, and since Uber dominates the market, customers apparently accept it, too.

If the city’s supply management system collapses, taxi license plate holders will have to receive compensation. It’s natural to think that when they spend a fortune on a plate, the city will enforce its own rules.

The ultimate goal should be a settlement that leaves the taxi industry in a position to compete with Uber. It would be completely irrational to regulate every aspect of the taxi industry, but let Uber operate like a normal business. It’s time to right that wrong by bringing real competition back into the market, rather than trying to regulate Uber.

Randall DenleyI’m an Ottawa journalist and author. Please contact [email protected].

Article Contents