Uber has become a fundamental part of municipal transportation in recent years, ferrying young and old alike around Los Angeles, New York, London and most other major metropolitan regions across the globe.
However, up here in Canada, Uber’s success has been less than absolute. While those living in Toronto, Ottawa and Montreal are free to use the service, the government of British Columbia has blocked the ride-sharing service from operating anywhere in the province including one of the nation’s most populous cities — Vancouver.
So how has the most important gateway city on Canada’s Pacific coast avoided Uber so far? In all likelihood, you already know the answer — the taxi industry. If you follow the news frequently, you know taxi companies have rolled out everything — from topless drivers in court to outright assaults in the middle of the road — in protest against Uber. Most of these actions have ended up being for naught given the company’s steady takeover of cities everywhere. Yet, due to legislation, Vancouver is still predominantly taxi-territory — whether commuters like it or not.
There are plenty of theories as to why British Columbians are still unable to access to the service. Maybe Uber’s lack of regulation is not as popular among general consumers as some would think.
According to Robin Lindsey, an operations and logistics professor from the Sauder School of Business, the reason is not that complicated. Simply put, Lindsey speculates that the local taxi industry is just fighting hard enough, armed with its own lobbyists and all.
“Typically, companies lobby intensively and governments are receptive. You pay X-thousand amount for a dinner then you get the ear of a minister which may influence the policy of the industry. It’s sort of unfortunate, but that's the way things work,” Lindsey, who studies transportation economics, explained.
Though the strong barrage of lobbying efforts is an annoyance for people still waiting for Uber, it is an unsurprising response from the taxi industry. This is because if and when Uber does finally start to operate around British Columbia, the provincial cab industry is expected to go on life support.
In New York City, according to Lindsey, Uber gained considerable growth and value during 2013. Simultaneously, taxi district permits or “medallions” in the city plummeted in value by 50 per cent. This translates into an incredible capital loss for these companies, since obtaining these permits requires a very expensive initial investment. In fact, just recently, one of San Francisco’s most popular taxi companies, Yellow Cab, filed for bankruptcy in the wake of its inability to keep up with ride-sharing's popularity.
However, all this should be unsurprising given the regulatory divide between traditional taxis and ride-sharing services like Uber. Typically, taxi companies and their respective drivers are only allowed to operate within specific sectors. This results in a number of inconveniences, including riders being unable to go to a desired destination or drivers losing time and income just to reposition themselves.
Uber drivers don’t share these restrictions. Pickup and transport times are generally shorter as well. Along with surge pricing, where the price goes up based on the demand, the service is simply more cost-efficient for the drivers.
Victor Ngo is an urban planner and researcher who graduated from UBC’s School of Community and Regional Planning. He conducted the first comprehensive review of Uber’s operations around North America (available from UBC's Open Collections), as well as identifying regulatory options available to the City of Vancouver. According to Ngo, Uber’s unbound efficiency has also provided more accessibility for lower-income individuals.
“One study found that Uber has provided residents in New York’s lower-income and minority neighbourhoods beyond the downtown core with more transportation choice and improved service,” Ngo wrote in an email. “As transportation funding continues to be an issue in the Metro Vancouver region, Uber may be beneficial for passengers in areas where transit improvements are desperately needed.”
To make matters worse for traditional taxi companies, provincial policymakers are noticing the outweighing benefits Uber offers and are slowly changing their stance towards ride-sharing in general. This also stems from a mix of the app’s popularity among tourists and watching other cities adapt to their services with ease.
“I can only speculate that they’re listening to the tourist industry, or they listen to people who like it and have had experience in other cities. Or they see writing on the wall — the figures are going to come in in favour of it,” said Lindsey. “‘Only a fool never changes his mind.’ If the evidence shifts, your assessment of reality should shift as well.”
Additionally, the company is out in full force with its own retaliatory lobbying efforts, according to Ngo. Efforts being further bolstered by positive reception of the company from the general public, despite significant safety and regulatory concerns.
“Uber has been running an aggressive and prolonged public lobbying campaign urging the provincial government and the City of Vancouver to allow them to operate,” Ngo said. “Signatures on their online petition to the government are almost at 70,000 now, up from over 40,000 since last September. Company representatives have regularly met with municipal politicians and staff across the Metro Vancouver region. [They have] significant resources and it shows.”
In fact, just last summer, Uber representatives courted the AMS for their advocacy towards increased ride-sharing presence within Vancouver — but not necessarily for Uber directly. With the failure of last year’s transit plebiscite, there was some consideration to the idea as a small-scale solution to student transportation issues. However, the AMS ultimately turned down the requests later in October due to concerns regarding the ride-sharing data presented to them by the company that would support such a move.
“I told [the Uber representative] that I understand that it’s not Uber asking us to endorse Uber, but to keep in mind that any information that [they] send us will be seen in that light if it’s not properly third-party sourced,” said former AMS VP External Jude Crasta, to The Ubyssey last year. “The data was provided from … Uber with very few independent sources and others were working with Uber.”
Nevertheless, the company is already treating its BC presence as inevitable and already began hiring drivers in Vancouver earlier this year. There are also numerous reports that many traditional cab drivers are already considering that job offer, with defections happening across other cities. Meanwhile, other somewhat similar services are popping up in Vancouver such as the ride-sharing app Spare Rides, which was created by UBC alumni. The critical difference with that service though is that it is strictly meant for carpooling — not a perfect surrogate for a taxi service.
Of course, this does not mean that taxis are going to become extinct. Lindsey is confident that both types of services can co-exist, although he speculates the conventional cab company will still have to compromise more in the face of changing generations and trends.
“You have the market segments against the niches out for different supplies. We go 10 years into the future, the conventional taxi industry will still exist but to a smaller scale, while Uber will have a major share and then there may be variants of [it],” he said.
Ngo is a little less optimistic. He has yet to observe taxi industries in any city being supportive of any reform favoring Uber due to the potential losses they will suffer. That said, he also believes that achieving a policy balance is not impossible, depending on the approach.
“I believe [that] ride-sharing services should be viewed in a more comprehensive light as one possible transportation solution within a larger multi-modal transportation system. For example, research indicates that ride-sharing services have been able to better service passengers during late night periods. This is [important] for late-night workers to travel during times when there is poor public transit service. Ride-sharing can play a distinct, but complementary role to taxis,” he said.
There is also still an uphill battle waiting for Uber if and when it finally finds its place within Vancouver and the rest of the province. Just recently, the service was pulled out from Calgary and Edmonton due to insurance policy problems, while withdrawing from Austin, Texas a few months ago due to much stricter background checks being imposed on its drivers. There are also the numerous cases of compromised passenger safety that impede on the company’s quest to be more widely accepted.
Ngo’s research also found that Uber’s business model is still lacking in terms of disabled and elderly-friendly assistance. This is problematic given that traditional taxi companies, whose business is already being undermined, have more assets capable for these services.
Given all these complications, obtaining legalization is only half the battle. But whatever the details, the end to Vancouver’s lack of ridesharing is no longer a question of “if,” but “when.” And when it happens, the cards are already stacked against traditional taxis.