City staffers and consultants have issued a report on how to (sort of) dismantle the taxi cartel in Ottawa. The Transportation Committee took two days (Thursday and Friday) to review the report and draft some motions. From all reports, it was a rather painful yet somewhat productive experience. Through the final motions, the committee is recommending the city implement most of the consultants’ report.
But they don’t want to do it just yet.
The report recommended that the new rules for the cab industry take effect in June, and that the current by-laws be inforced until then (why? it’s not really my place to say). The committee, on the other hand, has decided that the changes should come into effect in September, perhaps trying to gift the taxi cartel one more tourist season.
It’s pretty ridiculous to keep enforcing the existing by-laws for the next five months, cracking down on an industry and a business you’ve already deemed legal and valuable.
The rationale is that the taxi cartel needs time to react and adjust to the changing marketplace. The rationale is bunk. The city owes no such accommodation to the legacy taxis. The city owes it to residents to open up this market and give people what they need and want.
I have been in favour of a transition period. Cabbies who speculated on high-cost taxi plates aren’t going to reap their expected profits. And they thought a plate would be a good investment because of the city’s throttling of the industry.
As it turns out, they made a bad investment, and it’s generally not in the city’s job description to save people from their bad investments. The city didn’t owe them a protected industry. It provided one, and cabbies have benefited, but there was no guarantee that this government largess would continue.
The cartel was using government regulations (and actively lobbying for them) to extract greater and greater profits. In no other situation would this elicit such sympathy.
But, there will be market upheaval, and people will be hurt and the government created this speculative market, so giving them a transition period to extract the final rents from their government privilege seems fair.
Uber launched in Ottawa in October 2014. They’ve had a year and a half to prepare for the market shake-up. That’s a damned long time. Moreover, Uber was launched in San Fransisco in 2009. This change has been a longtime coming.
So no, they deserve no extra time.
Further, the actual “taxi” industry isn’t really having as much of a shake-up. There is a nominal (if not real) increase in the number of taxi plates out there. Taxis still get exclusive use of taxi stands and picking up street fares. They still have a definite market privilege (but, also, with some accompanying obligations).
The fact is, the recommendations don’t go far enough. The city needs to take the limit off of the number plates issued. That will be true de-regulation. And as I’ve said all along, that’s where the transition period can take effect. In six months time, double the number of plates. Six months later, uncap it.
That’s your period to adjust.