Uber, and doing the right thing means doing the right thing now.

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.

Taxis, politics and the time for Jim Watson to fight

Ottawa’s taxi disputes are ramping up. The cabbies’ union, Unifor, are fighting battles on multiple fronts, while trying to maintain cohesion between multiple factions within the taxi union. Cabbies are “taking” fares* from each other. Some drivers are calling others scabs. And drivers are attacking each other. During all this infighting, the union still has a labour dispute with Coventry Connections (or is the airport authority? or the city? or the mayor? The messaging isn’t particularly coherent), and they’re still going after Uber.

This week, though, they’ve stepped things up. Unifor honcho Jerry Dias led a demonstration against Uber downtown yesterday. He seems displeased with Mayor Watson’s actions on the matter, and threatens that cabbies will “take back City Hall” if they don’t get what they want. It’s the petulant whining of a rent-seeking cartel when faced with the fact that their favoured status can’t continue forever. It’s also absolutely ridiculous.

Jim Watson has been many things during his most recent tenure as mayor, but hostile to the taxi cartel, he is not. He has repeatedly defended their privileged status and lashed out against Uber. It is only when some of the cabbies have revealed their true nature through repeated acts of violence and unreasonable demands of the city that the shine has come off the official relationship between Watson and the taxi drivers.

Further, this and last council has been especially protective of the taxi status quo. Current deputy mayor found himself in a bit of controversy a few years ago. As The Citizen‘s Joanne Chianello wrote:

At the time, council fought to make those plates non-tradeable, arguing that it was the first, albeit minuscule, step to one day phasing out those tradeable plates. The city would steadily, if slowly, issue new, non-tradable plates over the years and eventually the tradeable plates would lose their value.

Except that in 2012, Coun. Mark Taylor — with the full support of Watson, but not of veteran councillors — moved to make these newer plates tradeable. It’s worth noting that the city’s taxi union gave Taylor a $750 campaign donation after he became chair of the committee that presides over the city’s taxi bylaw. (Taylor has called taking the donation “a rookie mistake” during this campaign season.)

Now, there’s nothing to say that Taylor was on the take. I fully believe that he wasn’t. This seems a situation of people who are inclined to collaborate collaborating. But even if money doesn’t buy council, it does buy access; it is a manifestation of power and power coalesces. A politician doesn’t have to be dirty to be corrupted, and money has a tendency to corrupt.

So if the union is looking for a taxi cartel-friendly council, there’s no reason to think they don’t already have it. At least for now.

One of the mayor’s faults is his inability to take criticism (it’s a fault that most of us share, to one degree or another). A critique of a city initiative is taken as an attack on the city and council and him. The reaction is (to borrow a word from the opening paragraphs) petulant.

But you know what, it’s time for this flaw to finally do some good for the city. Mayor Watson, the taxi union is calling you out. They’re lying about you. They’re threatening you. You would not suffer such an offensive from anyone else; it’s time to stick up for the city and end the power of the taxi cartel.

Council has a taxi review going on. It’ll be useful to hear the results and determine how to transition out of the current messed up system, but, Mr. Mayor, here’s what needs to happen:

  • Uber is here to stay (until a new competitor comes in and knocks them off their perch). Embrace it. It’s a dispatch service that works and that your citizens seem to love.
  • Get rid of the plate system. I know some cabbies have put a lot of money into their plates, and that’s rough, but the city can’t protect everyone from poor business decisions. Uber has been around for a year, now. Notify cabbies that existing Uber drivers are allowed to keep operating and give the cabbies about six months before we take all limits off the number of taxis, Ubers or whatever are on the road. Anyone who wants to be a cabbie, can…in six months. This gives plate holders close to two years from the introduction of Uber into the Ottawa market to wring whatever inflated profits they can out of their black market plates.
  • License all cabbies, using an expansive definition. This means that all Uber drivers have to have the proper safety checks and emissions tests completed (and don’t give any driver or company a lower standard than the rest of us; if anything, give them a higher standard). Drivers need to be cleared for safety and must have proper insurance.
  • Get out of the pricing game. Cabbies can charge what they want or need.
  • Get rid of airport plates.
  • Have the airport sell access to individual drivers or on a per-fare basis. No more friggin’ cartels. At all. Ensure the airport understands that they rely on the benevolence of the city to operate.
  • Get protests off the Airport Parkway. Job action is valid. That’s not what that was.
  • Run more buses to the airport and give all priority to transit.
  • Get LRT out to the airport.

(We shouldn’t expand the Airport Parkway, either, but that’s a different discussion.)

Mr. Watson, this is your challenge. You need drag us into a modern and thoughtful transit system. Unifor threw down the glove. Make them regret it.


*The use of the terms “fares” instead of customers is pretty revealing, no?

“Uber is an unmitigated force for good”

For a while now, I’ve been meaning to write a post titled “Uber is an unmitigated force for good”. Don’t get me wrong; I don’t have any strong feelings about Uber, itself, and there are some valid concerns about them. The company has been known to engage in some shady business practices, and the contractor status of their drivers could be open to exploitation.

(And, to be clear, their drivers are independent contractors, and not just because they say so. Canada Revenue Agency has very clear rules to differentiate between independent contractors and employees, and Uber drivers are clearly contractors. However, just because something is legal does not mean it can’t also be exploitative.)

No, I was measuring my words carefully. I wasn’t going to say that Uber was “an unmitigated good”, I was going to say “an unmitigated force for good”. And it all came about from a little sticker.

(By the way, if you ever write anything remotely positive about Uber, you’re likely to attract trolls who either work for, or have some connection to, Ottawa’s corrupt taxi cartel. So let’s just get this out of the way now: Hi Trolls! Feel free to rot!)

A few months ago (shortly after Uber started rolling in Ottawa), I noticed that Ottawa cabs had stickers on the back of their cars trumpeting their new app (sound familiar?).  Obviously, this shouldn’t be big news, but Ottawa’s taxi cartel are notorious for not wanting to offer exemplary service. They were slow to take credit cards or debit cards. They had an antiquated ordering system. And they were likely to leave stranded in the middle of nowhere if they felt like it.

Now with the arrival of Uber, it appeared they were willing to step up their game and start providing the level of service their customers deserved. But…

When Uber came on the scene, the taxi cartel fought and fought hard. They’ve implored police to waste their resources policing Uber, and they’ve tried to use their notorious political influence to get their way at City Hall. (Jim Watson is a fervent opponent of Uber, but that doesn’t seem to a result of graft; he seems to be honestly irked by this company that is pleasing so many of his constituents.)

Well, that’s par for the course. They could keep up their rent seeking while also providing good service. It’d still be a step up.

Then the threats came.

The taxi union said that they couldn’t control their drivers, and didn’t know what they might do, hinting violence and vigilantism. In one of several self-indicting moments, the union made their drivers out to be wild animals who should never be allowed to serve the public.

This past weekend, we had a taxi strike. It was a little odd. The drivers promised that this strike wouldn’t actually affect service levels…an unintended admission that their service standards are about as horrid as you could imagine. Ottawa cabbies do not have a good reputation. Uber seems to get far more praise than condemnation from passengers. I do not know why cabbies would want to send customers to their over-performing competition.

This is all rather bad, but it’s about to get a whole lot worse.

Demonstrating the inherent obnoxious entitlement in the taxi cartel, drivers are planning to hunt down Uber drivers. They’re going to go undercover, order Uber drivers, then…ambush them? Berate them? Attack them? Actually get to their destination in a safe and comfortable manner?

They’re going to do this to try to get the cops or bylaw to act (which they are already doing…this is just grandstanding…or whining…or both). Of course, if you’ve ever tried to get bylaw or the cops to address illegal behaviour on the road (like, say, dangerous driving by a Blue Line cabbie), you’ll know that these sorts of reports go absolutely nowhere (even as Ottawa Police Services keeps telling people to report infractions).

(This will be an interesting test to see if city council, bylaw and the police are actually in the pocket of big business. If cabbies get (even more) special treatment, we’ll know they are.)

So, maybe Uber isn’t an unmitigated force good. They’ve stirred something deeply ugly in the taxi industry, and it could get back for the public. Or maybe this is just another positive. Exposing the taxi cartel for the corrupt, self-entitled, rent-seeking bullies that they are probably counts as a public service.

The Tyranny of Taxis

I have written before (multiple times, in fact) on the ridiculous nature of Ottawa’s taxi market. It’s a cartel system. Existing providers have a protected market in which possible competitors are blocked from entry. Taxi plates, purchased from the city for purported purpose of driving a taxi, are bought, sold and rented on a grey market. Prices for plates on this market are incredibly expensive, allowing plate holders to get rich off of, essentially, a public entitlement. It’s rent-seeking at its most egregious…and the city has not shown sufficient nerve to deal with it.

Today, it wasn’t the customers or would-be competitors who were decrying this pseudo-monopoly; the plate holders are now upset:

The president of the local taxi union says gas prices and insurance fees are “out of control” and Ottawa cabbies are looking to increase their fares by seven per cent.

Ontario Taxi Union Local 1688 president Amrik Singh says that Ottawa cab drivers pay about $8,000 per year for insurance – and ‘one little fender bender’ will cost them an additional $300 per month. And he can’t bear to watch gas prices go up any more than they already have.

“You don’t even want to look at the gas station when you pass by,” Singh told Metro Tuesday.

It is easy to see how rising costs but price caps will put the squeeze on drivers. One driver noted that with gas, insurance and “company fees”, his costs are approximately $12,000 per year. That is quite a burden, and I certainly have a lot of sympathy for an individual trying to make a living during trying times.

But I don’t have a lot of sympathy for the industry as a whole. Drivers may be getting squeezed by companies and gas prices. There is a measure of unfairness in the government freezing prices for a (non-essential) service, but the industry regularly fights to ensure they retain their industry’s protection from the government. It’s not really the place of industry participants to claim to be the wronged party in this scenario.

If you lobby the government to meddle in your business, it’s partially your fault when the government meddles in your business.

Taxis, Supply Management and Speculation

In response to my recent post, Taxis and Picket Lines, commenter Peter notes:

The same thing can be said for any government quota system. Ottawa Taxis and Ontario milk come to mind. While not really defending the quota system, it does afford some reliability in supply. It also gives workers a chance to find jobs with some chance of a retirement plan at the end. There have been many suggestions about how to change the system, particularly in Ottawa, there is some jurisprudence in this regard dating back to the 1980s, I believe. I am not really offering much here. The taking away of long established government rights seems to be always met with arguments of financial hardship should those rights be revoked. Buying back the licenses or quota from every taxi driver or milk farmer maybe one way to do it but how much are we willing to pay as a city or province to do this.

Peter is correct that the taxi quota system is similar to other supply management programs, and he is correct that the intent of Ottawa’s taxi service is to provide some reliability in supply. The current system reliably limits the supply of taxis. Were it not for the plate system, we would see more cabs on the roads, and customers would have less difficulty hailing a cab. The plate system is a giant give-away to the entrenched interests of the taxi industry, and the extract rents from customers and new entrants to the market. It is a rather sick operation that a relative few people can hold the market hostage until their ransom is paid. Continue reading

Taxis and Picket Lines

Carleton University staff are on strike. Classes continue, but picket lines are set up. Unfortunately, by the first day, there had been an incident. A couple of picketers were hit by cars. The picketers are okay, thankfully, and I won’t judge whether it was malice or negligence (or a mixture of the two).

Of note to people heading to Carleton, OC Transpo buses are not going on to campus. The O-train and Para-Transpo will, but regular buses will not. I wondered what the reason was behind this decision, as the website gave no explanation. So I tweeted OC Transpo. Quickly, I received this response:

This is a reasonable explanation. It could be convenient cover so that OC Transpo can escape controversy. News reports also stated that some taxis would not cross the picket line, as some drivers are unionized.

Which is also reasonable…almost. Continue reading

Same old news for Ottawa’s taxi market

The Ottawa Sun‘s Susan Sherring notes that a new proposal regarding Ottawa’s taxi system has appeared at City Hall. If adopted, every time a taxi plate was sold, the new owner would have to provide an accessible cab. The proposal is hung up, as Councillor Mark Taylor, who chairs the city’s community and protective services committee, wants it to be given more study.

Annoyed by the typical (and typically annoying) political hang ups, Ms. Sherring is a big fan of the new proposal, arguing that it is a good fit with the evolving demographics of the city. I am less inclined to believe this is such a happy development. Continue reading