Uber is not coming to New Westminster any time soon, and I’m OK with that. Many of my friends, especially the younger, more tech-savvy and “connected”(ugh) cohort, will not like hearing that, but there are many good reasons to question the Uber model, and how that type of service fits into the existing regulatory environment around ride-sharing services. It may actually challenge many of our assumptions about how business operates in the decade ahead. So we need to proceed with caution, as New Westminster Council discussed at last week’s meeting.

Full disclosure: the closest thing to Uber I have ever used was in San Francisco a couple of years ago. We were visiting a friend, staying in Pot Hill, and needed an early taxi ride to the airport. Our host suggested taxis were notoriously unreliable at that time in that neighbourhood, and suggested we call for a Homobile. This was a “ride sharing” service set up to address a specific problem: the Trans community were regularly being passed by the regular taxi services, especially at night, and that even in the (arguably) most queer-friendly City in America, Public Transit and traditional taxis are often not the safest environment late at night for a demographic that still faces disproportionate threats of abuse and violence. Homobile was started as a volunteer service to make sure that everyone could safely get home, and evolved into a collective not-for-profit that returns its revenue right back into a social enterprise that helps the community. We were, of course, white bread tourists looking for an Airport run, but were told up front it was by donation, whatever we could afford. We paid what would have been the “going rate” for an airport run in a traditional cab (with a tip) and got a ride from the actual Lynn Breedlove (who regaled us with memories of the queer punk scene in Vancouver in the 90’s). It was unregulated, non-traditional, and cash-only, but to us it was revolutionary, and operating as a social enterprise that we could support.

Uber is, unfortunately, few of those things.

First off, Uber is an unregulated provider of a commercial service in a highly regulated market, and that lack of regulation provides them a large economic advantage. There is little revolutionary about that. Sure, they use a smart phone app and on-line rating system to manage their sales and billing, but that is more a distraction than the centre of their business model. If we had an unregulated parcel-delivery service without a business license, whose drivers drove un-inspected and under-insured trucks throughout neighbourhoods with drivers not licenced for those trucks, I suspect our community would be concerned. Would we want an unregulated airline offering door-to-door helicopter rides with uncertain pilot training or vehicle licencing? Of course, this is a ridiculous example, but the fundamental argument is the same.

I started writing this post last weekend, and as is typical in the “tech world” (ugh), the story changes fast, as the provincial government has started hinting towards a shift in thinking in Uber, and to put that in context, you need to know the regulatory landscape as it is.

The Taxi industry is regulated at the provincial level. Some powers under that regulation are delegated to local authorities, but the regulation is 100% provincial. If Uber wants to operate in BC, they will need to comply with the B.C. Passenger Transportation Act, and currently, there is no sign they have ever sought a licence to do so.

In saying I am not positive about Uber, I’m not saying the Taxi industry is perfect. Far from it. However, we need to recognize that many of the flaws of the industry are a direct result of the industry trying to remain compliant with an ever more restrictive regulatory environment. Some of those regulations exist for (what I hope are obviously) good reasons: to assure the fleet is safe and reliable, to assure drivers are trained and safe, and to assure the industry is accessible. There are other regulations that appear to exist in order to protect the viability and sustainability of the industry and/or to protect consumers, including regulated prices/meters, and limits to the number of vehicle licences that can be used in any given region. Some of these regulations make sense only in a government-regulated industry sense, to prevent operators from ripping people off or undercutting each other, which may impact safety.

The cumulative impact of these regulations is an industry that is inflexible and at times horribly inefficient, but for the most part safe and reliable with predictable pricing and a constantly-updated fleet. The workers are not getting rich, but can make a decent predictable living, and the owner of the companies are providing a service, paying their taxes, and mostly succeeding, while the incentives to compromise on safety or service by undercutting your competition are few. Depending on whom you ask, they are doing this in spite of – or because of – the grey-market taxi licence sub-industry that puts 6- or 7-figure values on every licence they own. But that market is (and I cannot stress this enough) a product of the regulatory regime forced on these operators and owners.

Uber, in contrast has ignored these regulations, and have leveraged this lack of a fair playing field into a multi-billion dollar enterprise. Their service has the advantage of being more flexible and (usually) efficient, leveraging a remote “rating” application in an attempt to assure higher levels of customer service, though this process alone creates problematic workplace conditions. They do not have employees, but instead have millions of independent contractors who have no control over the terms of their employment, but bear all of the costs and risks of that employment, which is not in keeping with modern employment practices in a post-industrial society. It is not clear who is paying taxes and where, whether an Uber driver is insured in the event of a crash or other incident, or who is assuring the vehicles are safe for operation. Uber spends a lot of money on lawyers assuring they hold no liability for the actions of their “employees”, fighting the established legal principle of vicarious liability. There are no standards of accessibility for their fleet, and pricing is often unclear. Drivers are not required to have Class 4 drivers licences, may not have criminal record checks, and may not even be legally entitled to work in the jurisdiction.

Now, I’m not saying that none of these issues are impossible to address, nor am I defending the complex regulatory environment that currently makes the Taxi industry as frustrating as it sometimes is. This was made apparent to me back in the spring of 2015 when two taxi companies operating in New Westminster applied for more licences, citing the need to fulfill the expectation of their customers in regards to availability and wait times. The two companies applied for a total of 17 new licences, and were given 4 by the Transportation Safety Board. Council of course rubber-stamped the approval after no negative public comments, but the fact the industry sees the need for 4x the number of new vehicles than the provincially-regulated Board is willing to grant demonstrates that the regulation may be as much of a problem as it is a solution.

The Minister of Transportation has spoken out against Uber in the past, even threatening to send in investigators and file charges under the Act if Uber is found to be operating in the province. But as of this week, there appears to be a shift in thinking on this file by the Premier and the Minister, and excuse me for being a little skeptical about the motivations.

This week, the Premier, the Minister, and a candidate in a Coquitlam By-election have come out with announcements showing varying levels of approval of the Uber model. The Minster even saying it was a matter of “When, not if” Uber comes to BC, but there is nothing on the Ministry website suggesting any recent change in ideas about Uber, and their decidedly non-favourable Factsheet on the topic has not been updated in 6 months. So if a conversation in the Ministry is being started about this, it isn’t a public one.

Where the conversation is more “public” is over at the BC Liberal Party, where on-line ads and data-mining pages have already started asking you what flavour of Uber you would like (note the survey includes “yes” and “not sure”, with “no” not an option?):

Link to Source

You need to submit your name and contact info to take part, and as this is a Liberal Party ad, not a government document, it is simply a method to collect contacts for targeted Get-Out-The-Vote action in May 2017. There is nothing unusual or illegal about this, but it is telling that the Government is (in their official role) telegraphing movement on this at the same time they are (in their political role) collecting the names of people who like the idea of the change.

This tells me that the Liberals anticipate Uber being a wedge issue during the 2017 election, and are assembling their resources for that fight. No doubt the Premier’s former campaign coordinator, who is now paid to lobby the government on behalf of Uber, is part of this planning process, and will know how to leverage the needs of his employer(s) to the utmost political advantage of all.Capture

It already appears that the paid comment-section spammers “digital influencers” of the Liberal Party have been  characterizing the NDP as dinosaurs, old fashioned and “proponents of videos stores” if ever they call on the Government to show some actual leadership on this file with revised regulations,  so that should be fun to watch.

Which makes me suspect that the regulation of “the sharing economy”(ugh) will end up much like the gradual and ultimately irrelevant shifts in liquor laws over the last few years. There will be little useful policy developed and little real change, but a lot of press releases to sell small populist victories at times when the Government needs some good news. And if Uber never arrives in the Lower Mainland, somehow the blame will be shifted to “lefty” cities like Vancouver and New Westminster, despite our lack of regulatory jurisdiction.

But to prove I am skeptical, not cynical, I hope this does not occur. I hope that this forces the Government to take a serious review of the taxi industry and employment standards in the “ride sharing” industry, so that workers and consumers in both industries are protected, and can make clear, informed, choices about their options. And also hope the Government put as much effort into planning and developing those regulatory changes as they clearly are in marketing the political battle to come.

4 comments on “Uber

  1. I think you should have included the way that the oligopoly of taxi licenses has made a small number of people very wealthy indeed. They have strategically used that wealth to gain political influence, and successfully kept the number of licences well below what is needed in this region. It is one thing for a political party that now has a quite dreadful performance record to try to influence younger voters. It is quite another thing to deliver a sea change to a regulated industry that has become entrenched in the political landscape. I think it is very unlikely that there will be any change in provincial legislation before the election. After the election – well, we will have to see who gets elected first.

    1. To be fair, I did make reference to that, in the comments about how the outrageous 6- or 7-figure trading value of a Taxi licence is a product of the crappy regulatory environment, and in my example of how the Taxi companies want more of them (which should reduce their grey market supply/demand value), but the Board will not give them. This has indeed created a bit of an oligopoly, and a powerful political lobby on the side of the Taxi owners (look no further than the $5 surcharge on taking the Canada Line from the airport!) who no doubt have a vested interest in the regulatory environment staying pretty much where it is. We now apparently have another powerful lobby (the misnomered “sharing economy” billionaires) ready to demand change, and apparently have the public increasingly on their side, as they paradoxically represent “the little guy”.

      So we basically have Liquor Laws 2.0, which I suspect will be managed the same way – little delivered, lots announced, political advantage maximized, and little rational policy development so both the industry and public feel equally screwed. And I’m not sure either party would do it any different. But that makes me sound truly cynical.

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