May 2017

City and MLS raking money out of
vehicle-for-hire industry hand over fist

by Mike Beggs

The perceived inequities and unfairness surrounding licensing in the new Vehicle For Hire bylaw are just a continuation of the City’s longstanding history of indifference to the industry’s problems for Toronto taxi interests.

Industry leaders uniformly dismiss Toronto Municipal Licensing & Standards’ perennial claims of operating on a “cost recovery” basis. And having paid among the highest taxi licensing fees in the world for many years, they believe they contribute a disproportionate share to the MLS’s annual budget for the many industries it regulates.

“They owe us money,” laughs Beck Taxi owner Gail Souter. “It’s a cash cow, it truly is. Cost recovery is a joke.”

MLS management failed to shed any light on its cost recovery model, failing to even respond to an e-mail request for an interview from Taxi News prior to press time.

But, Lucky 7 Taxi owner Lawrence Eisenberg maintains, “It was never their intention to (do cost recovery). Their intention was always to deregulate, and make the licenses worth nothing. They got what they wanted (under the new bylaw, with Uber licensed and able to put out an unlimited number of cars).”

“The new (Standard plate owner’s) renewal fee is $876, and for TTL’s (Toronto Taxi Licenses) it’s zero. Figure that out,” he continues.

He alleges that, while the powers-that-be promised to help the taxi industry and the public while finding a way to bring Uber into the bylaw, “they screwed us both.”

Perhaps the most contentious point in the VFH bylaw is the introduction of a new $130 Driver’s Fee for the plate owners, effectively wiping out the $200 reduction in the annual Standard plate renewal fee.

“So, they’re giving with one hand and taking back with two hands,” muses veteran owner Al Moore.

Taxi Action president Behrouz Khamseh suggests, that with Uber now paying the City 30 cents per run, and the cost of his Ambassador plate renewal having increased by $265 (from $700 to $965), “the City is actually making more money off of this bylaw.”

From the 1,400 Ambassador plates, he says the MLS is now pulling in an extra $1.4 million.

“They’re gouging, definitely,” he alleges. “(But) there are no checks and balances, here, Why are we paying more? For what? What did you do for us? We lost all our business (to Uber X)!”

Veteran driver Louis Seta (now in the Uber fold) suggests that cost recovery, “was just a favourite slogan the City ran out. It’s a phantom thing. It was always a fix. They were running it on a profit basis,” he opines.

“I think the reality is, the MLS has a mandate to generate a certain amount of revenue for the City, and it has nothing to do with cost recovery or anything else. And that’s what they do.”

He notes that under the new bylaw, the City has closed down its driver training centre, and vehicle inspection centre, and yet licensing costs have only come down slightly, overall.

“Where’s the cost recovery in that?” he asks.

Moore agrees such MLS claims have always been laughable.

He notes that dating back to the 1970’s, the MLS was charging a hefty $5,000 fee for transferring a plate (until it was stopped under the new law).

“If I’m selling you my plate, we go to the Licensing Commission office for about 15 minutes, and they charge $5,000 for a plate transfer. Is that cost recovery, 10 to 15 minutes?” he asks sarcastically.

“That $5,000 transfer fee (was paid for many years), now it isn’t there ,” adds long-time owner/operator Gerry Manley. “Why isn’t it there, now? I harped on them for decades saying it was wrong -- illegal, not just excessive.”

Moore notes that, since 1982 Toronto has almost continuously increased the number of “unnecessary” taxi plates. “This was to generate monies for the cash-strapped municipality by means of one-time issuing fees, and annual license renewal fees,” he suggests on his web site. “Said fees are increased every year to reflect the rate of inflation, so the financial benefits for the City have been consistent for decades.”

He alleges they’ve been doing this, “with no regard for the effects on the taxi industry and its customers, and that’s the main reason why Toronto’s taxi industry has been in such a sorry state since 1982.”

Perhaps the harshest critic of cost recovery, Manley is presently challenging the fairness of fees assessment under the new bylaw, by withholding his $130 Driver’s Fee, AND his Owner’s Renewal Fee.

It’s not the first time he has staged such a protest.

“How do they support these increases, year after year, after year? Where’s the accountability? Why can’t we even question these increases?” he asks.

“The whole problem with the MLS is, it’s the only department that doesn’t draw its budget requirements from the general tax pool. It doesn’t have to go to Council.”

“And the industry? We don’t get anything for our money,” he adds.

He notes that during the 2012 Taxi Review, consultant Dr. James Cooper concluded the City wasn’t in need of any additional taxi plates. “What do they do? They issue 290 plates,” he adds. “They don’t care, as long as they make their money.”

All this suggests some of the same systemic dysfunction alluded to by the City’s top bureaucrat, City manager Peter Wallace in a recent Toronto Star story, where he complained about a “culture of complacency” at city hall, that may have enabled paving contractors to scam taxpayers out of millions.

“Frankly, there has been slavish devotion to status quo, here,” he told the Star.

Wallace’s comments came on the heels of Auditor General Beverly Rome-Buehler’s report that found “telltale signs of rigging and inflated pricing” for road work.

“(The MLS) can be complacent, because who is making them accountable?” Manley observes. “The Province isn’t making them accountable, the federal government wants nothing to do with it, and the industry doesn’t have a legal war chest.”

Because he believes the MLS operates, “way above cost recovery”, Manley hoped to bring this all to a head with his many well-informed letters of protest to Toronto councillors and bureaucrats and his boycott of the $130 Driver’s Fee – now into a second year.

But all of this correspondence has yielded little or no response of note.

“There’s nothing that makes it mandatory for a Mayor, or Councillor to respond. I can’t force them,” he relates. “They don’t read it. Unless you hit them over the head with it, they have no interest.”

This doesn’t bode well, with MLS executive director Tracey Cook’s one-year Review of the Vehicle For Hire bylaw expected later this month.

“There are supposed to be meetings in May to review it. Somehow, I don’t see that happening,” he predicts. “She will say, ‘I need more time.’ Then, she will go beyond the August 15 deadline to make an application to quash the bylaw -- you have one year.”

Of Cook’s long-awaited one-year report, Eisenberg agrees, “The wheels are in motion. How far? I don’t know. But, all they’re going to do is say, they don’t have the answers. And she will refer it to staff.”

Seta alleges that, “As long as the councillors are getting the money needed into the general revenues fund, they don’t care.” So, he doesn’t expect to hear too much criticism of Uber.

“(Now they’re) getting $5 million a year more in their coffers from Uber. Why on earth would they complain?” he asks.


© 2017 Taxi News

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