Lawyer
Taxilogoweb2014

May 2017

City’s calculated mismanagement of vehicle-for-hire regulation is unleashing calamitous consequences that serve no public interest but the politicians’

by Al Moore

(Editor’s note: The following was a written submission by Toronto taxi owner Al Moore to Mississauga Council presented March 29, 2017.)

Prior to 1982, taxi trips in Toronto-based taxis were cheaper than in almost every other major North America city (executive summary, 1982 Currie, Coopers & Lybrand report to Toronto’s then Licensing Commission).

That all changed in 1982, during the worst recession since the Great Depression, when Metro councillors changed the bylaw and started issuing taxi licences at an unprecedented rate.

Since then, as a direct result of a massive oversupply of taxis, the taxi-riding public in Toronto have been overcharged to the tune of hundreds of millions of dollars for the privilege of riding in sub-standard taxis.

Fast forward to 2010, and an article by Shannon Kari, in the Globe and Mail, showed that a 5 kilometre taxi trip cost 45 percent more in Toronto than in New York City and Chicago. Other reports, in other publications, showed that taxi trips in Toronto were among the most expensive among the world’s major cities.

When asked why that was so, Councillor Howard Moscoe replied that it was very expensive to operate a taxi and that the main reason for such high meter rates was that there were too many cabs on the road.

Councillor Moscoe’s answer was correct, but he was short on details and never offered up the information that he was the driving force behind the issuing of most of those surplus taxis.

When asked the same question, by the same reporter, Councillor Denzil Minnan-Wong indicated that taxi fares had to be high so that drivers could earn a fair wage.

Councillor Minnan-Wong’s answer was also correct, but his words were very carefully chosen because he also knew that there was a massive oversupply of taxis for the available business, 1,400 of which were Ambassador Taxi licences that were issued as the direct result of the 1998 Taxi Review that he headed up.

Not one of those Ambassador Taxi Licences was issued to satisfy any public need in 1998; not one of them was necessary to satisfy any public need in 2014; and not one of them will be required to satisfy any public need as of the 2026 census.

Whenever there is an oversupply of taxis in a jurisdiction, meter rates have to be raised to compensate for the increased costs associated with the purchasing and maintenance of the unnecessary vehicles and the loss of income that occurs when too many drivers are sharing a finite amount of money. If meter rates are not increased to compensate for the oversupply, the quality and safety of the fleet will be compromised.

Based on a ratio of one taxi for every 850 residents, there was an oversupply of some 1,575 licensed taxis for the available business in Toronto as of the 2011 census, and taxis were and still are so expensive that many people can’t afford to use them.

The reason for that oversupply is that, since 1982, Metro Toronto and the City of Toronto have been using Toronto’s taxi industry to generate income for the City by issuing taxi licences that are not needed to satisfy any public need and charging the recipients of those licences exorbitant one-time issuing fees and exorbitant licence renewal fees every year.

Over the decades, stakeholders have frequently expressed the opinion that Toronto’s taxi industry lost a lot of business, both people and parcels, because taxis were no longer affordable for many people and the price differential between parcels delivered by a taxi and a courier service was too great, but there was no valid way to quantify an amount. Now, thanks to Mayor John Tory and his allies on council, there is.

While he was campaigning to be mayor of Toronto, Tory never once mentioned the taxi industry or Uber, but as soon as he was elected he proclaimed that Uber and services like it were here to stay, and, as mayor, he intended to see that they did because he liked the technology, the taxi-riding public deserved a cheaper option to sky-high taxi fares, and it was high time that the City’s regulatory system got in touch with evolving consumer demands in the 21st century.

In fact, Tory and every other member of council were shown how to give the public all of the things he spoke of, and a lot more to boot, by making a few changes to the existing taxi industry. They declined.

Those changes, which would have included the option to order a taxi by means of an Uber-like app, can be seen in file 004 at www.stopuber.net.

In December of 2016, under the Municipal Freedom of Information and Protection of Privacy Act, I requested the following information:

1) How much Uber was paying the City of Toronto per trip dispatched; and

2) How much that amounted to, by month, since that agreement came into force.

Once I had that information I was able to calculate that if Toronto had the proper number of taxis for the available business, and Uber was prohibited from operating in Toronto, as should be the case, each of Toronto’s taxis could be taking in as much as $115,270 more, on average, per annum.

That amount will be higher if adjusted to reflect the number of Standard Taxis that are single shifted, and it will be higher still if the limousine industry were to be reregulated, which it should be.

With those monies to hand, Toronto could have had one of the best and one of the most affordable taxi industries in the U.S and Canada, as was the case between 1953 and 1982, before councillors started “improving it”. Prompt service would have been the norm; the cost of taking a taxi could have been greatly reduced; the income of shift drivers and owner drivers could have been greatly increased; cab owners and fleet operators could have been providing much better vehicles, all of which could have been wheelchair accessible and available at regular taxi prices; and there would have been 1,575 fewer licensed taxis and up to 5,000 fewer Uber taxis polluting the air and clogging up traffic in Toronto and Mississauga every day.

If council had embraced the recommendation proposed in file 004 at www.stopuber.net Toronto’s taxi industry could have been the gold standard for taxi industries everywhere. Unfortunately, they didn’t.

With the added income that they would have been earning drivers could have returned to working a five-day, fifty-hour work week, which would have greatly improved their quality of life and opened shifts for people who were between jobs or needed to supplement their income.

Simply put, the City of Toronto will be taking in between $6,000,000 and $8,000,000 a year by allowing Uber to operate in Toronto, but that decision, by council, has cost cab owners over one billion dollars with respect to the monies that they have invested in their taxi licences; the “pensions” of retired owner-drivers have been slashed by over 50 percent; fleet operators are having trouble finding drivers to cover their cars; the income of owner-drivers and shift drivers has been slashed by around 50 percent, and both the federal and provincial governments are taking in less money from HST payments.

In return, Uber is taking hundreds of millions of dollars out of the country every year. Those monies should be spent in Ontario, by Ontarians, thereby supporting Ontario businesses, not stuffed into the bank accounts of foreign millionaires and billionaires.

Finally, in case anyone has missed the point of this document, the taxi industries in Mississauga, Brampton and Toronto are all in dire financial straits as a direct result of Uber’s activities; taxis are beyond the means of many people, and if meter rates are raised even higher to offset the damage done by Uber’s presence in the GTA the increased cost will make them unaffordable for many more ; which, in turn, will result in a never-ending spiral of less ridership followed by even higher meter rates to compensate for the loss of business.

That scenario suits Tory and a majority of Toronto’s councillors just fine because every passenger that switches from the taxi industry to Uber will result in more money going into the city’s coffers.

That, ladies and gentlemen, is Tory’s idea of “a level playing field”.

Likewise, but for unknown reasons because staff have indicated that Mississauga doesn’t need the money, that same scenario suits Bonnie Crombie, the mayor of Mississauga; who, like Tory, has somehow managed to convert a majority of Mississauga’s councillors to her way of thinking.

Crombie and her supporters on council also babble on about a “a level playing field”.

In short, the taxi industry and Uber can not co-exist as competitors; but, as is explained in file 004 at www.stopuber.net, using Uber or some other Transportation Network Company as an adjunct to the existing taxi industry would have provided the public with everything that Tory said he wanted, without destroying the life savings and “pensions” of thousands of owners and the livelihood of many thousands of full-time taxi drivers.

 

 

 

2017 Taxi News

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