February 2019

Does anyone at city hall really believe it’s a good idea to unleash 80,000 vehicles-for-hire on Toronto’s streets?

by Mike Beggs

(Editor’s note: This is the third installment in Taxi News’s series on veteran industry observer Gerry Manley’s monthly letters addressing the many flaws and outright failures inherent in the City of Toronto’s calamitous 2016 Vehicle-For-Hire Bylaw. Readers interested in reading the Manley letter discussed in this article will find it posted on taxinews.com.)

In the third of his series of monthly letters, Manley calls for the City to put a cap on the number of PTC vehicles -- which now stands at an unfathomable 72,000-plus -- leaving licensed taxi operators at the breaking point. He sees the open access granted to Uber, Lyft and like companies as one of the biggest problems with the new bylaw, butchering cab industry livelihoods while exacerbating gridlock and crime levels.

“Do we really need 72,000-plus PTC’s on our streets to adequately service the taxi-using public? I think not,” he writes.

With plate and leasing values driven down to miniscule amounts, Toronto plate owners have filed application for a $1.7 billion class action suit against the City. According to Toronto Municipal Licensing and Standards (MLS) staff, as of August 2018 there were no less than 186 Standard taxi plates on the shelf. But Manley estimates another 300 to 500 are sitting on the desks of fleet and brokerage operators, and that each of the City’s 5,500 cabs is losing about 10 trips, and $130 in revenues per day.

In cities like New York, Kingston, Ont., and (quite possibly) London, Eng., capping the number of PTC vehicles has become a strategy to deal with the increase in traffic congestion and pollution, and financial struggles of cabbies caused by these popular app-based services. (Several taxi and limo drivers in New York have been pushed to suicide over the past two years). He suggests this legislative pushback against Uber and Lyft, “could open the floodgates for other municipalities (around the world) to follow suit.”

But he doubts the City of Toronto would adopt such measures, given the windfall of revenues derived from PTC’s – between an initial PTC application fee of $20,000, an annual PTC licensing fee of $15 per driver, and a PTC fee of 30 cents per trip. (That 30 cents per run alone amounted to $7,620,000 from July 15, 2016 through November of 2017 according to the MLS).

“They’re not going to kill the goose that laid the golden egg,” he alleges.

“They might look into capping the number of PTC’s, if only to give the appearance that they truly care about the safety of the consumer, or the social contract that exists between them and their taxi industry.”

This disregard for regulating the number of operators in the marketplace is nothing new to Toronto taxi interests. It dates back at least to the mid-1990’s, when the City abandoned its’ per capita plate issuance formula (which “had worked famously for decades”), in favour of an indicator model, claiming this was a better way to determine the number of cabs needed. (Manley contests this argument, and claims the City never canvassed what percentage of people visiting Toronto, and attending major sporting events, theatre attractions and conventions used taxis).

This really took legs with the introduction of the Ambassador Taxi program in 1998, when the City began to churn out plates with almost systematic regularity. Manley is among those who believe this reflects a hidden agenda, with the City determined to destroy the value of the Standard taxi plate and deregulate the taxi industry. And he alleges Uber’s arrival in 2012 made it, “a perfect vehicle to bring their plan to fruition.”

“What’s the best way to deregulate the industry – to flood the market with PTC’s,” he says.

“How many times did (ex-Councillor) Howard Moscoe say he wanted the plate values driven down to $40,000? What can we do? We can’t stop the City.”

Manley emphasizes that most municipal governments use a per capita license issuing formula of about one plate per 1,000 to 1,200 people, while in Toronto the accepted rule of thumb was 1 per 850 (because of its large geographical expanse, and popularity as a destination for tourists, and business travelers).

“It was as accurate as you’re going to get, and it provided health and safety and gave our members a reasonable chance to make a decent living,” he offers.

He observes that with 72,000 PTC cars, 5,500 cabs, 1,200 limousines, and 850 licensed Greater Toronto Airports Authority vehicles, Toronto now has approximately 80,000 cars serving a population of 2.7 million – and with the number of PTC’s growing on a daily basis! That equates to the “insanely low” per capita ratio of 1-per-61, “not affording anyone the chance to make a living.” And with only 10 to 12 MLS inspectors to enforce the bylaw on that number of cars, he maintains, “consumer protection no longer exists.”

“New York City has got 10 times the population we have, and only 20,000 more cars,” he says. “Where does that make sense?”

“And it actually violates what (Mayor John) Tory says he wants – to reduce traffic congestion in the downtown core. Most PTC’s work the downtown core.”

Manley maintains freezing the number of PTC’s at existing levels, like in New York where there are 100,000-plus vehicles, would bring little relief. But he claims if cap numbers are made proportional to the existing number of taxis, “companies like Uber, and Lyft will not survive, as they will not generate enough money to pay drivers and show a profit to their investors.”

He recommends a cap of 10,000 PTC vehicles for Toronto. And because there are five licensed ridesharing companies, he reasons the numbers should be divided up evenly at 2,000 apiece (but open to adjustment on annual basis, based on consumer usage data). He says the total should never exceed 10,000.

Further to the point, he suggests the number of Toronto taxis, PTC’s , and limos be immediately frozen until there’s a return to the 1-per-850 ratio, or the City can prove (in consultation with the industry) the need for additional licenses.

Manley says it would not be a perfect solution, but at least a good starting point.

“Something must be initiated in this area if the taxi industry is to survive,” he writes. “And since this is, shall we say, the soup de jour, we had better start eating it.”

“Regulated access with at least an opportunity to earn a living for the full-time taxi driver is of paramount importance, if any municipalities want this industry to continue to be an important cog in their transportation grid.”

That said, he insists the current situation should never have been allowed to develop. He reminds that when Hailo ridesharing company hit Toronto six years ago (pre-Uber) and requested permission to operate, it was mandated by the City to obtain a taxi broker’s license, use only City-licensed taxis and cab drivers, with no permission to increase its’ number of vehicles.

“What happened to that policy when Uber Technologies arrived on the scene a year, or two later?” he asks. “Uber came to Toronto with pockets full of money and hired the best lobbyists money can buy.”

He notes, while discussions were ongoing with the City, Uber was allowed to operate with impunity, without regulation or fear of accountability, was allowed unfettered vehicle access into a taxi market that had been regulated for decades, and presented a weighty report of recommendations -- many of which were adopted when the bylaw was enacted on July 15, 2016, “giving them special considerations not afforded to any taxi industry member.”

“Since they had rules and regulations in place for Hailo at that time, all that was required was for the City to apply them to Uber, and if they were in violation, charge them in the courts, but they never once took Uber to court for any violations,” he alleges. “When you consider Toronto’s taxi industry is already saturated with cabs, how Uber and eventually other PTC’s were allowed to enter the industry was criminal at best.”

But then Manley believes the City, “has never cared about the taxi industry.”

“They don’t really care if your life’s work has gone down the tubes. That manifests itself into the fact, you can’t leave your life’s work to your wife and kids (because it has no real value
remaining),” he continues.

He alleges the City allowing 72,000-plus PTC vehicles on the streets is not only cruel and inadvisable, but “illegal”.

“The 30 cents per PTC run comes under the licensing tariff. And licensing in the province of Ontario must be done on a cost recovery basis,” he says. “How much energy does it take to deposit a cheque in the bank once a week?”

He maintains the disparate taxi and PTC business models simply cannot co-exist, and that the City must, “pick one or the other.”

As a starting point, he suggests the self-regulatory powers granted to PTC companies be immediately revoked, “because the only way the City can responsibly control the numbers is by issuing the licenses itself, not (having the PTC’s do it).”


© 2019 Taxi News



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