May 2017

Innisfil turns to Uber to provide subsidized public transportation

by Mike Beggs

The Town of Innisfil’s new partnership with Uber to provide public transit could have far-reaching implications for the future of the chaotic evolving world of the vehicle for hire industry.

Certainly that’s the fear of more than a few GTA taxi operators.

In early April, Innisfil Council approved this motion to bring subsidized, on-demand transit service to its 36,000 residents via Uber, as an alternative to starting up a traditional bus-based system. Slated to kick off on March 1, it’s the first such partnership between Uber and a Canadian municipality – although similar setups are in place in some cities in Europe and China.

A 2015 transit feasibility study had determined it would cost $270,000 per year to run a startup bus service along one short fixed route, north to Barrie. Staff argued that contracting out runs to Uber would be a more cost effective way to go, suggesting, “there’s real opportunity out there to match people up.”

Mayor Gord Wauchope said the Town was being heavily pressured to implement a public transit system. But he questioned the wisdom of taxpayers shelling out for a bus run many of them would never take, and commended his planning staff for thinking outside the box.

“It wouldn’t service everyone in town,” he reasoned. “You can’t have taxpayers paying for a transit system which they cannot use.”

Under the terms of the new partnership, the Town will pay Uber $100,000 this year, and $125,000 in 2018 to operate its Uber Pool service across Innisfil.

Residents will pay a base fee of $3 to $5 for rides to key locations (like city hall and the Go station), with the Town making up the balance to Uber. For those who don’t have a smartphone, Uber will provide iPads in several locations around town.

Innisfil senior policy planner Paul Pentikainen suggested Uber Pool’s ability to match two or more rides going in the same direction represents a better solution than traditional bus service. The Town said it will count on local taxi companies to provide accessible taxi service, which Uber does not offer.

Uber Canada spokesperson Susie Heath said the company is “thrilled” to be partnering with Innisfil on this groundbreaking initiative and will continue dealing with other Canadian cities and transit authorities across Canada to explore similar partnerships.

However Manjot Saini, the owner of Global Taxi, worries about the future of his business, and is considering slowly taking his cars off the road. He told CTV Toronto, he wonders how long his drivers will stay with him, when they’re already paying higher insurance rates and struggling to make ends meet.

When asked about it, Toronto Mayor John Tory said his City should examine the Innisfil model.

“We have to open our minds to new ways of doing things,” he told NEWSTALK 1010.

Given the City’s Uber-friendly direction to date, there is speculation Toronto could follow Innisfil’s lead.

“You never know with Tory,” says Independent Toronto Taxi Inc. president Mike Tranquada. “Why not go the whole way?”

Retired shift driver Peter McSherry suggests it would be in keeping with the City’s modus operandi.

“Mr. Tory is a collector. He’s collecting on the garbage people, and (trying to) collect on the tolls,” he alleges. “I have no confidence in this regard.”

“They all think short term (at Toronto city hall). It’s a wonderful thing -- if it’s done short-term.”

Veteran owner/operator Gerry Manley observes, “It’s possible this is Toronto’s hidden agenda, and that would explain their lack of action to correct our industry’s issues.”

He points to a Toronto Transit Commission (TTC) meeting last fall, where there was a discussion about a pilot program to service remote corners of the City with Uber cars. When Beck Taxi owner Gail Souter pointed out that under the bylaw any such contracts should go to licensed taxis, a member of the TTC committee responded that using Uber was “just an example”, and of course they would consider the taxi industry.

“What if that wasn’t just an example, and they had well before that meeting been in meetings with Uber to contract this service to them, and circumvent the City’s taxi industry?” he asks. “I don’t think that (far fetched). I’m thinking we just caught them with their fingers in the cookie jar.

“This certainly would explain how (Uber) got to operate for over three years with no rules, just to get their feet in the city’s transportation grid.”

Manley warned that such a program would end up costing the City money.

“(But) if they feel they can make more money, that’s the route they’re going to go,” he concurs. “Because they only look at the penny in the hand today, and not the dollar it costs them tomorrow.”

For her part, Souter doubts the Innisfil model will spread around Southern Ontario.

“I think it’s kind of a wait and see thing, and when it fails miserably they will abandon the idea,” she tells Taxi News. “Uber has not been very successful in any of the rollouts they have done. Even the pooling, the drivers hate it -- there are altercations in the vehicles. And when you have a problem, you can‘t call the office like with us -- there’s nobody to reach out to.”

“I don’t know how they’re going to have iPads at bus stops,” she continues. “They’re going to get smashed, or stolen. And, (many seniors) won’t be able to use them.”

But veteran Oakville owner/operator Al Prior expects this model WILL catch on in other communities.

“They say it’s cheaper than running buses. But, bus drivers get $25 an hour. Basically, they’re exporting our GDP to another country. This is getting completely out of hand,” he comments.

“We’re paying licensing fees, and these politicians they’re just ignoring there’s such a thing as taxis, and ruining our business model…It should be taxis doing that (work), if anything.”

He alleges that our politicians, “feel they have public support to actually break the rules.”

“It’s not taxis alone, the hotels are in the same boat as us,” he adds. “If they keep it up, we will lose our sovereignty,” he adds.

Mississauga owner Peter Pellier can’t understand why the municipalities are willing to “play ball with this company”.

“They are really turning a blind eye to the reality of it,” he says. “Cabbies can’t break the law -- you can’t get a license in the first place. But Uber can break any law it wants to, and not only that, the governments go out of their way to accommodate them.”

“Obviously, the local councillors are being pressured to have a bus service. I don’t know why they didn’t go to Vaughan, and enter into a contract. No, they went to Uber. It’s very inappropriate under the circumstances.”

Pellier suggests Uber is or will be having discussions with the TTC about serving customers in “unprofitable areas”.

“Uber is not confined to sedans. If there is an opportunity to get TTC work, they will be investing in minivans or multi-purpose vehicles,” he predicts.

“They’re underlying agenda is to build a customer base in preparation for the driverless vehicles. They’re one of four or five major players that are investing who knows how much money in this technology. And when it does happen it’s a total game-changer. You want to go from A to B, you hit an app for short, medium or long distances.”

Long-time taxi driver Louis Seta, now with Uber, suggests, “This is the beginning of a new era for the municipalities, because if they can download their responsibility for providing public transit to a third party, that cuts out a lot of their operating costs. The TTC is trying to offload expenses.”

“Where is the industry as a whole?” he asks. What is going to happen? Is it going to the point where everybody becomes an employee of one big transportation grid?”

Innisfil Council plans to reexamine this issue on December 9, when it debates the 2018


© 2017 Taxi News


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