Lawyer
Taxilogoweb2014

June 2019

Mississauga denies plate owners’ request for financial compensation

by Mike Beggs

Mississauga has categorically denied a request for compensation from its taxi plate owners.

Due to the open entry granted Transportation Network Companies (Mississauga’s designation for PTCs) like Uber, plate values have plummeted by 90 percent since 2014, and lease rates by 80 percent. But at the May 15 meeting of Council’s General Committee, the City’s Legal department shot down the owners’ request, stating that, “The City does not have the statutory authority to compensate the taxi industry” for its massive losses.

At the February meeting of the Public Vehicle Advisory Committee (PVAC), Aeroport Taxi owner Sami Khairallah requested compensation of $50,000 to anyone who owned a plate at the start of the ongoing TNC Pilot Project. He said the industry has “hit rock bottom”, thanks to the City’s decision to grant open entry to Uber and other ridesharing companies.

The PVAC adopted a motion directing staff to examine what jurisdictions in Quebec, the U.S,, and Australia have done to provide financial relief to taxi plate-holders. But it appears Mississauga owners will be left out in the cold.

“Any decrease in the market value of taxi owner licenses in the secondary market is beyond the City’s control, for which it cannot be responsible,” writes Mississauga’s chief solicitor Mary Ellen Bench, in an April 30 report. “The City’s statutory powers under the Municipal Act to license taxicabs does not extend to addressing economic interests facing the taxi industry…And to (provide compensation) would contravene the anti-bonusing provisions in the Act, and would also constitute an indirect tax, which a municipality does not have the authority to impose.”

Her report observes that, while a small number of jurisdictions around the world have provided such compensation, it has been done at the Provincial, or State level, and there are no municipalities doing so.

This decision was no shocker to long-time plate owners.

“I’m not surprised at all. The City has (repeatedly) said they have no liability. It was basically a foregone conclusion,” says All-Star Taxi marketing manager Mark Sexsmith.

“They’re clearly within the bounds of the law, but within the bounds of moral responsibility, they’re culpable. But they’re washing their hands of the whole situation.”

Plate owner Peter Pellier had previously represented to the City that compensation would provide “closure and justice” to cab owners, who “deserve much better given their years of service.”

But on a more pragmatic level, he wonders why the City went through this exercise again, given Legal’s past position on the issue.

“By moving forward and having a staff report on it, they got people’s hopes up and that I thought was unfair,” he says.

“This has never been a secret. Why was staff not clear that the City does not have the authority?”

In Pellier’s eyes, it’s a “critical difference” that the compensation in Quebec was awarded at the Provincial level of government, and not by the municipalities.

“I think the Province is much better equipped (to deal with this financially). In Quebec, it’s $700 million. It’s a substantial chunk of money, which a province can afford.”

Mississauga owners were asking for a total of about $34 million.

“My theory is if the City wanted to do it, it could have increased the levy on Uber and Lyft. It has been done in other jurisdictions. Unfortunately, they just said they can’t do it,” he comments. “I think if Hazel (McCallion) was still the Mayor, it probably would have happened.”

“Ironically, here in Mississauga they’re claiming they want to be independent from the Region of Peel on the one hand, but they’re willing to work hand in glove with Toronto and several other GTA municipalities on the taxi issue, on the other hand,” he adds. “They’ve all basically turned their backs on the taxi industry -- except in Burlington.”

Sexsmith concurs.

“These (GTA) politicians have shown no remorse whatsoever in the mismanagement of the entire for-hire ground transportation file,” he alleges. “This should be the nail in the coffin in Mississauga. They admit they have not got the authority to compensate us -- it’s time to bump this whole file up to the provincial level.”

General Committee also approved the TNC Pilot Project Final Report, dated May 1, 2019. A bylaw will now be enacted to provide for the ongoing regulation of TNC’s – with some 60 amendments to be made to the existing code.

The staff report noted there are currently three licensed TNCs operating in Mississauga, with an average of approximately 21,000 TNC vehicles operating in any given month. The average number of TNC trips per month is 700,000, and enforcement officers currently conduct an average of 1,000 TNC inspections per month.

And staff concluded that, based on the compliance rates, field inspections, data collected, and interaction with licensed TNC’s, “it is assessed that TNC’s effectively complied with the bylaw requirements throughout the Pilot Project.”

Other key findings where that:

In 2018, there were a total of 10 million dispatched VFH trips reported in the city, a 7.7 million trip increase since TNCs began operating.

Public engagement results show there was an average 92 percent satisfaction rate with TNC’s.

TNC’s can be regulated effectively, and the additional resources required to do so will be fully offset by license fees collected.

The City will continue to support the taxi industry by leveling the playing field” through Pubic Vehicle Bylaw regulations.

Given the mess in Toronto since its VFH Bylaw took effect in July of 2016, Mississauga taxi industry members may well take issue with that latter statement.

“They’re definitely changing a lot of things,” Sexsmith observes. “Some are inconsequential and some don’t make any sense.”

He points to benign amendments like plans to close the priority list for Standard taxi plates.

“Do you think anybody is going to pay $200 to be on the priority list now?” he asks.

On the other hand, he was pleased to hear councillors are recommending a $300 rebate on licensing fees to owners with a plate sitting on the shelf.

“(But) the big issues are insurance, and the number of vehicles out there,” he continues. “The insurance (rates) limit the number people we see coming into the taxi industry. We pay $5,000 to $6,000 on insurance.”

Pellier was disappointed to learn the City is planning to level the playing field from an enforcement standpoint, as opposed to capping the number of PTC drivers on the road.

“As long as Uber, and Lyft can operate with an unlimited numbers of vehicles, what chance does the taxi industry have?” he asks.

“There’s 21,000 of those guys out there,” Sexsmith agrees. “You’ve got 10 bylaw enforcement people. They will be hard-pressed to check each driver once a year.”

Staff suggests the Bylaw regulates far too many facets of the taxi business. “They have drifted into issues more properly belonging to management, such as the deportment of drivers, vehicle appearance, and providing lower levels of driver training such as effective route mapping,” the report reads.

Pellier strongly disagrees.

“Everybody talks about consumer health and safety. But if you eliminate driver training, and vehicle inspections are you really doing the public a service?”

“I contend regulation is critical. It’s extremely critical in the airline and rail industries. The airline companies don’t screw around, because they know they can be shut down by the federal authorities.”

According to Staff, the massive 7.7 million increase in VFH trips since the advent of TNC’s indicates, “a new Vehicle-For-Hire market has emerged.”

“TNC’s did not simply capture 15.3 percent of the existing market share, but rather they capitalized on an untapped market that beforehand consisted of individuals walking, taking buses, and using personal vehicles,” the report reads. “When considering the economic impact on the taxi industry, it is important to recognize it only represents 3.5 percent of the total VFH market in the city.”

However, Staff expressed no concerns regarding the drop-off in the use of public transit, nor the increase in congestion and pollution reported by major cities across North America where TNC’s have been granted unlimited entry.

Pellier notes that, according to the staff report, Mississauga has 550 plates in the city proper and 85 of them are on the shelf – comprising about 15 percent of the plates.

“That’s outrageous. That tells you all you need to know,” he says. “And most of them have been there for quite some time, because who is getting a taxi license in today’s market? If they want to drive, they’re going to Uber or Lyft.

“How can the cabbies compete? The only way to help control the situation is to put a cap on TNC’s, and the City is not prepared to do that. Once again we have two industries, and one clearly is getting preferential treatment.”

At General Committee, Councillor Carolyn Parrish said that she would approach the Province about making the necessary changes to the Municipal Act, to allow a city to pay such compensation.

“Everybody on Council has more or less the same sympathy for the situation. And they play down the fact they dropped the ball on bylaw enforcement, when Uber came to town. But there’s nothing to do about it,” Sexsmith comments. “The report on compensation is quite clear.”

“So, basically we roll over and move on with business as usual, or go to court.”

 

© 2019 Taxi News

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