Uber uncertainty over American firm's entry into B.C. market

Licensing, regulation, impact on local alternatives atop list of ride-sharing concerns

The BC Liberals are promising to bring in Uber by the year's end | Photo: Shutterstock

It’s a service that allows passengers to dispatch vehicles with their smartphone, track cars en route to their destinations over GPS and rate their drivers after the trip ends.

It sounds a lot like Uber or Lyft, but Ripe Rides business operations director Nitesh Mistry likes to think of his company as a “made-in-B.C.” alternative to those sometimes-controversial American ride-sharing services.

So with the BC Liberals promising to usher in ride-sharing services by year’s end if they’re re-elected, will the American giants crush the local upstarts?

“When we’re talking about larger competitors, multinational companies working in multiple cities, countries around the world, it is always a challenge for a smaller startup to compete on that level just based on the size of the company,” said Mistry.

“I would like to hope we’re well positioned to be leaders in this new regulatory framework, being an incumbent operator.”

The critical distinction between Ripe Rides and Uber is that the province’s Passenger Transportation Board granted the Vancouver-based company 20 licences in 2015. The licences are valid only for luxury sedans that must charge higher prices than taxis but less than limos.

Last December, Ripe Rides applied for 150 multi-city taxi licences that would be valid for pickup and drop-off across Metro Vancouver – a first for B.C. – and compete more directly with taxi prices.

Mistry said there are enough question marks hanging over the province’s ride-sharing services announcement that Ripe Rides won’t be withdrawing its application for the 150 taxi licences in favour of the ride-sharing option.

Meanwhile, the government said it’s going to help the taxi industry to stay competitive as ride-sharing services work their way into the market.

Among the initiatives announced was an investment of up to $1 million to develop a new app for the taxi industry with shared dispatch, as well as hailing and payment options similar to what other ride-sharing services offer.

But lawyer Bill McLachlan, who represents the BC Taxi Association, said an app is nothing new for the taxi industry.

He also pointed out that one of the other announced changes – phasing out Class 4 driver’s licences – is really aimed at benefiting ride-sharing services, as opposed to taxi drivers.

The Class 4 commercial licences are more difficult to obtain than the Class 5 licences most British Columbians carry.

Instead, Uber drivers 19 years and older would need to have a licence with no restrictions, pass a criminal record check and be subject to vehicle inspections.

The province also said it would work with municipalities to allow ride-sharing drivers and taxi drivers to pick up and drop off in different cities.

Currently, a Vancouver taxi driver can pick up in Vancouver and drop off in Coquitlam. But the Vancouver driver can’t pick up a passenger in Coquitlam while driving back to his home base.

“The ability to pick up beyond municipal boundaries is a huge issue,” McLachlan said, “and there’s going to be procedural limitations in how that can be invoked because a lot of the cities have an ability to control a number of taxis by having bylaws with caps on the number of taxis.”

Community, Sport and Cultural Development Minister Peter Fassbender, who handles the ride-sharing portfolio in cabinet, told Business in Vancouver on Roundhouse Radio 98.3 FM that the province would continue working with municipalities to introduce the provision.

“There will be a new regulatory framework,” Fassbender said.

“Exactly what that looks like is the work that we’re still doing. But the province is going to be playing a much more active role in setting the standards and removing the limitation on the number of taxi licences that might be available.”

Last October, Vancouver city council placed a one-year moratorium on issuing new taxi licences.

City of Vancouver Coun. Geoff Meggs told CBC’s The Early Edition that opening up the industry to multi-city pickups and drop-offs would be difficult to co-
ordinate among all the different municipal governments.

“In an open boundary situation, everyone will go to the Granville entertainment district or a cruise ship, or you’ll face surge pricing,” he said.

Garland Chow, a professor at the University of British Columbia’s Sauder School of Business, said each municipality wants to have guarantees of services dedicated to it.

“The law of the land in any business is you go where the demand is,” said Chow, who specializes in transportation and taxi regulations, “and when you give a carte blanche regional licence that permits you to go any place you want in a much larger region, there will always been underserved and over-served regions.”

He said the introduction of ride-sharing services and open boundaries for taxis would likely result in a busy district like the Granville strip being flooded with vehicles on Fridays and Saturdays.

Meanwhile, other cities will be in short supply of much-needed taxis and ride-sharing services during those periods.

When asked about concerns that a taxi driver could hypothetically buy a licence in a small city like Chilliwack and work almost exclusively in Vancouver, Fassbender said the threshold to get into the business is not going to be low.

“It will be significantly high enough that people aren’t just going to play in the business. They have to be serious about it, as the current taxi companies are. [Taxi companies] want to keep the system the way it is. That’s not reality. Change is here. It is going to continue to happen.”