Province sanctions ride-hailing app that Katers to taxi-industry lobbyists

Eventually, we find, true colours do shine through.

Like this case: The fix was in, the powerful continue to cut up the cash, and the consumer gets the shaft.

Late Monday it became clear that the provincial government was not going to bring about ride-hailing writ-large; it was going to rig the competitive landscape by endorsing a new, little-proven local player, underwritten by a wealthy Surrey businessman who had been connected to the industry by a longtime BC NDP luminary.

What we will get is not ride-hailing as we know it in other cities, but a taxi-protection covenant that surrounds the incumbents with market and regulatory advantage, abetted by an upstart local smartphone app called Kater.

It is clearly aimed as a made-in-BC NDP measure to make Uber and Lyft simply want to forget about coming. On the other hand, I’m not so sure they won’t forget about suing. The political manoeuvre, too clever by half, pretends there was a good-faith exercise to introduce competition, then sanctions another layer of a monopoly to stifle it.

Our senses ought to have sharpened to this solution when the seeds of the deal were revealed last summer between the Vancouver Taxi Association and the fledgling ride-hailing app.

But no, some of us continued to believe the BC NDP government was earnest, if ponderous, in its determination to introduce ride-hailing to the province.

We swallowed its argument that it was not attached at the hip to the taxi industry, that it was listening to consumers who wanted choice and greater service and drivers who wanted flexibility and side-hustle opportunity through Uber and Lyft.

When after the election it studied the issue yet again, a full decade after other cities had made the move into ride-hailing, we should have been more than a little suspicious that it was buying time for a reason.

When last fall it set out its baffling blueprint for the glacial introduction of ride-hailing, we might have known there was an end-game it knew that we didn’t.

That’s when we might have remembered that the industry has friends in high places, among them Geoff Meggs, a longtime advocate of the taxi business as a Vancouver councillor and now the premier’s chief of staff.

We might have tweaked, too, when it was revealed it was former NDP cabinet minister and party president Moe Sihota, no stranger to controversy, who introduced Kater to the taxi association.

We should have recalled that undermining the monopoly of the taxi industry is a political third rail, as the BC Liberals discovered when their pledge for ride-hailing in the last election won them nothing and arguably lost them two key Surrey ridings.

We would have been well to realize that even though the BC Greens in the government’s minority alliance have called and called and called again for ride-hailing today or yesterday, the NDP was not going to flirt with political pushback.

Well, now we know, now we get it – or at least we will get it, as in Kater cabs, 140 of them in the Lower Mainland to start, filled with drivers supplied by the incumbent industry, charging roughly the same rates and bearing all of their same driver and insurance requirements. One-fifth of the profits will go to Kater.

Face it, this business is hardscrabble, run by those who hold pricey medallions that cream much of the profit and leave enervated drivers with little, while ride-hailing operations have been ruthless in their ascension in building public trust. I’m still looking for the angels here.

But props to the taxi industry. It knows how to work the game. Its behind-the-scenes efforts with government have earned it the necessary protection to avert true disruption. Local knowledge outflanked the international invaders. Those taxi licences are no longer going to be worthless.

Even if the political optics are not optimal, the Kater moves probably satisfies just enough for this issue not to be a major matter at election time.

Meantime, this new player, in conjunction with the existing industry, gains a head start to establish a market, a presence, and a distinct edge. The earliest anyone can apply to compete is October, which means the earliest Uber or Lyft will surface will be some time in 2020 – if, now, ever.

We will not get better rates. We will get a modest modernizing makeover of an old-style industry, propped up by first-mover advantage.

Aren’t we the idiots for not seeing the haymaker as it was launched in slow motion? How did we ever not see coming what walloped us?

Kirk LaPointe is editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media.