The City of Ottawa will make recommendations about taxi licensing and UBER within the next few days. We have all read of the tensions, unpleasantness and occasional violence between licensed taxi drivers and UBER contractor drivers. While it would be good to see a peaceful settlement between licensed and contract drivers, if the settlement is to the detriment of those who wish to hire taxicabs – the consumers – then the settlement is not really viable.
UBER would not be anywhere near as attractive to consumers if Ottawa citizens were happy with licensed taxi service in the city. Sure there are many licensed drivers who provide good, even excellent, service. But we have all had rides in dirty, poor maintained licensed cabs. We have all had to tolerate slovenly and ill-tempered drivers who talk on their phones while driving. We all have had long waits for a driver to show up. And some of us have complained about the service, only to hear nothing back and see nothing change.
UBER offers a faster, cleaner and more courteous ride. A complaint about an UBER driver is taken very seriously. UBER is often less costly than a licensed cab, but that is only a part of the reason for the popularity of the service.
However, the UBER service comes with a social cost. Licensed cab companies and employee drivers pay into social programs such as employment insurance, pensions and health care. Their cars are also fully insured for carriage of passengers. The holders of taxi licenses have paid in good faith substantial amounts to gain and exploit their licenses; this cannot be dismissed. UBER drivers are contractors who operate without a social safety net, and are not insured as commercial drivers. The UBER system places no floor on rates and earnings for contractors; indeed, there is a downward trend so significant that some UBER contractors are attempting to unionize. The UBER Corporation does not contribute to social programs because it has no employees. Neither the UBER Corporation nor its contractors pay for licenses to operate taxi services in the city.
UBER just arrives in a city; it seeks no government approval to provide services; it operates outside the municipal laws on taxi services. It can be argued that the UBER Corporation is engaging in ‘corporate nullification’, where a private company simply ignores government rules – relying on popular support for legitimacy. The Apple Corporation wants to do this as well, seeking to exempt its products from lawful search warrants.
In my view, UBER damages the social fabric and corrodes the role and legitimacy of government. As such, I would tend to support municipal sanctions against it. However, if the alternative to UBER is the continuation of the current level of ‘service’ provided by the licensed taxi industry in Ottawa, then there is a problem. The current licensing system also corrodes the legitimacy of government, by licensing poor service.
I doubt if there is a win-win solution. Some messy progress might be possible if current UBER contractors were sold one-year licenses under circumstances where insurance is normalized and contractors have some protections. During that time it would be incumbent upon taxi license holders to upgrade the services of their industry. Failing that, then the market should be opened.