Calgary bylaw change could signal fare war among taxi drivers

Changes to Calgary's livery transport bylaw came into effect on Monday and that means taxi operators are now permitted to set their own fares.

That could trigger a price war in Calgary's cab market, with many companies already saying they'll lower fares in response to sluggish business and a struggling economy. 

The old minimum rate of $3.80 for the first 120 metres or any portion of a trip, is now the maximum rate.

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Back in September 2014, city council approved an 8.1 per cent hike to taxi rates due to fuel price increases.

"We all know the price of fuel has drastically gone down, plus we're facing a huge downturn in the economy," said Associated Cab owner Roger Richard.

His company will lower its rates by 12 per cent beginning next Monday and it should take the rest of the week to change the meters in all of the company's vehicles.

Amar Grewal, the manager of Delta Cab, said fares in his taxis have already dropped 15 per cent.

"Our hope is that when our customers see that a taxi is going to be cheaper, then more people will start to use a taxi rather than other means of transportation," he said. 

Checker Yellow Cab has said it will lower rates, and Mayfair Taxi is considering the same thing.

Better competition, better customer service

Richard brushed off the idea that deregulated rates could cause a fare war among cab companies. He said most customers have a preferred company and that he expects that will remain the same.

"Customers as a rule have a preference for which company they use and that's going to keep going on," he said. "What our position is we've got to be better and give better customer service than the competition, and that will define which company customers use."

Grewal said he doesn't think prices will dip drastically.

"It is a free market and that's how it works," he said, noting that the companies that have dropped fares so far have done so by 10 to 20 per cent. "It's going to dip down but eventually, I guess it's going to even out."

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Impact on drivers

Both Richard and Grewal hope the decreased rates will give rise to increased trips.

"All taxis are self employed," Richard said. "We are going to attract more people to use taxi instead of using other means of transportation so I don't think their income on the long term is going to go down."

Richard said his drivers agree with the changes.

"I think as a whole I think the industry is pretty realistic. We have to be proactive at making sure the customer is well served."

Grewal, too, said his company is optimistic that more people will choose a cab as a result of the lower rates. 

It all comes down to competition, said Richard.

"We've got to be more competitive in our industry, and we welcome competition," he said. "This gives us the flexibility of doing more for the consumer."

With files from the Calgary Eyeopener