Why cities need to regulate Uber: Valverde
Valverde: 'Cities need to be careful to not be overly influenced by Uber owners'
Why does Uber have no competitors in Canada? How powerful is its lobby? Should the company be regulated? And, when cities go to court with Uber and its drivers, who wins? Mariana Valverde, a professor of Criminology at the University of Toronto, has written about Uber. The CBC's Conrad Collaco spoke with her in an effort to answer all of these questions and more. Here's an abridged and edited transcript of that interview. Listen to the full interview by clicking the link at the top of this page. On mobile? Listen here.
Mariana Valverde: professor of Criminology at the University of Toronto
Q: Why is the battle for the regulation of Uber in Toronto important for other Canadian cities?
It's not the first one. Edmonton started the process of trying to regulate Uber but Toronto is the biggest market in Canada and one of the biggest in North America. We had all these lobbyists here. A newspaper story said there were up to 300 lobbyists knocking on the doors of city councillors to try to have either no regulation or minimal regulation. From the economic point of view Toronto is the economic fighting ground for this.
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Q: Does the taxi industry stand any chance of preventing Uber from gaining a permanent place in Canadian cities?
I don't think, in the end, the taxi industry is going to prevail. They're trying to have cities prosecute Uber drivers for operating a taxi without a license.
I'm not sure that is really going to work because Uber has a lot of political support including from Mayor John Tory. Probably, what will happen is that some regulations will be put in place allowing Uber to operate. Right now, it's no wonder they can offer rides for cheaper because they pay no commercial insurance, they pay no license, they don't have to take a special test like taxi drivers do. Right now they are essentially raking in the profits. I mean, Uber in particular. It's not sustainable. You can't have a completely unregulated sector. Once it becomes a big business you have to regulate it to protect both the consumers and the workers. If the workers end up working more-or-less full time, then they need some protection.
Q. How have American cities protected workers and passengers?
They regulations I've seen in the U.S. don't protect workers at all. They only protect consumers like vehicle checks and criminal reference checks for the drivers. Some cities have stuff about drug and alcohol tests for drivers. In general, in the U.S., the consumer protection is there but there's hardly anything by way of employment laws. In Canada, we have somewhat stronger employee protection laws. Maybe the Ministry of Labour should get involved. Once it becomes regulated more people will do it like full-time work, especially if you need a license with commercial insurance. Then you don't do it for a week to make a bit of money. You do it as a livelihood. If you do that you need employee protection and that is something that Uber is not going to be keen on.
It's quite worrying that there's only one company involved in this. In the taxi industry you have four or five companies, at least in the bigger cities. Uber seems to have driven the other ride sharing companies into the ground. It's the only one big player. It's as if you had only one bank.
Q. What competition does Uber have in the U.S.?
I think in California there are some other companies still operating. That is a healthier situation. I don't know why in Canada, Uber has taken over the whole space. I don' t know the economics of that. It is unregulated so it's not like you can obtain a lot of good data on it.
Every time you have a category of business where there is only one (operator) it's highly problematic because that business can have great influence and use the regulatory system to prevent any competition from arising. Cities need to be careful to not be overly influenced by what the Uber owners say (on regulations).
Q. In Hamilton, the city has charged several drivers. They could face fines of more than $25,000. What do you expect will happen in a legal battle between cities like Hamilton and Uber?
It will be interesting to see what happens to the charges. If there are convictions, I bet Uber will put money up to appeal the convictions. The city of Toronto put an injunction up to stop Uber and the judge denied it on some weird argument saying 'unless you are using a phone call to book the car you are not really booking a taxi' which is bizarre because you can order a limo through your smartphone. It will be interesting to see what happens in other places. The courts are not well equipped to deal with this kind of thing. It needs to be handled as a policy matter. You need to look at existing taxis to create better conditions for the existing drivers too, not just for Uber. You can't have regulations being drawn up for one company. You need to think more broadly. It's very complicated, really.