City of Ottawa recommends legalizing Uber

The City of Ottawa is "taking the handcuffs off" the taxi industry by moving ahead with a proposal to allow app-based ride-hailing services such as Uber to operate legally, Coun. Diane Deans said Thursday at the end of a lengthy bylaw review.

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"Let's be clear: the public has overwhelmingly indicated that they want greater choice in their transportation options," said Deans, the ​​chair of the community and protective services committee, at a technical briefing on the city report on the review.

"In moving towards a more modern, innovative and competitive market environment, the city no longer believes that the same level of regulation that existed in the past will be necessary in the future."

Drivers of all vehicles for hire would have to undergo a police record check and provide a copy of their driving record, and couldn't operate vehicles older than 10 years. A minimum $5 million of liability insurance would be required for all vehicles for hire.

Private cabs such as Uber would only be able to offer pre-arranged rides through an app — meaning customers couldn't hail one on the street — and would not be allowed to accept cash payments. Drivers would also have to pay a ten-and-a-half-cent charge per ride, and an annual licence fee to help cover the cost of inspections and enforcement. 

Deans said the changes will come with a "buyer beware" warning, as the city won't interfere with fare disputes between passengers and private cabs. The report does not recommend limiting surge pricing — an increase in Uber fares when demand is high, and a common complaint among Uber customers.

Traditional taxis could start offering pre-arranged reduced prices through an app, but metered fares would continue to be capped at a maximum rate.

'Nothing' for taxi drivers

The taxi industry has been calling on the city to crack down on Uber drivers for operating without permits since the service launched in Ottawa in 2014, mirroring movements in cities across the country where the ride-hailing service operates.

Bylaw officers have fined dozens of Uber drivers for operating an unlicensed taxi cab and being an unlicensed taxi driver but the service levels still remain high in Ottawa.

Details of the review come the day after a judge dismissed an application by the Ottawa taxi union to ban Uber in the city. Justice Robert Smith said in his Wednesday decision that the city's report is relevant to the case.

The report recommends reducing taxi driver license fees from $170 to $96 for standard cabs, and $170 to no charge for accessible cabs. Taxi drivers would also no longer be required to undergo training, unless they are driving accessible vehicles.

The report also recommends eliminating the $1.50 service charge for debit and credit transactions in taxis.

Amrik Singh, president of Ottawa's taxi union, said he needs to closely read the 116-page report, but was not initially pleased with what he saw.

"There is nothing for taxi drivers. What did we do wrong to deserve this? Why would we want to accommodate a foreign company who's not paying a single cent to Ottawa's economy?" he said following the technical briefing at City Hall.

Uber Canada spokesperson Susie Heath said the company is reviewing the report but applauded the "recognition of the public demand for new technologies, and for working diligently to find accommodation through changes in regulations."

The recommendations will be debated by councillors at a committee meeting next week, and, if approved, move on to council on April 13. The new regulations could be in effect as soon as June 30.

KPMG's policy options

Consulting firm KPMG, which was hired by the city to explore policy options, made three suggestions on how to reform taxi regulations in a report published last fall.

• Establish a new licensing category for app-based services, such as Uber.
• Reform the current taxi system to include features present in Uber, such as driver rating, app-based credit card payment and reduced fares. 
• Do away with the limit on the number of taxi licence plates.

The report detailed that through the plate limit is meant to prevent the taxi market from being flooded, the system has a poor reputation as growing cities rarely increase the number of plates fast enough. Still, the report acknowledged that eliminating the plate system could threaten the investment made by taxi drivers who own them.

Read the full report here.