A new era in getting from A to B

Yesterday, Edmonton became the first municipality in Canada to allow ‘Transportation Network Companies’ like Uber to operate legally. We didn’t set out to be the first, but after more than a year of analysis and consultation, it was time to end the uncertainty. This new bylaw represents significant reform for our vehicle-for-hire industry, one that responds to a rapidly changing economy and increasing demands from Edmontonians for more choice and greater customer service. But behind the national headlines this bylaw generated, the discussion was complex and nuanced.

At the heart of Council’s debate on Wednesday was pricing, and specifically whether we should set a minimum and maximum price that private transportation providers (i.e. Uber) would have to charge in order to avoid predatory pricing and protect consumers from surge rates. In the end, Council voted to charge a minimum fare of $3.25, a signal that free rides would clearly be predatory, and opted to further re-evaluate the pricing structure in six months. For me, it was important that we make evidence-based decisions on what a ‘fair fare’ should be versus speculating what the right number is. When it comes to the vehicles-for-hire business in general, our data sets are woefully inadequate – and every good transportation decision should lean on good data. We will have a better window on this ‘new’ industry once that data starts coming in.

There is no doubt this bylaw will have a significant impact on the taxi business as we know it today. Taxi plate resale values will inevitably decline – in fact, we hear anecdotally that they already have corrected somewhat over the last year. Given this, some drivers may choose to leave the industry. But the thousands of other drivers – the ones who have been renting other peoples’ plates for 20 years – will now have more choice when they drive, how long they drive and for whom they drive. This bylaw is as much about choice for non-plate-owning taxi drivers as it is choice for consumers.

Yesterday’s changes usher in a new era for the taxi business, one of competition and value. While private vehicles-for-hire can and will surge their pricing, often to well above the metered rate, taxis will continue to offer passengers stable, predictable pricing – regardless if it’s 1am on New Year’s Eve. Taxis also have exclusive access to queue stands in entertainment districts and the right to pick up street hails – neither of which Uber will enjoy. My hope is that taxi companies will use this opportunity to rewrite their marketing plans and really, truly invest in the kind of technology needed to compete. Because they can.

For all the fanfare this bylaw has generated, yesterday’s vehicle-for-hire bylaw also serves some very practical purposes. It gives us a better enforcement tool to punish both drivers and companies who do not abide by the rules. It ensures we regulate the safety of these vehicles and – by demanding proof of provincially-appropriate insurance – that passengers and the public will be protected in the case of a collision. Fines for violating these rules are five times higher in the new bylaw, indicating how seriously council takes compliance for public safety.

One shared frustration on Council (echoed by me more than once) was that Uber did not enter this market fairly and forced Council’s hand. But whether it was Uber or Lyft or any other private transportation provider, this change was bound to come. The market, and our public, was demanding change. Our job – therefore – was to craft a bylaw that wasn’t in the best interest of any single company, but one that reflected a 21st century city. As I said yesterday, that means enabling rather than constraining competition, and enabling rather than constraining innovation.