Levelling the playing field: Oshawa’s ridesharing conundrum

By Dave Flaherty

For the past few years, the City of Oshawa has grappled with how to handle ridesharing companies such as Uber or Lyft.

Technically, at this point these options are not legal in the municipality under the existing taxi-cab bylaw. Despite this, they are used extensively throughout the community.

Drivers for Uber and Lyft face a $300 fine if found to be in violation of the bylaw, but that may change in the future.

At a recent meeting of the city’s corporate services committee, manager of policy and research Kenneth Mann set the table for two options for council moving forward.

The first would continue the current requirement of screening rules for drivers of a vehicle for hire company, such as taxis, ridesharing, designated drivers or limousine companies.

These screenings would also happen annually instead of every two years.

The proposed new bylaw would remove the requirement of taxi drivers to take city-mandated courses at Durham College, and first aid classes, except for those driving accessible cabs.

It would become the responsibility of the taxi companies to train drivers.

Criminal record and driving abstract reports would be required for drivers. The yearly license fee would be changed from $150 for two years to $75 annually.

The second option would see ridesharing companies regulated under the taxi-cab bylaw.

Because this bylaw requires drivers to have city-inspected meters, it would essentially ban Uber and Lyft under the companies’ current business models.

Mann explained most large municipalities in Ontario, including Toronto, Mississauga, Ottawa, and London, have bylaws regulating ridesharing companies.

He also noted most of these bylaws have “common elements.”

One big difference between taxis and ridesharing companies is Oshawa has a cap on the number of taxi plates it gives out.

Mann said there is a limit of one plate per 1,500 residents, and there are currently 108 licensed taxis in the city.

He added the taxi industry is “highly-regulated” and faces increasing competition from Uber and Lyft.

In consultations with taxi cab drivers and company owners, they demanded ridesharing companies be regulated the same way they are.

According to Mann, officials from Uber and Lyft are open to some type of regulation.

Martin Gray, manager of public policy for Uber Canada, said all those in the vehicle-for-hire industry need to work to offer the best business model for customers.

However, he said the “important role” of government is to make sure there are standards within the ridesharing industry.

“People are voting with their feet and the industry is growing,” Gray said.

He believes cheaper fares, ease of access, and a growing trend away from vehicle ownership has led to that growth.

Mayor Dan Carter said while he admires Uber’s business model, he has concerns.

While taxi companies are expected to abide city bylaws for the “health and safety” of residents, Carter said Uber has decided to go by “its own rules.”

Carter asked Gray why Uber, which has been in Oshawa since 2016, didn’t abide by those bylaws from the beginning.

Gray said he understood where the mayor was coming from, but some areas have had to “catch up to innovation.”

However, Carter stood by his concerns.

“It’s not up until events like today that we have that willingness [to work together]. I think that’s part of my personal frustration,” he said.

Carter also believes some customers are unhappy because when there is an issue with Uber, they can’t actually call and speak with somebody at the company.

“I think we need to change this relationship,” he said.

Ward 5 city and regional councillor Brian Nicholson pushed for a third option, where the city would remove plate limits and scale back its regulatory oversight.

In his view, the city should merely ensure a service is safe to use, licensed, and consumers are protected.

“Why do we even have to regulate this at all?” he asked.

Nicholson said he thought the first option was about “expanding and modernizing” the taxi-cab bylaw, but he said it was basically “tweaking” the status quo.

He said by treating ridesharing companies in the same manner as taxis, they are basically pushing all parties except taxis out.

“With all due respect to the industry, I’m not in the ‘taxi-protection’ industry,” Nicholson said.

By comparison, Nicholson said if Tim Hortons came to the city, and asked for other coffee shops to be banned, they’d quickly be told no.

At the same time, he argued the city shouldn’t tell taxi companies how many drivers or vehicles they can have.

“Any time you put caps in place, you restrict profitability,” he said.

Ward 4 city councillor Derek Giberson highlighted issues he has with Uber’s business model.

He said it has been highly publicized drivers for ridesharing companies do not “make a living wage” from it.

Giberson said the “landscape” is going to change for the industry, through court cases and unionization campaigns.

He acknowledged it is cheaper to take a ride with Lyft and Uber than a taxi.

“How do they do that? The way they do that is by underpaying their drivers and offloading risk by having very little capital investment. If they raise their prices, it’s going to bring it in line with the current cab industry, and it’s probably going to have to change even more,” Giberson said.

He also pointed out Uber has posted billion dollar losses over the past few quarters.

This includes a $5.2 billion loss announced this summer.

“Are you aware Uber has burned through more cash in its history than any other entity in human history?” Giberson asked Gray.

Gray said Uber is, in essence, a technology company, and it doesn’t shy away from the fact it is investing in technology.

However, Giberson thinks Uber cannot continue with this model, and at some point investors “are going to turn off the tap.”

Lastly, Giberson noted the impact on the taxi industry.

“We let it gut a viable industry that had been functioning, and that has been paying living wages.”

Ward 1 city councillor Rosemary McConkey noted most people who use Uber and Lyft probably don’t even know they are breaking a bylaw, because the city doesn’t properly advertise that ridesharing apps are illegal.

Last year, an Oshawa driver was issued a ticket after a bylaw officer requested a ride on the app.

The driver appealed the ticket but ultimately was ordered to pay the fine.

The city will continue consultation on the matter, and Mann said staff will likely report back in 2020.