The city has found itself stuck in a corner, with no three-point turn capable of getting it out.
Such is the case in the City of Ottawa’s ongoing battle against the app-based ride-share service, Uber.
After years of stringent regulation of Ottawa’s taxi industry the city is dealing with a service that seeks to operate outside of those regulations entirely.
Taxi licenses in Ottawa, including those issued for Ottawa’s accessible cabs, are bought and sold on an open market. These licenses often go for more than $100,000.
This self-regulated transfer system means that for many taxi drivers operating in Ottawa, the license can be seen not just as an income, but a pension.
In a sense, the City of Ottawa is right to stand up to Uber. At face value, it seems profoundly unfair to cab drivers to create a two-tiered taxi system, with strict, expensive regulations only applied to conventional cabs while Uber’s drivers operate only under the company’s less pricey regulations.
However, after years of complacency towards a malfunctioning taxi monopoly, city officials have no one to blame but themselves for the regulatory mess that Uber is bound to create.
Allowing Uber drivers to operate outside of the plate-transfer system means drastically reducing the value of those privately traded plates.
Now, rather than making a decision which considers the best interests of Ottawa residents, the city must consider how Uber would affect the market for the licenses they themselves issue. Increasing competition is one thing, but bursting the artificially inflated bubble the city has helped create is quite another.
In many ways, Ottawa’s plate-transfer system has done more to tie the city’s hands and limit its ability to promote competition than anything else.
This system of self-regulation has served primarily to benefit the conventional cab industry and the city’s strong response to Uber is similarly in the best interests of the cab companies.
Yet, Uber is still digging its heels into Ottawa. The service
has been wildly successful across the United States and the city’s sting operations against Uber drivers has not stopped the service from continuing to operate.
Certain regulations surrounding training, insurance, taxation and vehicle quality are more strictly maintained by city regulations than Uber’s and it is understandable that the city demand Uber drivers abide by them.
However, some of Uber’s safety features are just as strict as the city’s, if not more so. By eliminating cash from the vehicles and allowing drivers to rate clients, Uber maintains that the service is even safer for drivers.
It would seem that the city’s concern is not solely one of public safety or consumer interest, but
of a protectionist approach to Ottawa’s taxi industry.
Considering the position the city has allowed itself to be put in by allowing an open market for taxi plates, this is somewhat understandable.
However, the real issue is not that Uber drivers would undermine the market for the $100,000 taxi plates, but that these plates could ever cost such an absurd amount of money to begin with.
With some tweaks to assure they follow a number of safety and training regulations, Uber’s presence in Ottawa will be extremely positive for residents.
However, it seems unlikely this will happen until the city takes back control of Ottawa’s taxi industry, and begins phasing out the plate-transfer system entirely.