Fare Share

Uber is depriving taxi drivers of their livelihoods. Why are so many of us applauding?

• 1,069 words

Imagine you’re an established white-collar professional working out of a small office. Above your desk is a government-issued piece of paper that says you know how to do your job. Work is steady because (a) everyone needs your services, (b) your industry operates within a state-protected monopoly, and (c) the supply of qualified professionals in your field is limited by the available quantity of business licences (one of which you own, having purchased it many years ago at great expense).

Now imagine that a competitor opens a business across the hall, offering the identical service. He’s got no accreditation whatsoever. But he claims he doesn’t need any, because he’s using a new kind of information technology to get his customers. Instead of these customers phoning him to make an appointment, they use an app. Totally different thing.

You call the government to complain, and they dispense an investigator. But she’s powerless to sanction the unlicensed competitor, because judges are uncertain how to deal with this new phenomenon. And politicians are afraid that if they enforce the rules, constituents will complain. Moreover, it turns out that a lot of customers resented the old monopoly. They want more choices, and they love all the high-tech features that come with the new app. So public officials shrug and wait for the process to play out.

Things get lean for your business. And you begin thinking about closing shop. But you can’t retire—because most of your savings were wrapped up in your business licence, which is now worthless.

The final straw comes when the upstart strolls into your waiting room and shouts, “Hey, who wants to come across the hall and pay a whole lot less for the same service? Plus, I have a cool app!” You watch as half your customers march out the door. “Sorry pal,” the upstart competitor says as he leaves. “That’s capitalism.” As your livelihood leaves the room, you notice that the few people left in your waiting room are those whose business is the least profitable.

How would you feel? Like you’ve been beaten fair and square by a superior competitor armed with a breakthrough technology? Or—more likely—would you feel like the victim of theft? You played by the rules, invested your time and money in developing an established business, and then you watched everything collapse because the government did nothing to enforce the terms of the legal rules governing your industry.

Your business was how you put food on the table for your children. In fact, the prospect of entering this profession was the reason you came to this country. And so you’re angry—enough to join with other licenced professionals in street protests, where some other people do and say bad things.

I am speaking of Uber’s disruption of the legacy taxi monopoly, of course. These days, in many cities, the only safe market for cab drivers comprises the older, frailer customers who don’t have smartphones—or who require the special disability-accessible vehicles offered by taxi drivers. The more profitable trade—commuters going to work at rush hour, or young people careening back and forth across downtown on weekends—is all heading to Uber. On Wednesday, taxi drivers in Toronto responded with a massive protest that clogged parts of downtown and produced a bumper crop of ugly confrontations uploaded to social media.

But there’s a double-standard at play here: If upper-class Canadians thought their livelihoods as, say, lawyers or doctors were being undermined by completely uncredentialed competitors, they’d cry bloody murder. (In both cases, in fact, insiders already have guilds whose only function is to restrict entry to the professions.) Needless to say, it takes a lot more training to become a doctor or lawyer than a taxi driver. But in all cases, there is a massive upfront investment, whether in education or money. Just a few years ago, Toronto cab drivers were paying $340,000 for a licence. In 2015, the figure dropped to about a third that much.

I don’t usually get accused of being a shrieking social-justice warrior, but there is implicit discrimination here. One of the reasons why no one seems to care much about the plight of cab drivers is that most of them are working class people without much connection to the media (unless they block downtown streets). And most of them (at least here in Toronto, by my observation) are visible minorities from South Asia and other parts of the developing world. If a group of visible minority students at an elite university allege systemic discrimination, we put that on the front page. But here we have a whole swathe of hard-working, non-white working people (most taxi drivers I’ve interviewed for my research in this area drive fifty to seventy-hour weeks) who are being thrown out of their livelihood without so much as a meep of protest from the chattering classes.

Actually, it’s worse than that: The chattering classes are applauding. Because most wealthy people think that Uber is bright and shiny. And why wouldn’t they? The app gives customers one more option to get to the airport or theatre. How many of the people who write pro-Uber newspaper columns or who appear on television panels actually knows someone who works in the taxi industry?

There is a real debate to be had about whether Uber—and the “sharing economy,” more generally—is a force for good in society. While taxi drivers are being disenfranchised, it is also true that thousands of other folks are earning much-needed second incomes by moonlighting as fake taxi drivers. I get that.

But there is a larger point of principle here, one that eclipses cost-benefit analysis: Since the nineteenth century, the Canadian taxi industry was governed by an explicitly legislated social contract: The drivers get us from A to B through good weather and bad, through long hours, for crappy wages—and in return, we provide them with an industry monopoly. In Toronto, and other cities whose mayors and councillors have sleptwalk through the rise of Uber, we’ve unilaterally renounced that social contract.

We can either honour that agreement by banning Uber, or we can cash cabbies out of the industry with a lump-sum payment to make them whole. But doing nothing while Uber corners the market isn’t an ethical option.

Jonathan Kay (@jonkay) is the editor-in-chief of The Walrus.

  • Ryan

    Mr. Kay frames the relationship between government and the taxi industry as a social contract. I think of it more as an economic transaction – a clientelistic bargain between the government and cabbies at the expense of consumers. The upside to the bargain is that cab drivers get to provide monopoly pricing to a captive customer base who can’t demand improved service. The downside is that their market is illusory – it only exists based on a government decree. If the government faces political pressure to deregulate the market, that’s a risk inherent in the monopoly business model. Cab drivers didn’t manage this risk properly, so the government faces enough political pressure that they won’t uphold their side of the transaction.

    Mr. Kay would do well to remember that governments are responsible to both interest groups and the general public, and in this case, the general public seems to be winning.

    • Paul Summerville


  • Ryan Kohli
    • Jimmy

      “Knowledge less rant?” and you cite a globe and mail article about “Uber” ending dirty
      dealings in the taxi industry? So I guess Uber is this benevolent company that is ushering in this great technological revolution and doesn’t exploit its workers at all? The taxi industry did have some serious issues and by all means is not perfect. In the 90s and before, allowing individuals to hold multiple plates was surely exploitative and wrong, but did you actually take the time to review any of the taxi industry reviews that were implemented since that time by municipal licensing and standards? In 1998, they implemented a one plate per person rule and mandated that owners get licensed. By 2013, roughly 80 percent of Toronto taxi plates were owned under the one plate per person rule and further growing. These aren’t millionaires sitting on a beach in Florida somewhere, but hardworking individuals that worked tirelessly for the industry. In fact, the most recent review also mandated that all vehicles eventually be 100% wheelchair accessible, ensuring there is on-demand service for people with disabilities. Brush up on your facts.

  • Sandy Crawley

    It is gratifying to see issue of the “sharing” economy questioned from an ethical perspective. Uberx is an example of a business model that depends on the the pseudo-theological rationale that “disruption” of orderly markets is always desirable . The glee with which budding digital oligarchs have cast a spell on the ruling classes is obscene. Rampant consumerism whereby so many of us have learned the price of everything from private modes of transportation to books and music but have lost sight of the value of the social contract is fuelling a race to the bottom, unless of course, you have an idea of how a string of digital code can replace human effort.

    • Paul Summerville

      Moral? You are writing about privately provided transportation service whose drivers do it willing, and whose customers benefit from a service that is more efficient, cleaner, less expensive, more personal and safer. particularly for women. The taxi monopolies were sitting ducks and deserve the crushing impact on their profitability that they are now suffering. The genie is out of the bottle.

      • Sandy Crawley

        The drivers are willing because the deregulation of the labour market has quickened the pace of the the race to the bottom in employment standards that began with Reagan busting the air traffic controllers’ union. Interesting that “trickle-down” economics took hold in that period and despite the fact that there is no evidence that it works, greedy people still repeat its shibboleths regularly. I suppose you also subscribe to that mockery of public policy, do you?

        • Cory Albrecht

          Except in this case there is no race to the bottom – Uber is at best competitive with taxis and often slightly more expensive. Significantly so during surge pricing times. And they provide much better, more enjoyable service than the taxi companies do.

          Uber isn’t racing to the bottom – the taxi companies are already there. The taxi companies are whining instead of upping their game and providing a better customer service experience.

          • Sandy Crawley

            You are proving my point that price has become more significant than anything else. We are no longer citizens, merely consumers. Perhaps you will consider a little research on the actual work experience of Uberx drivers and how badly the software oligarchs are treating them.

          • Zac

            You’re missing the point, no one is forcing them to drive Uber, they are doing it on their own. Not all jobs are meant to be forever or to raise a family on, if this fills a void for transitional or temporary work as well as provides a safer, cleaner and more affordable alternative to taxi’s whats the problem?

            People looking for work go with their best available option, if someone is driving Uber for $10-12/hr then that’s their best choice at the time.

          • Cory Albrecht

            Actually, the fact that people are willing to pay more for the better experience in Uber show the opposite – that there are things more important than price.

    • VotersForTaxis

      I’d be interested to explore the idea that the taxi market was an orderly market. Consumers had been demanding better taxi service for a very long time, and had been rejecting taxis as a modal choice because of high fares and inconsistent service. Taxi licensing did not allow for new entrants or, worse yet, new business models. The incumbents had a stranglehold on city halls, to the detriment of customers and urban mobility. The extent of regulatory capture is why Uber has adopted its “facts on the ground” growth strategy. I sat through a City of Mississauga Public Vehicles Advisory Committee meeting last week, and listened as the current regs were defended because they served the current taxi industry well. Of course they served the current industry well – they were practically written by them.

  • Paul Summerville

    First, Uber drivers can chose or not to chose to work off of Uber’s platform. They know the deal before they start. If they don’t like it they can do something else. Second, the emergence of parallel service that disrupts an existing service is the essence of capitalism. The state can choose to compensate taxi drivers if they want, but why would it? The drivers that invested in medallions were no different that investors buying into a franchise. They did so because they expected the value to rise partly because they were investing in a monopoly that exploited their customers. There are welfare and unemployment benefits that the disrupted drivers can use to ease the transition. Third, as a frequent user of Uber in London my experiences are wholly positive, efficient, inexpensive, safe, and pleasant. The technology is changing how people work and play, and has been incredibly empowering for women. Embrace change.

  • James P

    When your livelihood is based on consistent breaking of the laws, endangerment of your passenger and other users of the streets (including pedestrians, drivers and cyclists)… when your livelihood is founded on people being forced to use your business because there is no alternative… when your livelihood is dependent on outdated relics… when your livelihood is based on blatant lies (“oh sorry, the credit card machine isn’t working, let me drive you another 10 minutes/$3.00 to a bank, no sorry, I can’t turn off the fare box, that would be unethical”), and not understanding what the words ‘maintenance’ or ‘cleaning’ are…

    When all of these factors are the very foundation of your livelihood, your livelihood deserves to go the wayside. The current model of the taxi system here is outdated. It’s useless. Why would I want to wait outside, in the cold, with my hand up, hoping a taxi chooses to stop, when I can sit comfortably inside, call a car with my app, and go outside when it arrives? Why would I pay taxi fares, that are generally higher than that of Uber (even on a x2 surge occasionally)?

    The taxi industry is a relic. At one point, it was needed. Now, it’s outdated. I happily await the day when Uber-type transportation becomes the norm, and the taxis are the alternative when no Uber is available.

    • A Dave I Know

      “when your livelihood is founded on people being forced to use your business because there is no alternative”

      There were several alternatives to taking a taxi before a Randroid venture capitalist found a way to make a virtue of being a pimp.

    • Jimmy

      The taxi industry like any industry is not perfect and can definitely make improvements.
      So pointing out a few negative experiences is representative of the whole industry and its over 10,000 drivers? “Consistent breaking of the laws?” and I guess Uber doesn’t break the law? It’s unlicensed, unregulated, and going into municipality after municipality all guns blazing, telling them it’s my way or the highway.The taxi industry is so outdated that I can only hail drivers and have to wait outside in the cold? Beck Taxi already had an app (you can even arrange for a ride 1 month in advance) in the city prior to Uber’s arrival and other companies have followed such as Crown, Royal, City, Co-Op and so on.

      • James P

        Those few negative experiences are representative of the taxi industry. I can’t speak for outside the city as I have little experience with them, but within Toronto, yes. The vast majority of drivers are completely incompetent. There are definitely good drivers, I won’t argue, but instead of one apple spoiling the bunch, it’s several apples spoiling the bunch.

        “and I guess Uber doesn’t break the law? It’s unlicensed, unregulated, and going into municipality after municipality all guns blazing,”

        You’re absolutely right, Uber as the company is unlicensed and unregulated, and therefore operating illegally. The drivers, however, are far, far safer. While I’m sure there are Uber drivers who speed and run reds and such, taxis are known to do this. They’re upset that police are currently ignoring Uber’s operation? Why are they not upset that police currently ignore taxis when they’re running red lights, not stopping at stop signs, turning when turning is prohibited, u-turning and impeding traffic in both directions? I’ve been in taxis on many occasions over the past twenty years, and have seen and been in them while doing blatantly illegal actions with cops around.

        As for the apps, yep, you’re right again, Beck had an app before Uber arrived. However, the app is complete garbage, and was designed by a blind dropout. Both the Android and iOS apps are useless. It’s worked a few times for me compared to the countless times it hasn’t, where it either can’t find me or my general location, or tells me cabs are unavailable, even at off-peak times. Co-Op, never used their app, but it has a low rating so I imagine it sucks as well.

        And finally, why can’t taxis compete on a cleanliness level? Why are a large amount of taxis dirty? Surely the five minutes it would take to plug in a dustbuster and give your windows a quick clean would do wonders. Oh, right, taxi drivers are one of the laziest groups of people out there.

        The taxi industry needs many, many changes, first and foremost with the attitude of the drivers. Until then, Uber will go nowhere but up.

        • Jimmy

          I am not going to come out and say the taxi industry is perfect. I think it’s important to raise issues of improving customer service and how to make it a more better customer experience for the consumer. I also think it’s okay to share your personal experience of riding in Toronto taxicabs but to take those experience and use them as ammunition to make an overgeneralization that the vast majority of drivers are “incompetent” is problematic. As for safer? UberX drivers aren’t equipped with any commercial insurance which can be extremely dangerous for both the driver and passenger in the event of an accident. Moreover, it’s not fruitful to the discussion to insinuate that cops are somehow ignoring taxi drivers that pass red lights and not stopping at stop signs without presenting any factual evidence. I welcome and encourage open dialogue about ground transportation in the city, but to demean and characterize taxi drivers as
          “one of the laziest groups of people out there,” is not constructive to the debate.

  • john simone

    Make Uber legal by selling
    $100,000 medallions…then watch it wither.

    • OleWhatsHisName

      Or they could sell them to Uber for what the city ACTUALLY sells them for, not the super jacked prices the crooks sell them for: $4733.39

  • 1LelaG

    It is the public officials who shrug and wait for the process to play out, that should be replaced.
    Can they do anything if it is not spelled out in memos and Laws? Can they think at all?

  • Better_Canada

    highly-encourage anyone making Uber a “Social Justice” issue to 1st
    pour a big cup of coffee – and start reading these 1998 TORONTO STAR Investigations
    from the Bottom Up.

    The Uber story isn’t “Norma Rae” where the
    little-guys stand up against the Mill-Owners…it is Scorsese’s
    “Casino” – where the Mob gets edged-out of Vegas by the the big

    • Jimmy

      So let’s read everything from the bottom up, but disregard the reforms that were implemented since 1998 and thereafter? How informative. The industry’s the “mob” and Uber is this great benevolent company that doesn’t exploit its workers?

      • Better_Canada

        Minor Changes around the edges of the Toronto Taxi-Cartel that have been fought tooth & nail
        at every steep by the Plate-Holders…

        BOTH the Uber & TO Taxi model “Exploit their Workers” – if anything Uber is a least a little more transparent about it.

        • Jimmy

          The implementation of an owner-operator model that ensures that every licensed taxicab in the city of Toronto will eventually become 100% accessible is far from marginal.

          • Better_Canada

            “The implementation of an owner-operator model” which is being fought against successfully by the existing plate-holders (*all Widows and Orphans – apparently)…



            …and the Angels-wings granted by “every licensed taxicab in the city of Toronto will eventually become 100% wheelchair accessible” is another un-needed regulation that keeps other Drivers out of the Market.

            Howard Moscoe had the right idea in 1998 – just KNOCK-DOWN the “House of Cards” – and start from a Blank-Page.

          • Jimmy

            They did not “successfully” fight against the owner operator model, which is still intact. If you read that article, it says Judge Stinson kept all of the reforms on the table, with the exception of the mandatory deadline of conversion by 2024. It still means today that existing standard owners upon transferring their plate, the recipient must conform to the owner operator TTL requirements. Feel free to consult the municipal licensing and standards for further details. The 100% wheelchair accessible requirement was to ensure not only consistency among the industry but also to ensure passengers with disabilities received on demand service.

  • Philip Holdsworth

    I think this analogy needs to be modified to fit the reality of the taxi industry. It’s not only that the new guy across the hall has a shiny new app, but you’ve been in business so long, with protection from your government issued limited license that your service standards have suffered, and government regulation to try and fix the problem (must accept the first fair) has failed. Not to mention that you actually don’t own that license that lets you practice, it’s owned by a conglomerate of investors, to whom you are beholden. Sure, some of your colleagues in the profession managed to save to actually own their own license, but really, you support your monopoly, because it’s the only livelihood you know, and in doing so, you’re upholding the people who really own the license.

    Uber is the way of the future, bu Kay is right, there is an important discussion that needs to happen about how we will transition to this new economy without forsaking those in the current economy. Second, the regulation exists for valid reasons: employee protection, stability, to protect users from discrimination. None of that exists in the new “sharing economy” and in light of stories coming out about inherent discrimination through such apps, it is very much needed.

  • gwest

    A monopoly is NOT something to praise of defend, it’s a coercive, government imposed, and highly unethical, and undeniably harmful system.

    Yes the taxi drivers are victims of the monopoly their employees are the benefactors of.
    They are in the position of begging for more of the same problem from their abusers, while openly abusing and attacking the actual solution.

    No, much better to beg the cause for more of the problem.

    • Jimmy

      So let’s strive to end all monopolies because they’re so “harmful.” Why limit hot dog stand permits in the city? Why does the law society of upper Canada get to control how many lawyers become licensed every year? Why don’t we just let developers start building new homes and not worry about them getting any permits or inspections? Let’s open the floodgates. Who cares if people can’t earn a fair wage anymore. Oh wait, but let’s let Uber get away with breaking the laws with impunity thereby giving them an unfair advantage so they can kill the taxi industry and in the process monopolize ground transportation, set their own rates, and further exploit workers. In some municipalities Uber is now collecting more than 20% off each fare.

      • gwest

        Yes, please do get ride of ALL coercive monopolies and oligopolies. They are, and always have been, harmful. They are also maintained by violence and threats therefof.

        That doesn’t not mean no oversight, and it does not mean no standards.

        Your fantasy about Uber taking over and becoming a monopoly is not only delusional, it’s contradictory and wilfully ignorant of fundamental economics.

        Uber has as much possibility of monopolizing the peer to peer transportation market as Apple has of monopolizing cellphones.
        That is, without third party coercive intervention by the biggest most violent monopoly of them all, it is all but impossible for either to gain a monopoly.

        • Jimmy

          So first a monopoly is NOT something to defend, but now oh wait only “coercive” monopolies. How are you deciphering what is and is not “coercive?” There are reasons why monopolies and oversight exist in certain industries, not only to ensure workers can get a fair wage but to ensure the protection of consumers as well. Delusional? Uber is already active in 58 countries and 300 municipalities worldwide, steadfast in its pursuit of no cap on drivers, investing in R & D on driverless cars, disregarding the law to acquire an unfair advantage and head start which has enabled them to grow its valuation to over 60 billion dollars in its most recent financing round; all of which is only going to make it that much easier for them to wipe out the competition.

      • Kevyn Nightingale

        Um, yes. Exactly – at least for your first 3 statements. Gwest has it right. Building permits and inspections do not create monopolies, so they’re quite different.

        I’m a CPA, so I’m in the category Jon describes in the article. Except I practice tax, which means that anyone who hangs out a shingle can compete against me. And that’s just the way it should be.

        • Jimmy

          I mentioned permit and building inspections not because they create monopolies, but to illustrate Uber’s disregard for the law. Whether you’re a CPA, lawyer, or driver, you have to follow a process to get licensed and certified and abide by the requisite rules and regulations. Uber thinks they can jump the gun by not following and abiding by that process.

      • Jess Geez

        But some of these are the things that NEED to be regulated fairly. It’s not an all-or-nothing situation. And instead of regulating cab fares, regulate how much the companies are allowed to take from their drivers/raise each year/etc.

        Using false equivalents isn’t a valid argument.

        • Jimmy

          It’s not a question of whether those equivalents are true or false, the use of those examples by me were relevant in dispelling the notion that we need to somehow abolish monopolies. I am a proponent of fair regulation. I think regulating fares is important to ensure there is fairness and no price gouging (surge pricing). The need to have some regulation with respect to company and shift rates is also important, which is something that councilor Janet Davis has asked the city to look into as well.

          • Zac

            I agree with you that we need to abolish coercive monopolies, but I’m curious why you, at the same time are OK with regulating fares. If I agree to pay surge pricing and I voluntarily pay it, who are you to come in and say it’s high or low. Just curious.

          • Jimmy

            I did not say anything about abolishing monopolies. There’s good reason for why fares are regulated; to not only ensure the public is protected but so the driver can actually make a living. If you voluntarily wish to pay more, you’re welcomed to tip the driver.

          • Zac

            Sorry, misread that about monopolies – still not sure how you can rationalize a government enforced monopoly like taxi plates, but whatever.

            Also if a driver agrees to a fare lower than the regulated price who cares? It’s his time, his service be can decide, not some bureaucrat.

            The market regulates prices (aka fares) one hundred percent better than any government entity. Just look at normal consumer goods like winter boots, USB cables, TV’s, desks, etc. No regulation and someone has each of those items. Unregulated doesn’t mean the normal laws to protect you from fraud don’t apply, it’s just an excuse for rent seeking politicians.

            If a driver can’t make a living from the wages he’s able to negotiate, that means he either isn’t providing sufficient value to the consumer or there is not enough demand for his services.

          • Jimmy

            I’m still not sure how you can rationalize surge pricing, without seeing some of the inherent dangers accompanying it. Normal market goods that you mentioned such as winter boots, USBs, cables, TVs and so on don’t
            periodically increase in price by 500% over a single evening. There’s good reason for why there should be some regulation of fares; to ensure the public doesn’t get gauged and so that the drivers can make a decent wage. There’s a slippery slope in allowing Uber to get unfettered access to the market considering their vehement opposition to any sort of cap on the number of drivers has the danger to create a race to the bottom for the thousands of workers that will be severely underpaid and exploited at the hands of Uber. Not to mention, there are also environmental implications to consider as well. It might be easy for you and others to have the means to voluntarily pay more for service, but the same might not be said for everyone, particularly passengers with disabilities requiring on-demand wheelchair accessible vehicles.

          • Zac

            Prices wouldn’t surge to 500% if there wasn’t customers ready to buy at that price, Uber’s algo obviously knows this. Just because you think $200 for a ride home after a hockey game is a lot doesn’t mean others don’t and if someone wants to pay 500% more than normal, that’s their choice and shouldn’t be obstructed by bureaucrats who think they can micromanage an economy. A truly unregulated market would allow Uber to charge surge pricing and other actors to give rides and charge what they want. Don’t think anyone is arguing for an Uber monopoly, just fair competition. You can drive Uber, or you can start your own service. Or buy taxi plates. I want unfettered access to the market for everyone so the consumer and the drivers get to make their own decisions.

            USB cables actually do have surge pricing. You can buy them off ebay or Alibaba for $0.50, but they are $15+ in airports all over the world. Same thing with water and other snacks. $0.10 in the store, $5+ in the airport. Pricing changes with demand, that is normal and if you accept it with water available after being on a dry plane for hours, you should accept it for students trying to get a cheap ride to a house party or the bar.

            Finally, no one is forcing anyone to drive Uber, they sign up on their own and choose their shifts on their own. Doesn’t sound like exploitation to me. They wouldn’t sign up to drive if they had a better option on the table, and if it’s to make some temporary cash who are you to say what’s best for them? If Uber is so exploitive and bad, people just won’t sign up.

          • Jimmy

            The drivers shouldn’t be treated as commodities that can be simply be traded on the open market, they actually have families they’re supporting and trying to make a living. You’re missing the point. It’s not a matter of someone who’s willing to pay more for a service should be able to which many people certainly have the means to, it’s the unintended consequences of certain customers being neglected along the way, particularly customers requiring an on demand wheelchair accessible vehicle, considering the start-up costs of an accessible vehicle can cost 60,000. Not to mention there’s presently not any fair competition. Uber
            has been entering municipality after municipality with all guns blazing, disregarding the law and saying it’s my way or the highway. Toronto
            taxi drivers currently have to take and pay for a 17 day taxicab training
            course, the Toronto Taxicab License mandates wheelchair accessible vehicles which can cost the driver upwards of 60,000, drivers are also required to complete CPR/FIRST AID certification, possess 2 million liability commercial insurance which can cost the driver 7-10 thousand per year, pay for a security camera, meter, roof light, driver refresher courses, vehicle inspections (including mandatory winter tires), licensing fees and so on. With these significant costs that taxi drivers have to incur, they simply can’t compete with UberX drivers. The presupposition that all workers have agency in the labour market and can just get up and leave at first sign of exploitation is simply not true; many of the workers are already disadvantaged and living on pay cheque to pay cheque. If you think Uber is not engaging in any exploitation that’s beyond me. Under the guise of technology, they are creating a huge pool of underpaid drivers who are labelled as “individual contractors” so they don’t have to pay for any benefits, their insistence of no cap is pushing down wages (they even went so far as to engage in a pilot project in San Francisco testing 30% commissions), flouting government regulations (in Toronto has resulted in an UberX driver involved in an accident not covered by Uber), discouraging labour organizing, deactivating some workers accounts for suspect reasons at the blink of an eye without any due process, and all the while ensuring their investors can reap huge profits at their expense. The sharing economy is shifting the risk from companies to the drivers, and its estimated in the U.S. alone that over 40% of workers will be in some form of precarious work by 2020.

          • Zac

            Labour is a commodity, people do have the right to change their employment if they feel like they have a better option – not government regulators who think they have a better handle on what’s best for an individual. They aren’t traded on the open market like trading cards, they trade THEMSELVES to whatever option is best to them. Ever had a summer job then got a different one for a semester of university? Or quit one job for a better paying one? What’s wrong with that? You think government regulators have a better idea of what’s right for every single driver given their individual needs and wants? Seems patronizing.

            Municipal taxi legislation ARE a coercive monopoly – the taxi drivers are FORCED to pay six figures for a permit (aka piece of paper) and take all those courses, they don’t do it because they want to, and I truly feel bad for them because it’s not right. It’s insulated them from competition and consumers from better services (especially those consumers who don’t have the means to pay more).

            If I decide to get in a car without liability insurance or CPR training do I not have that freedom? Can I give my friend $10 for being designated driver and can he not agree/disagree to that? That’s basically what Uber is, and yes it is circumventing regulations, but the consumers have spoken on which service they prefer. Even though the taxi industry in many cities mandate all this training, they prefer Uber. Are there issues with Uber? Certainly, but not allowing for free competition in the market is NOT going to resolve that any faster, and not going to create a win/win solution for the business owners and consumers.

            You claim you want to help people without the means to pay for services, but you immediately call to ban any innovative service which actually provides better, more affordable service in a NON-COERCIVE manner.

          • Jimmy

            So taxi drivers have to follow the rules and regulations and it’s okay for Uber to disregard them and unfairly take some of their business in the process? Double standard. You’re free to do anything you want, whether you want to get into an uninsured vehicle or not. However, the belief that government should just step aside and allow people unfettered access to the market without abiding by some regulations is absurd. Why don’t you actually take a moment to think about why there are safeguards such as licensing drivers, vehicle inspections, and ensuring drivers have the requisite commercial insurance in the first place? It’s to protect the PUBLIC! So we don’t have cases like the Toronto UberX driver involved in an accident and not covered by Uber or the 6 year old girl in San Francisco killed by an Uber driver and Uber rushing to deny culpability while the family racked up half a million in medical expenses, and eventually had to settle out of court with Uber close to a year after the fact. You’re simply looking at the debate from one perspective and not critical of Uber’s shady and exploitative business practices. I immediately called for a ban? When did I ever call for a ban? I think Uber is here to stay and I’m not advocating for a ban, but I think they should show some goodwill and respect councils motion calling for the suspension of their UberX services until they are captured under the regulatory framework.

          • Zac

            Consumers always lead, legislators are always playing catch up look at anything innovative and disruptive (i..e. internet based businesses, bitcoin, file sharing, etc).

            You can’t claim double standard while municipalities rake in MILLIONS from implementing a price ceiling they profit from exclusively while locking out competition (which hurts both business owners and consumers alike). I can’t drive a cab without putting up 300K+? I drove my friend to the airport, I’m a cab and I didn’t pay 300K for a piece of paper. That happens every day. That immense upfront cost gets passed onto the consumer, the same consumer you claim you want to help. Your ‘regulation’ is cronyism in disguise, supply and demand makes sure there are enough cabs on the road not politicians who adjust their numbers once a year. Bad cabbies are weeded out and good ones are rewarded – not whoever has the most cash to buy a plate. I’m sure you would agree the focus should be on providing the best service and value to the consumer, not who has the most cash on hand.

            I’m not against vehicle inspections and insurance, I have both of those. What I’m against is pompous politicians FORCING someone to abide by regulations and criminalizing someone who gets into an unregulated cab voluntarily. People should be free to make their own decisions and take their own risks without someone babying them. Even if insurance and inspections were voluntarily, many people would still get them and just advertise them as a competitive advantage.

            Stealing, defrauding, murder – these are all still illegal, and they are dealt with according to local laws Uber isn’t getting away with any of that. They are being aggressive capitalists who are prioritizing the customer and their shareholders as they should.

          • Jimmy

            I still don’t know how you can condone taxi drivers having to abide by rules and regulations and somehow those very same rules don’t apply to Uber. By not abiding by the law, they are gaining an unfair advantage. So you’re not against vehicle inspections and insurance, but not condemning Uber for failing to have adequate insurance? You can’t drive a cab without putting up over 300,000? You obviously don’t know anything about the industry. It doesn’t cost you 300k to start driving. I haven’t heard of any customer facing criminal sanctions for taking an uninsured vehicle and Uber is the culprit here. I think the taxi industry isn’t perfect and has some issues with it as well. There should definitely be a greater focus on improving the customer experience, but it’s disheartening to see Uber respond to council’s motion of ceasing operations until they’re captured under the regulatory framework with the “one-finger salute” as per Mayor Tory. All regulations aren’t bad, they actually serve a purpose as I already illustrated. The onus is partly on the government to ensure the travelling public is safe and the issue here is that Uber can’t just jump the gun and continue to disregard the law.

          • Zac

            Uber is in a grey area, they are a technology application that is facilitating a ride share service. They aren’t covered by legislation right now, similar to how file sharing is technically the same as stealing an album from the store. Were you in favour of arresting a 14 year old girl being arrested for downloading a Britney Spears album? It’s technically the same as snatching it from the store. This is more for Uber’s lawyers to hash out though.

            I’m not against vehicle inspections I just don’t think the government should FORCE me under threat of fines and jail time if I don’t get a vehicle inspection. If I can’t get a taxi plate without a vehicle inspection, but drive anyways that’s illegal and you WILL get in trouble. Safety regulations are a slippery slope and a guise for cronyism, individuals are responsible for their own safety, not micromanaging bureaucrats.

            I can buy 200 chocolate bars and eat them all in one sitting which would probably give me diabetes – are you sure you don’t want to regulate chocolate bar purchases? People might get diabetes, better limit chocolate bars!

            I can buy a 60 of whiskey and walk across the street and buy a bottle of Aspirin and kill myself – surely you’d be in favour of limiting consumer purchases, cause safety right?

            Lack of regulations doesn’t mean theft, fraud and murder aren’t illegal. If I get into an uninsured taxi that’s my risk to take. If I’m harmed I still have legal recourse, it’s not the wild west like some claim.

            The point, as Cory made below is that even with your MANDATED safety regulations, there are WAY more issues with taxi’s. It’s not about safety, it’s about keeping competitors out to maintain the monopoly.

            Ya, it is OVER 300K dude. That is until Uber drove the prices down, wonder why there is so much resistance, hmmmm

            In the space of two years, Toronto’s taxi licences plunged in price from a high of $360,000 in mid-2012 to below $100,000 in mid-2014.

            You’re not going to get improvements in ANY industry without competition. And regulating price and supply synthetically is going to crush competition. You can claim it’s illegal all you want, but the real injustice is to the consumers and the taxi owners who are forced under threat of fines and jail time to adhere to these regulations which do nothing for anyone.

          • Cory Albrecht

            I’m fine with appropriate and necessary safeguards and that they get applied to Uber, too, like requiring insurance. But for every Uber accident there’s a dozen more taxi accidents where even with insurance the taxi companies try their best to avoid paying. So it’s not like that’s a good argument on your behalf.

            Also, if you think most taxi regulations are about passenger safety, then you are wrong. Passenger safety & consumer protection bylaws would be about insurance, vehicles meeting ministry of transportation safety standards, clear and plain fare pricing, and keeping accurate records.

            But many taxi bylaws are about preventing new competitors from entering the market and maintaining the taxi monopolies. Things like requiring new taxi driver licence applicants to be sponsored by existing taxi broker licence holders, but at the same time require new taxi broker licence applicants to have letters from some number of taxi driver licence holders saying they will use the applicant as their only dispatcher. Or by requiring a local dispatch office (not just a phone number) which is an unnecessary added expense for an existing neighbouring taxi company from expanding into the locality and also would prevent an otherwise compliant company (even a local one) from using a website for people to order a cab instead of calling dispatch. Or by artificially creating scarcity by limiting the number of available licences instead of letting the market determine the winner.

            I bet that if you read you local municipality’s bylaws on taxi service that you will find ones similar to what I described above, and the fact that taxi companies lobbied for those controlling, limiting bylaws and now, instead of upping their game and providing quality service like Uber does, they are whining and complaining and hiding behind those bylaws for their shitty service.

  • Sam

    OK, so you’re going to COMPLETELY ignore the fact that the taxi companies have a reputation for atrocious customer service? I would never have even tried Uber if not for how awful the customer service is with the taxi firms.

    Taxi companies could have innovated and provided many of Uber’s benefits but they were happy with the status quo and didn’t put the effort into improving their service. If they had actually made any efforts to compete with Uber on the MERITS to get customers to choose their service over Uber’s then I might have a bit more sympathy.

    As it is these people made a business decision that didn’t pan out and I don’t see why I should feel any worse for them than I do for a person that tries to start a restaurant, treats their customers badly and then is surprised when the customers vote with their feet and go elsewhere. Should I cry for the telegraph deliverers? Oh how terrible that these technological upstarts have taken jobs from hard working people!

    I work in television and the “a la carte” cable could be very negative for me and people in my industry – should I protest Netflix and other streaming services? Should I cry to the CRTC that people should be forced to buy channels that they don’t want?

  • Derek

    Was it a matter of discrimination when people largely turned a blind eye to technology disrupting the music industry, film industry, publishing, newspapers, hotels, real estate, brick and mortar storefronts, photo printing services, dry cleaners, classified ad sales… what is the difference between all the other industries that have had people downsized and businesses shuttered and this one that has you crying discrimination? If you support technology disrupting unprotected non-monopolies than don’t pick and choose when to wave the flag of social injustice, especially not for an industry that has enjoyed more protections than most peoples.

  • Mark Dowling

    We didn’t give taxi drivers a monopoly. We gave *licence holders* a monopoly. They rake in plate rental cash whether business is good or bad from the drivers who live on the remainder

  • Michael Irvine

    Capitalism is depriving Uber drivers of their livelihoods which is why they’ve become Uber drivers.


  • Clifford Paul Tindall

    What a bunch of bull. Cab company owners are ripping off cab drivers. Depriving them of their livelihoods my ass. I guess the other business in my industry that’s doing better than me should be chastised for it? LOL. These cabbies are paying stupid fees and are getting paid poorly.This is becoming a joke.

  • Cory Albrecht

    “[L]egacy taxi monopoly”.

    That’s the problem right there. In most jurisdictions the bylaws (which were lobbied for by the taxi companies, remember) are there for the purpose of making it extremely difficult for a new competitor to enter the market and shake things up. Don’t believe the taxi companies when they say the bylaws are their to protect the passengers.

    I do not rive because of a history of epilepsy and a number of years ago I worked late shifts ending after midnight at a call center, later than the buses ran, so i took cabs. I knew from experience the best & quickest route home, which cost $15, but on more than occasion the taxi driver would try to convince me the longer route (which actually had more store lights) was better even though it cost $20. Multiple times, against my explicit direction, the drivers actually did take the long route, and when we would get to my place i would get out of the car and hand then the $15 for the shorter ride, not the $20 on the meter. When they would yell at me, I would tell them they disobeyed my instructions and I will not be scammed. They would swear at me, threaten to call the cops (which I dared them to do but the never did), threaten that I’d never get another cab ever again, and so on.

    One time, in a cab that had a CB system to hail the drivers with (which went off twice during our ride home), my wallet fell out of my jacket pocket. I discovered this while hanging up my jacket but the cab had already left so I called the cab company right away, but they refused to use the CB system saying there was no way for them contact the cabbies to find out who had just made a drop off in my neighbourhood. They said call back after 9am the next morning and the cabbies would have reported in by them, so I did but they said no, the cabbies don’t report in until 6pm, so I called then and the still refused to provide any form of assistance at all and in spite of the taxi records keeping bylaws in my municipality they claimed that they could never know who I got the ride from because we flagged the cab at the movie theatre instead of calling.

    That’s on top of the usual crappy service of cabbies talking on their cell phones, weaving in and out of lanes and the common place bad driving one expects from cabbies.

    Shitty service is pandemic in the taxi industry, which is why there are so many stories like mine, but instead of stepping up their game and providing better service so those shitty stories are the exception rather than the rule, the taxi drivers and companies whine and complain about their oligopoly falling to pieces.

    Damn straight I hope they lose to Uber, Lyft and others.

  • OleWhatsHisName

    “Just a few years ago, Toronto cab drivers were paying $340,000 for a licence.” yeah, but how much are they actually WORTH? You state that like the city sells them for that much. NO. If people were paying that much considering how much they’re actually worth – that’s their own fault. Oh and the answer? $4,733.39 for a taxicab license, so there. Thanks.

  • David

    JK – you are a really good writer but cmon this is lazy and intellectually dishonest journalism. You cannot compare a taxi driver which only requires a drivers license to a doctor which requires years of study and expertise?? By all means feel free to go to an unlicesed doctor for your treatment, no one is stopping you from doing that. Also feel free to have my 7 year old cousin who has an affinity for law draft your will. I get that you want to play devils advocate but it just doesn’t work with uber.

  • VotersForTaxis

    If your point is that we should feel for the little guys that got caught up in something that is much bigger than them, then I would agree. But that is not what happened on the street of Toronto last week, and your analogy to professional licensing is weak at best. Regulators have defended economic regulation as a way to achieve safety and consumer protection goals, even though it failed miserably by any objective standard. If you wanted to protect the little guys, you wouldn’t create a system of limited supply of licenses and open supply of drivers. That only makes them more vulnerable, as the longstanding system of taxi licensing has proven. And unhappy consumers have been abandoning taxis in droves for years, as any modal split study will tell you. So that might explain why consumers, long abandoned by city halls across Canada, are cheering now.

  • golden_bear

    There seems to be this trend where ignoring regulations, rules, and the social contract are seen as “disruption” and “innovation”. Many of them seem like cynical, “too clever by half” attempts to get around existing regulations and the social contract using the excuse of “apps”. Uber isn’t a taxi service. Airbnb isn’t a hotel service. DFS totally isn’t gambling. Everyone is an independent contractor now.

  • Vikram Chopra

    If you wish to target someone, then target the license/plate mafia that had such a monopoly they could charge upwards of 250 000 for a plate. Target the city for having antiquate bylaws that favored a taxi monopoly.

    Finally there is a difference in quality. Half the Canadian population or more can drive. So if they so desired half can go ahead a become cab drivers. That is not the case with any of being able to become a doctor/lawyer overnight. That did happen to a whole bunch of MBAS who now struggle to find basic jobs due to demand and supply, an definately not worth their investment.

    The fact that cab drivers had to pay 300k is criminal and the city and those who own the plates should be criminally liable, because someone got a huge kickback to monopolize the taxi industry for 40 plus years. Don’t make Uber the scapegoat for bad and unethical business practices.

  • Jess Geez

    I agree that a lot of folks don’t give a shit about cabbies because of race, class, and a social disconnect. I don’t use cabs or uber, but I know how hard cabbies work.

    The issue here is the licensing fees, the way the cab companies operate basically as powerful cartels, and the always-increasing taxi fares. The public didn’t consent to a monopoly, so we can’t be expected to not take a cheaper, better, easier option when a lot of us can’t afford cabs (I can’t – it’s $5 just to get in).

    The cab companies, and municipal licensing treat drivers like ATMs. And this needs to change. But I don’t think that banning ridesharing apps or programs is the way to do it. The problem is TOO MUCH regulation vis-a-vis ridiculous licensing fees, not less.

    I don’t understand why no one is following the money, and looking at the TOP money makers here (the companies, politicians), rather than just pitting drivers against drivers.

  • Anton Hart

    Longevity of the competitors will be determined by their excellence or lack of it. Publishers faced open access some time ago and revenues took a hit. The good ones have found ways and means to remain solvent. Excellence in publishing is still everywhere. Cabs will survive: I like a well marked, clean taxi.

  • bigshynepo

    ” But you can’t retire—because most of your savings were wrapped up in your business licence, which is now worthless.”

    This is where the article falls apart. The taxi business is the only one where ‘licenses’ are auctioned off in small numbers to control demand/supply. Since some people can afford to buy many of those licenses, they rent them out for $X per shift. If the city prohibited this kind of rackateering, no one would ever invest hundreds of thousands into taxi medallions because THEY ARE NEVER SOLD FOR THAT MUCH IN THE FIRST PLACE. If everyone was paying the city’s charge for the medallion, we wouldn’t even be having this conversation. Go after the multiple-plate owners and the taxi cartels, not Uber. The cartel owners are the ones who have created this impossible situation for cab drivers.