Connect with us

Métis Nation Saskatchewan Business Magazine | Sask Métis News | Métis Nation Entrepreneurs

Métis Nation Saskatchewan Business Magazine | Sask Métis News | Métis Nation Entrepreneurs

Uber warns of higher prices and longer wait times following Toronto’s decision to freeze new licences


Entrepreneurs

Uber warns of higher prices and longer wait times following Toronto’s decision to freeze new licences

Toronto users of Uber, Lyft and other ride-hailing services could be waiting longer and paying more through the holiday season and beyond.

In the biggest shakeup of the taxi-alternative industry since city council legalized and regulated it in 2016, the companies face the prospect of a steadily diminishing supply of drivers who use their own vehicles to transport app-tapping customers.

The number of active drivers had already dropped dramatically, with a modest bounceback during the pandemic pushing the current number of ride-hail drivers to only about half of 2019 levels.

The latest development — a city council-ordered freeze on licences for new drivers — could have big impacts on the companies and their local customers even as loosened pandemic restrictions have people rediscovering the need to mingle and work outside their homes.

“It is deeply concerning that hundreds of thousands of Torontonians may have reduced access to a safe and reliable ride home during the holidays, especially during a time when TTC services are reduced,” Uber said in a statement after Wednesday’s city council meeting.

Councillors voted 21-2 to pause the issuance of licenses for new ride-hail, limousine and taxi drivers until a council-ordered, pandemic-delayed driver training course is up and running. Applications received by the city from the ride-share companies as of Nov. 10 at 4:30 p.m. will be processed, any later will be subject to the freeze.

With a bid process to choose who develops and runs the training program not closing until Dec. 10, ride-hail firms face an extended period when new drivers can’t join their platforms but current drivers can quit. The city currently receives just over 6,000 driver applications a month.

In a letter to councillors, Uber warned that the move would rob cash-strapped prospective drivers of a “critical safety net” and that “pausing licensing would likely lead to higher wait times and higher prices across the City of Toronto.”

In 2019, council ordered city staff to develop the course after 28-year-old Uber passenger Nicholas Cameron died following a 2018 crash on the Gardiner Expressway.

Abdihared Bishar Mussa, on his fourth day as an Uber driver, had pulled onto the highway shoulder to retrieve a dropped cellphone. He slowly drove back into full-speed traffic, causing a collision that broke Cameron’s neck.

The tragedy triggered calls for training to replace a mandatory taxi driver program that council had scrapped in 2016, at the request of ride-hail companies, part of a new framework to legalize the increasingly popular, but then illicit, service.

Coun. Kristyn Wong-Tam said Wednesday that councillors need to send a message to city staff and the industry that training is vital to ensure safety on Toronto streets. Mayor John Tory, who has vocally supported ride-hailing as an important transportation innovation, supported Wong-Tam’s motion for the freeze.

Carleton Grant, head of the city’s licensing department that oversees taxi and ride-share regulations, told the Star that the freeze comes after a serious decline in the number of active drivers for Uber, Lyft and a few smaller ride-hail services.

The roughly 90,000 drivers in 2019 had shrank to about 29,000 by early 2020, he said, rebounding a little to 48,195 during the pandemic.

“There is a lot of movement,” in that industry, Grant said. “People are leaving to do other stuff and people are joining who perhaps had lost their employment and are looking to supplement their income.”

Ridership data that the ride-hail firms must share with the city showed the reduction in the number of private vehicles trolling for riders had an impact, he added.

“There have been longer wait times for passengers,” said Grant, who did not readily have specific data on how much longer the riders had to cool their heels.

Asked what impact he expects the council-ordered freeze to have, Grant said: “I would presume the impact would be more people start going back to work and less vehicles on the road to meet the demand of the consumer.”

The Most Powerful Sale & Affiliate Platform Available!

There's no credit card required! No fees ever.

Create Your Free Account Now!

As for the delay in implementing training, Grant noted the city’s original request-for-proposal didn’t yield any bids that met the city’s criteria. When the pandemic hit, his staff got busy with duties including enforcing provincial pandemic orders.

“That’s a reason, not an excuse. It was paused,” he said of work on driver training.

Uber, which like Lyft says it supports the training requirement, on Thursday told the Star it needs more, not less, drivers logging into the platform.

“There are fewer ride-share drivers licensed today due to the pandemic,” said Uber Canada spokesperson Zaitoon Murji in an email.

“As the economy has reopened, more drivers are needed to help meet demand. We only expect demand to grow as we head into the busy holiday season, especially at a time when we are approaching the winter season and TTC services have also been reduced,” due to the TTC’s suspension of unvaccinated drivers.

Murji said Uber’s online sign-up function also serves other municipalities, so it continues to operate even if names can’t yet be forwarded to Toronto for registration allowing them to start operating here.

Also, she said, “there are a number of steps in the process to sign up for our app that can continue (i.e. background checks) unrelated to the City licensing regime.”

Lyft, which in 2017 announced it was moving into Toronto, after Uber had successfully lobbied the city on the legalizing regulations, said in a statement its drivers “go through rigorous safety screenings prior to being approved to drive on the Lyft platform, and we are supportive of Toronto’s efforts to improve public safety.

“However, it’s important that we do so in a way that doesn’t jeopardize earning opportunities for people at a time when many are still recovering from the economic devastation of COVID-19.”

The pause applies to taxis, too.

Kristine Hubbard, operations manager at Beck Taxi, contested that cab drivers at the company have been undertaking the necessary training requirements for years, but that the new rule was a “step in the right direction” nonetheless.

Cameron’s mother, Cheryl Hawkes, who lobbied the city to reintroduce training, welcomed the freeze but remained skeptical that the driver courses will be thorough enough to make the roads safe for passengers and other drivers.

“I feel that Uber has had a free ride at city hall since the bylaw was changed,” legalizing it, she said, noting the industry’s massive lobbying effort at city hall including opposition to mandatory in-car testing of prospective drivers.

City rules seemed to be “crafted according to Uber’s business model,” Hawkes said.

“It’s got to be a rigorous course,” she said of the new training, adding the pause in fresh ride-hail drivers should be turned into a permanent cap on their numbers.

“It would be healthy for the city in terms of congestion and safety to cap it severely.”

David Rider is the Star’s City Hall bureau chief and a reporter covering city hall and municipal politics. Follow him on Twitter: @dmrider

Jacon Lorinc is a Toronto-based reporter covering business for the Star. Reach him via email: [email protected]

Subscribe to the newsletter news

We hate SPAM and promise to keep your email address safe

Metis Studies

Online Entrepreneurs

Top Stories

To Top