Quebec government could start buying back taxi permits then rent them to Uber

Cjad.com
March 11, 2016

The Quebec government is considering buying back some taxi permits in order to sell or lease them to Uber.

This is the model advocated by Transport Minister Jacques Daoust, but the terms have yet to be determined. A bill would be tabled by the end of March forcing the transport service to follow the new rules.

On Thursday, the last day of hearings of the parliamentary commission on the paid transport of people in Quebec, Daoust said the government could buy permits that are on sale, and then lease them in order to generate revenue. The takeover of the permits would thus be at no cost to the Treasury.

The value of taxi licenses is estimated between $1.3 and $ 1.7 billion currently at the rate of $150,000 to $200,000 per licence, for 8,500 licences in circulation in the controlled market.

“I’ll buy them, but I will have to find the revenue to be able to purchase them,” said the Minister in a press briefing before the final sitting of the parliamentary committee.

“We will not disburse $1.3 or $1.4 billion at the outset, but we can over a period of six to seven years, be fair with the industry. We will give it the flexibility to be able to evolve. And new players, and those who buy licenses, might not be forced to mortgage their future (to buy a license),” he said.

Year after year, about 500 licences change hands, and as taxi permits are put on sale, the state could buy and then lease them to Uber and its drivers, or to other drivers, in order to recover its stake. The permit holder would not have to shell out a large sum to buy them.

“There are ways to achieve the same result (obtaining a permit), with permits you could lease on an annual basis,” said Daoust.

However, no new permits will be issued, and there will be no loosening of the rules of the people transport market. Daoust wants to keep the quota for transport security and quality of service, two non-negotiable demands he has set.

“It is difficult to work as an amateur. We’ll have to keep the industry viable and one where a person can earn a living,” he said.

The Uber service will be tolerated as long as its drivers hold licences and pay their taxes, the minister said. “Uber will have the right to lease licences and to use them. But basically, it’s not true that we will be able to continue to say you don’t need permits, you don’t need to collect GST and QST,” he said.

For its part, the official opposition, who vigorously defended the taxi industry and campaigned for tougher sanctions against Uber, reacted cautiously to the framework outlined by the Transport Minister. MP Martine Ouellet, the PQ spokesperson on transport, raised concerns regarding the control of the market.

“We talk about supply management, she said. Will people be able to work on a weekly basis with existing permits, or there will not necessarily be permits? We will have to look at the details ( ... ) and ensure that it does not penalize drivers. ”

Ouellet again urged the government to use all means at its disposal “to stop the illegal transport” which is ongoing with Uber.