Uber in legal limbo until new rules implemented July 15

After council voted for new regulations governing taxis and ride-hailing services like Uber, implementation won't happen immediately.

Thestar.com
May 9, 2016
By Jennifer Pagliaro and David Rider

With new regulations governing Uber approved by council but not set to be implemented until later this summer, the ride-hailing service remains in legal limbo.

The city’s licensing division, which will now govern both taxis and “private transportation companies” (PTCs) like Uber, say the rules passed by council last week will take effect July 15.

In a note to drivers, posted on Uber’s website following a council vote last week to approve the new framework, the company said they will continue operating as before “to provide riders with reliable and affordable transportation.”

That includes the controversial UberX service, which connects users with private drivers at discounted fares through the smartphone app.

But the city’s head of licensing, Tracey Cook, said via a spokesperson that charges against UberX drivers laid in recent months while the service was operating illegally will not be dropped.

“All charges related to the operation of Uber and its’ drivers will continue through the appropriate court processes,” the statement said. “They are not being withdrawn due to council’s decision.”

To date, no drivers have faced any penalties.

Mayor John Tory says he plans to speak with Cook about how best to move forward.

“I think it’s necessary for us to have some sort of a plan during the period when we’re getting ready to enforce it,” Tory said about the overhauled regulations. “I think people will understand that it takes some time when you’re bringing about fundamental changes to rules for both taxis and Uber to implement those.”

He said some rules should be implemented ahead of July, if possible.

Approved changes include a requirement for all UberX drivers to be screened by the city - with proof of insurance covering $2 million in liabilities and other documents - before they are approved for a new class of licence.

Currently drivers can apply directly to Uber online, uploading their documents and consenting to a third-party criminal background check.

While city staff recommended that process continue, with the city able to audit driver records, council agreed with Tory’s proposal to have the city create a specific licence for PTC drivers and make city staff responsible for vetting applications.

In its note to drivers, Uber said everything continues as normal until the new regulations are implemented.

The company assured drivers they won’t be on the hook for an increase in licensing fees. A 30 cents-per-ride charge imposed by council will be added to the fare price and paid by users, Uber says.

The city also added an annual $15 per-driver fee and a one-time $20,000 application fee for any PTC company. The note from Uber doesn’t outline how those costs will be handled.

Uber has also not yet said how it will deal with drivers whose cars are older than seven years old - which will be forbidden under the new rules. Currently UberX drivers can use vehicles up to 10 years old.

“We will send more information this summer to anybody with a vehicle older than 7 years old,” the note said.

When the rules come into force, all vehicles - taxi or PTC - will also require inspection at a city-run facility, a change from Uber’s own inspection process it has claimed was more than enough.

“We’ll work hard to make this process efficient and affordable!” the note to Uber drivers said.

When asked whether the requirement for all cars to go through a city-run facility would cause a lag in processing, the city did not directly address the question, saying staff are working on an alternative, as directed by council. Uber currently boasts a total 15,000 drivers in Toronto, not all of which are UberX drivers.

Rita Smith, executive director of the Toronto Taxi Alliance, says they’re “very encouraged” there will be “clarifying” bylaws in place later this summer.

While they support some of the new rules, including having all drivers provide proof of insurance to the city, they aren’t thrilled about all the changes.

“There are other elements which we find challenging, but we will find a way to work with the new bylaws,” she said.

One of those changes appears to be the ability for taxis to use surge pricing through their own smartphone apps to compete with UberX pricing that increases during peak periods.

Officials from one of the large taxi brokerages, Beck Taxi, have already said publicly they will not allow surge pricing.

Asked if her members are going to follow Beck’s lead and not use the ability to surge price, Smith would only say: “We have spoken about it.”

The taxi alliance plans to make a “major announcement” at 10 a.m. Wednesday.

“I think most Torontonians will be happy about it,” Smith said.