Toronto taxi companies reject surge pricing, call it ‘extortion’

After council voted to change the rules for taxis and companies like Uber, brokerages say they reject new pricing models they’ve been given

Thestar.com
May 11, 2016
By Jennifer Pagliaro

The city’s largest taxi brokerages say they will refuse to increase prices during peak periods despite new rules that allow them to do so.

Companies including Beck, City, Co-op, Crown, Diamond and Maple Leaf say they are rejecting what’s known as surge pricing after council voted last week on new regulations that loosened rules for taxis - a move meant to allow them to compete with companies like Uber.

“We do not consider this to be capitalism, we call it extortion,” said Rita Smith, executive director of the Toronto Taxi Alliance, which represents the brokerages and other industry members. “We will not be incorporating it into our business model. We believe that surge pricing has no place in superior customer service.”

UberX, one of the U.S.-based ride-hailing company’s services which is now in the process of being legalized, offers discounted rides in private cars. During busy times, those fares could multiply depending on the number of available cars. Under the new rules, UberX can still surge price, but the base fare will be on par with taxis at $3.25.

The new rules would allow taxis to surge price only through their own smartphone apps. Rides hailed on the street or by phone are still required to have set city fares.

But Smith said that change was not based on good business practices.

“We didn’t ask for it, we didn’t want it, it’s not a good business decision. Perhaps it was a political thought - ‘Yeah, let’s let everybody charge what they want and business will go on as usual,’ but that’s not how it works actually out in the real world,” she said, arguing people will be caught unawares by surge prices and that drivers and “drunks” could get into fist fights.

The city’s new rules dictate that all companies must clearly state the fares and surge pricing before users agree to any ride.