Legalizing Uber may be Mayor John Tory’s biggest test yet

Ahead of the council vote next week that could fully legalize Uber or run them out of town, council is still split on the path forward. The uncertainty could lead to a step back for the unity Tory promised at city hall.

Thestar.com
April 29, 2016
By Jennifer Pagliaro

How, exactly, to regulate Uber and taxis in this city is still far from decided.

The vote is just days away.

“The biggest issue is that my head will explode in trying to untangle all the interrelated issues so that I can figure out what the biggest issues are,” said Councillor Gord Perks by text message.

It was a common sentiment from the second floor of city hall this week where councillors were struggling to come to any kind of agreement on new rules for ground transportation ahead of council, which begins Tuesday.

The debate over Uber has been the most conflicted at council this term. As cities everywhere look to manage so-called disruptive technology, in Canada’s largest city - where Uber now boasts more than 500,000 regular users and some 15,000 active drivers - the stakes are high.

Mayor John Tory, who has repeatedly framed it as a culture shift that can’t be ignored, says the city must offer the public choices that are safe but that also bring the way we get around into the 21st century.

It’s a position that risks putting Tory on the losing side of a major issue for the first time. Crafting a path to even the slimmest consensus that would fully legalize Uber’s services puts the mayor at the centre of an age-old taxi tug-of-war that has never really been settled.

Many, including Tory, believe it will be a close vote, signalling a continued struggle for the mayor who promised to end divisions with campaign slogans like “One Toronto.” It will be Tory’s biggest test since he pushed to replace the crumbling Gardiner East with a hybrid redesign and at first barely amassed the support needed for it to pass.

“I think if people really are committed to achieving a balanced solution there’s no reason for anyone to leave town,” Tory told reporters this week. “I will be working hard throughout the weekend and next week to make sure that what we can have approved by the city council is a balanced set of regulations.”

In September, council requested staff redraft ground transportation rules - which currently just capture taxis and limousines.

Staff produced 103 recommendations that would create a separate category for “private transportation companies” like Uber and those who drive for them, loosen regulations for the traditional taxi industry and generally satisfied almost no one.

Enter the licensing and standards committee, the six-member body which was primarily filled - with Tory’s blessing and direction - with councillors who have documented financial ties to those running the traditional taxi industry, including chair and executive member Councillor Cesar Palacio (who did not respond to requests for comment this week).

Those industry players - who stand to lose the most with Uber on the road - were buoyed by Palacio and the committee’s decision earlier this month to delete the entire section of proposed regulations that would allow Uber’s most popular service, UberX, offering cheaper rides using unlicensed drivers, to operate legitimately.

But the final decision is for all of council to make.

There is a group of councillors who have firmly defended the taxi reforms approved back in 2014 - rules aimed at ending the internal struggle between the power brokers and bottom-rung drivers within the industry. Those phased-in changes would have seen a fully owner-operated system of accessible taxis and increased safety measures.

Many of those reforms would be rolled back if the staff recommendations before council are approved as-is - an attempt by staff to lessen the burden on drivers and appease standard plate owners as Uber officially enters the fray.

Predominantly left-leaning councillors insist consumers should be protected no matter what type of car they are in, arguing safety standards should be elevated and equal for all.

While Uber Canada officials now say they are flexible on some issues, including a requirement for all drivers to have snow tires during winter months, there are more fundamental disagreements.

“There’s probably a whole range of things out there that we couldn’t be comfortable with,” said general manager Ian Black speaking to the Star’s editorial board this week and offering few specifics.

“The debate at city hall has often been framed as just a licensing debate. I mean, we’re of the view it’s much bigger than that, it’s much broader than that. This is really a debate about how innovative a city is Toronto, how does Toronto want to tackle its transportation challenges over the next five, 10, 20 years.”

He criticized some councillors of being stuck in an “old world view of taxi licensing” and not being attuned to “the needs and the wants of their constituents.”

Asked if Uber would ever leave Toronto, Black said: “At the end of the day we are a business, we do need to run a profitable business.” But he said council can’t keep running from the inevitable.

“It’s very hard to hold back the technology and progress ... You can try to hold back the wave, but eventually it will squeak through or crash over.”

Councillor Jim Karygiannis, a member of the licensing committee who has been vocally opposed to Uber, said he would glad for them to skip town. But even he acknowledged this week that outlook is short-sighted.

“In the real world you realize they have to be there, they’re going to be there, so you have to legislate and regulate them,” Karygiannis said.

He plans to back increased safety regulations, insisting Uber drivers need to be held to the same standards as those behind the wheel of taxis.

“Uber to this day has not demonstrated that they want to participate in a level playing field.”

Fellow licensing committee member Glenn De Baeremaeker, who is one of Tory’s symbolic deputy mayor appointments, agreed.

“Do we make the law for Uber or do we make the laws of the public?” he asked.

Councillor Jon Burnside, who appears to be mostly aligned with the mayor’s office on this issue, said layering on more rules and fees would effectively regulate a service that relies on part-time drivers out of existence.

“This is just death by a thousand paper cuts,” he said.

While the mayor is hoping for harmony, without a clear truce ahead of the debate there could be a messy slate of motions introduced on the floor of council.

The industry is looking on warily, with stepped up lobbying at city hall this week from both sides.

“We think it’s going to be a close vote,” said Uber’s Black. “We don’t have confidence that one side or the other is pulling ahead in this.”

Key issues ahead of the vote

With the debate expected to kickoff Tuesday, negotiations and lobbying at city hall have centred on several contentious points. Here’s what’s still at issue:

• Safety measures: With two differing sets of regulations proposed for taxis and Uber, this part of the debate is likely to dominate council next week, with the potential for many motions on the fly aimed at amending the rules for drivers and the companies that hire them.
• Number of licences: Those councillors backing drivers say it’s necessary to cap the number of drivers on the road to ensure all drivers can earn a living. Uber rejects the idea of limiting entry into the market, saying it is “just not ride-sharing.”
• Setting fares: Some councillors are uncomfortable with surge pricing, where Uber currently charges more when its cars are in high demand. The draft regulations suggest taxis also be allowed to set flexible prices when rides are booked through a mobile app. Uber’s Black says “dynamic pricing is very important to us.”