Inter-city ride-sharing company targets the GTA

Ride-sharing startup OpenRide is eyeing new territory and ‘not looking to go up against Uber and Lyft.’

Thestar.com
Aug. 21, 2016
By Brennan Doherty

Queen’s University students driving back to Kingston this September from the Toronto area could be among the first to participate in ride-sharing along largely untouched real estate for ride-share startups - 400-series highways and country roads.

“Our focus is entirely on travel between cities - so we’re not looking to go up against Uber and Lyft for the downtown core in Toronto,” said OpenRide co-founder Owen Scott, a Los Angeles resident and Ottawa native.

The Kingston- and L.A.-based startup debuted in California in March, and its website as of Sunday shows dozens of drivers offering rides to strangers for the coming days, mostly around the U.S. West Coast, but also in Texas, Britain and Europe. Some offer a lift for less than $20, while others seek $300 or more to drive a rider across the country. OpenRide isn’t operating in the GTA quite yet but considers it to be one of North America’s most lucrative regions for ride-sharing companies.

“You have Kitchener, Waterloo, Kingston - all those towns out there that are relatively poorly served by both train and bus transit,” Scott said.

Queen’s already has an active car-pooling community, he said, adding “a lot of people in Queen’s are from Toronto, and so there’s a really, really big informal ride-sharing (community) that goes on there to get back to Toronto every weekend.”

OpenRide’s expansion plans come as the Ontario government considers overhauling regulations for long-distance, inter-city transit companies. It’s focused on large-scale highway travel (such as buses), but could impact smaller vehicles.

“The challenge is encouraging new and innovative services that use smaller vehicles (those carrying less than 10 passengers), while balancing the need for reasonable safety rules,” reads a report issued by the Ministry of Transportation in June.

Scott said he’s “excited” about the possibility of new regulation. He said that part of the difficulty now is the “the ambiguity of the regulation not existing” for companies like his.

“(Regulation) is not something we’re worried about. It’s something we’re very keyed into,” Scott said.

Part of OpenRide’s strategy for avoiding regulatory hurdles thus far has been to ensure drivers can’t make a commercial profit, Scott said. OpenRide drivers are allowed to set their own prices, he explained, as long as they don’t exceed a cost-per-mile rate calculated by the U.S. Department of Transportation - “the idea for us is it’s a cost-recovery service. It’s not a for-profit service.”

That may also be a wise strategy in Ontario. Under the Public Vehicles Act, companies who shuttle paying passengers across municipal boundaries for profit must get a special licence from the Ontario Highway Transport Board. However, the Ministry of Transportation says that taxicabs and “car pool vehicles” - as OpenRide drivers’ cars would typically be classified - don’t need this licence.

As long as OpenRide drivers ferry fewer than 10 passengers and only get paid enough to cover expenses, they are “it would be considered a car pool vehicle under the (Public Vehicles Act) and therefore exempt from (the Act’s) requirements,” said Ministry of Transportation spokesperson Kwok Wong.

Regulations aside, Scott said their policy also ensures city governments and unions don’t fume at a loss in business.

“I think it’s much harder for people to get mad about like, ‘I’m driving to Montreal for the weekend. I take you along, we split the cost of gas,’ ” Scott said.

When asked about OpenRide, Uber spokesperson Susie Heath said the ride-sharing giant “certainly welcomes any innovation that provides more transportation options for consumers.”

Metrolinx spokesperson Anne-Marie Aikins said the Ontario-owned transit network is also keen to provide a more diverse array of choices for riders, especially for getting to and from GO Transit stations. One option for them is to encourage car-pooling via Smart Commute, a program which matches GO Transit riders travelling to the same stations.

It’s also to cut down on the number of people who drive alone to GO Stations. If a service like OpenRide operates legally, Aikins said, “we would encourage people to do whatever it is that takes cars off roads.”

Ride-sharing has remained relatively rare in North America, according to Sharing the Road, a recent report commissioned by Metrolinx on the possibilities for vehicle and ride-sharing in the GTA. However, the report, like Scott, notes the success of apps for long-distance ride-sharing in Europe.

Among the report’s many recommendations are that the Ontario government “develop regulatory frameworks” to allow both public transit and private companies to work together. Crucially, for ride-sharing companies like OpenRide, it also encourages the government to explore “small changes to the legal definition of ride-sharing” related to the “level of compensation allowed” by passengers.

Building rapport with university students in the GTA - or festival-goers out West - is not just about securing a future fare-base. Scott said OpenRide is also trying to brew something of a user culture.

“The big thing we want to do is we want it to be about more than a commercial exchange, but also a fun thing to do,” Scott said.

“Like, you’d rather go on OpenRide to get a cool person to chat with you for four hours in your car than drive alone.”