Mississauga taxi drivers request $50,000 from city as Uber, Lyft decimate industry

Thestar.com
March 13, 2019
Ali Raza

Taxi drivers are asking the City of Mississauga for $50,000 per licence in compensation for income loss after ride-sharing companies like Uber and Lyft were given the green light to operate.

Owners of the limited number of Mississauga taxi licence plates issued in this city are demanding the compensation in direct response to the municipality’s Transportation Network Company (TNC) pilot project, which permitted Uber and Lyft to operate on city roadways.

Taxi cabs at the taxi stand outside the transit terminal on the north side of Square One. Taxi drivers are asking the City of Mississauga for $50,000 per licence in compensation for income loss after ride-sharing companies like Uber and Lyft were given the green light to operate.

“The city mandated endless regulations, set pricing, and limited supply of taxicabs, and allowed licences to be transferable for compensation thus creating market value,” taxi licence plate owner Sami Khairallah wrote in a letter to the city’s Public Vehicle Advisory Committee.

“The city’s decisions on how to manage the TNCs has directly resulted in the loss of 70 per cent of the taxi market share,” he added.

Read more: Toronto taxi owners sue city for $1.7 billion over lost plate value

Mississauga launched its pilot project on July 1, 2017 which formally permitted Uber and Lyft to operate in the city. While the pilot project was meant to collect information and data so that it could eventually regulate TNCs, it’s devastated the traditional taxi industry, according to taxi drivers.

As a result, the value of taxi licence plates has severely diminished, licence owners complain.

“The loss is real, and it’s considerable,” taxi licence plate owner Peter Pellier said. “They used to be worth around $200,000, and now they sell for $10,000.”

As part of the city’s regulation on the taxi industry, a limited number of licence plates were owned by longtime taxi drivers and businesses. The limited number gave those plates a considerably high monetary value. Plate owners considered the plates a source of pension and retirement security as they were transferable -- either back to the city or another owner -- for significant compensation.

Pellier, who has owned a Mississauga taxi licence for the last 40 years, says the regulatory model of licensing taxi drivers had two aims: to ensure consumer safety and protection and to ensure the operators would have the opportunity to earn a reasonable living.

He adds that while Uber and Lyft completely bypassed those regulations, taxi licence owners, who followed the rules, are now suffering.

The TNC pilot project was extended on Jan. 1, 2019 to an interim period not exceeding 12 months. Councillor Ron Starr, who sits on the committee, said the extension was granted because city staff discovered that ride-sharing services like Uber and Lyft are being used by many more people than was previously expected.

“The argument as I see it from them is that the municipalities put them into that situation, it was the municipalities that wanted a better industry, to control the type of vehicles, the safety aspect, inspections, fees, and didn’t do any of that for TNCs,” Starr said.

“We’re obligated to take a look at what the other situations are in other parts of North America, to find a reasonable solution,” he added.

The province of Quebec announced last year that it would give out compensation cheques ranging from $1,000 to $46,700 per permit to taxi drivers after it faced a similar situation.

In Toronto, taxi owners and operators launched a $1.7-billion class action lawsuit last summer alleging the city has failed to properly regulate the private transportation industry and caused the value of taxi plates to plummet.

Khairallah’s request was received at a Public Vehicle Advisory Committee meeting on Feb. 11. On Feb. 27, at a general committee meeting, city council approved a staff study on compensation models from Quebec and other jurisdictions to be reported back to the next PVAC meeting on April 9.