City to release series of reports on taxi industry, sharing economy

ottawacitizen.com
Oct. 14, 2015
By Joanne Laucius

The city is set Thursday to release the first two of six discussion papers on the taxi industry and how the sharing economy is affecting the industry.

The first report will focus on the current conditions in Ottawa’s taxi industry, while the second looks at case studies of three Canadian and three U.S. cities, said Coun. Diane Deans, chair of the Community and Protective Services committee, which regulates local taxis.

The city hired KPMG to lay out policy options in the discussion papers to “stimulate dialogue,” said Deans. In the coming weeks, KPMG will release reports on emerging issues, customer experience and taxi economics.

The reports come mere weeks in advance of a full taxi review, which KPMG will likely forward to the city in December. Originally, the review had been scheduled for release by the end of next March. However, protests by Airport Taxi drivers and videotaped attacks on Uber drivers and users had Major Jim Watson asking that the review be expedited.

“There are so many challenges with the taxi industry - how it was designed and cobbled together over the years - it really is not the most functional system to have,” Watson said in August.

Some city officials have signalled a willingness to change the rules, but any changes that allow a service like Uber - without the same regulatory requirements of Uber drivers - are sure to cause controversy.

“Any two-tier system we will not tolerate,” Amrik Singh, president of the Ottawa taxi drivers’ union, said Wednesday. “There should not be any special favours for anyone. We are taxpayers. We are 3,000 families. Anything to accommodate anyone who is not paying taxes will not be tolerated.”

And yet, the sharing economy appears very much here to stay. In the U.S., Shuddle offers carpooling for children, Lyft for Work offers carpooling for workers, while RelayRides offers cars that are sitting idle for rent. Airbnb already offers homes, apartments and rooms in Ottawa, and eCelery delivers meals produced at home by local cooks. The shared economy promises to unlock the value of all kinds of unused assets - from empty cars to empty homes.

But it’s also creating potential headaches for those who shape and administer regulations and bylaws. Cities are grappling with the question of whether to apply regulations to the new sharing-service economy or back away.

On one hand, regulations force the market to do what it might not do on its own, such as protect consumers’ health and safety. Ottawa has about 200 accessible licensed taxis, for example, while Uber is under no obligation to ensure that a minimum number of cabs is accessible.

On the other hand, cities can reap the benefits of the sharing economy. An Airbnb report on its own impact on New York City between 2012 and 2013 claimed that 400,000 Airbnb guests spent $632 million and supported 4,580 jobs. Airbnb guests stayed two days longer and spent $200 more at local businesses than hotel guests.

In February, Amsterdam declared itself to be Europe’s first “sharing city” and announced a “responsible home sharing” agreement with Airbnb. Among other provisions, homeowners will be allowed to rent their home for a maximum of two months of the year to a maximum of four people at a time. Airbnb also agreed to collect tourist taxes on behalf of its hosts.

In a report released last February, the policy think thank Mowat Centre compared government reaction to the expanding sharing economy to a “frantic game of ‘whack-a-mole’ - struggling to contain these new enterprises while even more pop up. This is unproductive.”

The Mowat Centre describes two ways of looking at handling the emerging sharing economy services: the “precautionary principle,” where governments impose laws and regulations to prevent potential harm, and the “permissionless innovation” model, which assume the sharing economy’s innovations will be beneficial, with regulatory brakes being applied only if that’s not the case.

“Using this approach policymakers can wait and see if the sharing economy comes up with answers of its own before bringing in regulations that might stifle innovation,” according to the report by the Mowat Centre, which is contributing to the KPMG discussion papers.

“Governments need to consider how many of these issues the market will sort out for itself,” it said.

Peers, a platform for sharing economy workers, has already created insurance products for Airbnb hosts and ride-sharing drivers, for example.

The Ontario Chamber of Commerce recommended in August that the province take an “empty the box” approach to regulation, keeping only those regulations that are necessary and relevant today. Both the chamber and the Mowat Centre agree that the sharing economy recognizes that policing itself is crucial to its own survival. Online reputation mechanisms are a “viable alternative” to establishing consumer trust, said the chamber.