Ontarians think Uber-like services boost economy: Report

Ontario Chamber of Commerce study finds two-thirds of us think services like Uber, Airbnb and Autoshare are good for the economy.

Thestar.com
Aug. 25, 2015
By Sunny Freeman

Four in five Ontarians support Uber, even though only one in five in the Greater Toronto Area has used the ride-hailing service.

A study from the Ontario Chamber of Commerce Harnessing The Power Of The Sharing Economy, calls on the Ontario government to become a leader in the sharing economy by introducing regulatory changes. That would avoid the type of conflict that has arisen in Toronto over Uber.

“Jurisdictions that are building adaptable regulatory and tax frameworks are more likely to produce new technologies that will drive economic growth,” said Allan O’Dette, CEO of the business lobby.

Sharing services such as Uber, Airbnb and Autoshare, use online platforms to connect people and the idea is popular among tech-savvy Millennials.

Four-in-ten Ontarians between the ages of 18 and 34 polled said they are consumers in the sharing economy, with many saying sharing services are more affordable and convenient than traditional alternatives.

Two-thirds of Ontarians surveyed believe sharing services benefit the economy. That number was 85 per cent in the GTA.

Uber operates in 20 Canadian cities and is mired in controversy. This has led to bylaw crackdowns and legal challenges in Vancouver, Edmonton and Toronto. Its arrival in Toronto sparked protests from taxi drivers, who are concerned about the overhaul of their traditional business.

But the thousands of startups hoping to apply an Uber-like business model are not simply a fad, the Chamber report said. It cited a study by consulting firm PwC Canada that estimates the economic contribution of the global sharing economy could be $335 billion by 2025.

Ontario could benefit by being one of the first governments to find a balance between allowing sharing services to exist in a legal grey area and banning them outright, the report said.

“Channeled properly, the sharing economy can create value for consumers by bringing new competition to sectors whose regulatory protection (in some cases) have allowed them to become inefficient,” it said.

“The advent of the sharing economy can also be used to re-evaluate the often outdated and unnecessary regulatory requirements faced by established operators.”

The report also identified gaps in insurance coverage for owners and unclear tax policies as some of the biggest challenges facing the sharing economy.

The president of the Canadian Taxi Association said Tuesday he was disappointed that the report did not address issues surrounding public safety and that his association was not consulted.

“Our industry is a quasi-public service and we have to abide by very stringent rules and regulations in order to make sure the public is protected,” said Marc Andre Way.

“And to allow anyone to start performing the same duties as taxis without the right regulations just makes no sense.”

The Ontario Liberals showed support for the sharing economy in the 2015 budget, pledging to work with new firms to help them comply with existing regulations while also acknowledging that some might need to adapt to new business models. A spokeswoman said Tuesday the government looks forward to reviewing the details of the chamber’s report

The City of Toronto has launched a review of the impacts of Uber and similar technologies and will present recommendations in September.

Recommendation #1

Update regulations to leave only those that are most relevant. One of the best examples of outdated regulations, the report said, is the Innkeepers Act, which still applies to hotels but nearly one-quarter of the rules pertain to how and when an inn owner can place a lien on a customer’s horse.

Recommendation #2

Talk with the insurance industry about how to fill gaps in coverage for small players in the sharing economy to fix loopholes and clear up confusion in ride-hailing and home renting coverage. Uber has already struck a deal with U.S. insurance providers to cover drivers if they’re involved in an accident.

Recommendation #3

Include the sharing economy in the province’s current review of workplace legislation to address the rise of non-traditional work, including freelance contracts and self-employment. Full-time workers in the sharing economy don’t have access to Employment Insurance or the Canada Pension Plan.

Recommendation #4

Work with the Canada Revenue Agency to clarify tax reporting rules and provide a “how-to” guide to make people operating in the sharing economy aware of their obligations and make it easier for them to file taxes. Uber drivers are responsible for collecting tax from their customers, but it remains a grey area.