Customer demand will drive regulatory change, Uber says

Vancouversun.com
Sept. 28, 2015
By Jenny Lee

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Uber, the controversial on-demand car service, is counting on consumer support to fuel change and ease its way through regulatory change.

More than 100,000 visitors to Vancouver tried to use the Uber app in the past year, David Plouffe, Uber’s chief adviser and former campaign manager for U.S. President Barack Obama, said in an interview.

“Consumers strongly feel that they would like to have Uber here, and ‘ride-sharing’ generally.

The numbers are important. In Toronto today, we have 16,000 people driving on the platform, almost 10,000 in Seattle, over 40,000 in L.A. I don’t think the scale economically is properly appreciated.”

Plouffe estimates the Vancouver “for-hire vehicle” market could grow 10-fold over the next few years.

“Everywhere that we are, the pie is just exploding. ... You’re still going to have a healthy taxi industry, you’re still going to have a very strong public transportation sector, but now there’s a new way for people to get around,” Plouffe said. “What will people be doing less of? Driving their own personal car.”

San Francisco-based Uber, started in 2009, is valued at more than $50 billion and operates in 320 cities worldwide. In Canada, Uber is in 25 municipalities, including Ottawa, Edmonton, Toronto, Montreal, Quebec City and Halifax. But Vancouver currently has a moratorium on the service.

Uber frames itself as a “ride-sharing” service, but opponents call it a bandit taxi company and raise concerns about safety, insurance and taxation. “Ride sharing” is generally accepted as a form of carpooling for people with a shared destination, but with Uber, riders use an online app to book a driver, who is paid online by credit card according to rates set by time and distance to take them to a specific location.

Uber is “eager” to discuss its service with city officials and the Vancouver community, Plouffe said.

“The debate isn’t that we don’t want to be regulated at all - we actually want to be regulated, but in a smart, modern way. The point is that all over the world people have found a way forward so there’s a menu now of options of how different municipalities have dealt with this.

“We’re confident there will be a pathway forward with government. We’ve been very successful all around the world.”

The best business models, such as in Mexico, Chicago and Illinois - and planned for Toronto - create a licensed category that allows the service in a regulated space, and with public safety issues such as background checks, vehicle inspection and insurance at their core, Plouffe said.

“Obviously, financial considerations have been part of the discussions in some cities.”

“What won’t work is to have Uber drivers treated like traditional taxi,” he said. A key for Uber is that barriers to entry be low. Many Uber drivers are on the road less than 10 hours a week.

While taxi owners “don’t want to give up a monopoly,” Uber is “very confident that traditional taxi and Uber can coexist. The market grows,” Plouffe said.

He emphasized the potential of supplemental income, particularly in a city with affordability issues, and Uber’s potential role in reducing congestion and making tourism “more efficient.”

The most popular car on Uber is the Toyota Prius, as drivers naturally seek to drive more fuel-efficient vehicles.

Conflict is not surprising as a new industry seeks to get established, he said.

“I think the key thing is just a lot of public education. ... There is a pathway forward, which isn’t that complicated. It’s more about political will than the details, we have found.”

Uber has seen support from groups such as the Suzuki Foundation, which sees environmental benefits from the service, and the Canadian Taxpayers Association, which sees economic opportunities, Uber Canada general manager Ian Black said.

Depending on the service selected, Uber drivers could be a professional, or someone driving their own car to make some extra income. GPS tracks the driver’s route while providing details to the customer. Fares are generally cheaper than those offered by heavily regulated taxis.