City staff recommends lower taxi fares in Toronto

On Wednesday, licensing staff will release proposals to regulate Uber and lower cab fares in Toronto.

Thestar.com
Sept. 8, 2015
By Betsy Powell

City staff are proposing new rules to regulate Uber in Toronto and recommending that cab flat fees drop $1, to $3.25, to help the beleaguered taxi industry compete with the ride-hailing company, the Star has learned.

The recommendations are included in a new report by the municipal licensing and standards division, which earlier this year tried unsuccessfully to shut down Uber’s operations with a court injunction, arguing that public safety was at risk.

City council voted in July to review the existing bylaws and to recommend changes to ensure the taxi business and Uber are on a level playing field.

The taxi industry says the UberX service, which allows passengers to hire regular drivers using a smartphone app - usually at prices cheaper than a taxi - has caused a dramatic drop in fare revenue.

After consulting with representatives from Uber and the taxi industry, licensing staff came up with draft proposals for council to consider, including the recommendation that the flat fee charged to passengers entering a cab in Toronto be lowered to $3.25 from $4.25. Mayor John Tory has said he supports lower taxi fares.

That rate has increased by nearly 40 per cent since 2005, when it was set at $3 following a spike in fuel costs. The introduction of the HST led to the last hike, in 2010. Toronto taxi fares are among the highest among North American peer cities, according to the Toronto Taxicab Industry Review final report.

In addition to a flat fee, cab riders are charged 25 cents for each additional 0.143 kilometre and 25 cents for each 29 seconds the meter is on but the taxi is not moving. Those charges would not change under the proposals, a source said.

The thrust of the other recommendations involves including Uber in a new bylaw with the creation of a new licensing category called Transportation Network Companies (TNC), a designation already in place in several U.S. cities, a source said.

It’s expected TNCs would be required to carry commercial liability insurance when a passenger is in the vehicle, pay an annual permit fee and conduct driver background checks. Details will be announced Wednesday.

Taxi companies have argued that UberX drivers are lawbreakers who get a free ride while licensed cabs are subject to heavy regulation and must bear additional costs such as licensing fees, insurance and maintenance.

Uber has argued it is a technology company that can’t be governed by the same rules that apply to the traditional taxi industry.

The city’s licensing committee will consider the Ground Transportation Review report next week. Council will have final approval.