Uber has no hope in this town

Argus · October 2, 2014

So Uber came to Ottawa this week. It has no chance of lasting, and I can only imagine its run by wide-eyed innocents who don't get the way taxi services are run in this town. First of all, taxis are more heavily regulated than any industry in Ottawa. The regulations are all basically designed to make sure there's no competition, and to protect the interest of the wealthy men who own all the licenses.

Almost none of the drivers own a license. They must rent them from these 'brokers' who bought them all up. The city sells licenses for about $150, except the city doesn't sell licenses any more. The licenses have no expiration and can be traded and sold which they are, for about $200,000 apiece. The brokers own the licenses, and they rent them to drivers at exorbitant fees. The drivers in turn work 12hr shifts, and turn over a substantial portion of their earnings to the brokers. The brokers make sure they cut city council in on the profits with regular 'contributions'.

The result is that taxi service in Ottawa is extremely expensive, run by two or three companies controlled by the men who own most of the licenses, and the drivers are a motley and itinerant group of mostly poorly trained immigrant drivers. It's horribly inefficient and ineffective, exploitative of the drivers, and bad for everyone other than the guys who own the licenses.

And the city government will burn the place down rather than change it. It's already announced it will immediately start putting 'undercover' riders into place calling Uber, and putting huge fines on every driver without a license who dares to charge a fee.

I guarantee that if Uber were allowed to operate it would put every taxi in Ottawa out of business. But there's no way Ottawa's government is going to allow it. None of the councilors nor the mayor are worried about being re-elected. Councillors and mayors are usually in for as long as they want once elected in Ottawa. In the last 50 years, the only guy who changed the pattern was an outsider tech business guy who defeated establishment guy Chiarelli for mayor, then got defeated the following year by establishment guy Watson.

So enjoy your brief stay, Uber, but keep your clothes packed. You won't be staying.

cybercoma · October 2, 2014

I had no idea what Uber was. Here's the link to their website: https://www.uber.com

How does it work, Argus? What makes them great? The website is cumbersome and not very informative for people who don't know what Uber is.

Accountability Now · October 2, 2014

No chance? It is currently working all across the US and has done just fine. I don't understand how the politics of Ottawa would be differnt than any other big city in the US but maybe it is.

Regardless, I used Uber in the US earlier this year and thought it was the cats meow. You order the service through an app which confirms your car and shows you exactly where it is on a map at all times. You can sit and wait inside until your car arrives. When it does it sends a text saying its there and will only allow you to enter (thus allieviating the cab stealing we often see).

If politics isn't a part of the equation then I think its the cab companies that have everything to fear as Uber will crush them.

EDIT: The part about Uber that I foudn the best was that no money traded hands. Everything went right to your credit card and an email receipt was sent right away. The tip is included. I rarely have cash on me for taxis and waiting for them to pull out and use their mobile is painful at times.

Edited October 2, 2014 by Accountability Now

PIK · October 2, 2014

Ottawa does not like things that work.

Wilber · October 2, 2014

Not just Ottawa, Vancouver is keeping them out as well in spite of surveys saying VR has the worst taxi service of any major city in North America.

eyeball · October 2, 2014

The regulations are all basically designed to make sure there's no competition, and to protect the interest of the wealthy men who own all the licenses.

That's pretty much the basis of our fishing industry on the coast now, and the government pretty much burnt ordinary people's place in it to the ground to establish that basis. This is pretty much going on all over the planet now.

Ottawa to target unlicensed Uber rideshare with fines

All the same I imagine Uber must have learned how to deal with issue now having established itself in 200 cities and 45 countries. Power to them.

Maybe they should go after the users - the digital hitch-hikers using transport apps. Make it a moral issue. I mean, only a lowlife scumbag would deliberately go out of their way to get around a regulation designed to make rich people richer.

cybercoma · October 2, 2014

This company sounds awesome. I can call a cab with an app and have it paid automatically on my credit card without having to mess around with cash, change, and tips? You can see where your cab is on its way to your place too? Sign me up. Too bad it will be a century before it arrives where I live.

Accountability Now · October 2, 2014

This company sounds awesome. I can call a cab with an app and have it paid automatically on my credit card without having to mess around with cash, change, and tips? You can see where your cab is on its way to your place too? Sign me up. Too bad it will be a century before it arrives where I live.

It is awesome. All the control from your Iphone. If you want to cancel the service then hit cancel and its done. If the one you picked is too far away then you resend the request and try to find one closer. Its technology that taxi companies should have implemented years ago.

eyeball · October 2, 2014

This company sounds awesome. I can call a cab with an app and have it paid automatically on my credit card without having to mess around with cash, change, and tips? You can see where your cab is on its way to your place too? Sign me up. Too bad it will be a century before it arrives where I live.

I was hoping things might change a little faster than that.

I suspect one day the Uber's and Lyft's of the world will be crying like the taxi moguls too the day you can just app-up a hands-free car and send it on it's way when you're done with it. Make mine smoker friendly and with a bar please.

On second thought it will likely be car manufacturers, car salesmen and the from-my-cold-dead-fingers-steering-wheel nuts who will be rioting in the streets the day we can do that (which is probably now or damn close to it).

Edited October 2, 2014 by eyeball

Argus · October 2, 2014

No chance? It is currently working all across the US and has done just fine. I don't understand how the politics of Ottawa would be differnt than any other big city in the US but maybe it is.

Uber works through ride sharing. The people who pick you up aren't licensed cabbies. They're people using their car, usually part-time, to make extra money. Of course, Uber checks them out in advance, and they have to carry extra insurance, but in Ottawa, only licensed cabs can drive people for money. Now if the drivers who are now driving taxis wanted to shift and start working for Uber, that could work. They'd likely make more money. Except of course they can't, because they don't own the licenses. Also, they're in a union, and they can't drive for more than one company at a time.

eyeball · October 2, 2014

What's the problem, haven't people in Ottawa ever heard of free trade and deregulation?

Some people's kids...you clean em up, you dress em up, and you still can't take them out in public.

guyser · October 2, 2014

but in Ottawa, only licensed cabs can drive people for money.

Thats not true.

Church groups....

Limousine Services....

Hotel Busses (for the most part free)

I am more curious how the drivers for Uber will get the proper insurance.

But for now, take them up on the offer, its free for the next week....and immune from prosecution because of that.

Accountability Now · October 2, 2014

Uber works through ride sharing. The people who pick you up aren't licensed cabbies. They're people using their car, usually part-time, to make extra money. Of course, Uber checks them out in advance, and they have to carry extra insurance, but in Ottawa, only licensed cabs can drive people for money. Now if the drivers who are now driving taxis wanted to shift and start working for Uber, that could work. They'd likely make more money. Except of course they can't, because they don't own the licenses. Also, they're in a union, and they can't drive for more than one company at a time.

I am aware of how Uber operates and the people that drive the cars. I trust they had similar issues in every other big city they started in. Perhaps Ottawa will be different...I don't know but if Uber starts catching on in Canada like it has in the US then the people of Ottawa will probably force the rules.

I heard that Uber was coming to Edmonton but haven't seen in yet. The big news is how it would affect our airport taxi service. Currently only one or a certain number of taxi companies have the contract to pick people up at the airport and no other taxis can get in there. As such the rates are quite high for airport service. However, there was thought that Uber wouldn't be restricted as its technically not a taxi and doesn't need to pick you up at the taxi lane since you can make direct contact with your driver.

Accountability Now · October 2, 2014

Not just Ottawa, Vancouver is keeping them out as well in spite of surveys saying VR has the worst taxi service of any major city in North America.

Calgary and Edmonton are trying to decide on using it as well. However, there are petitions out there and I can't see the cities saying no if it gets the support

overthere · October 2, 2014

However, there was thought that Uber wouldn't be restricted as its technically not a taxi and doesn't need to pick you up at the taxi lane since you can make direct contact with your driver.

I don't see how it is different from a taxi/limo- public carrier, no route... how is it not a taxi, except that taxis are required to have specific taxi licenses, special operators licenses, and auto insurance that is about double the regular cost.

One effect it will have if implemented is to make those expensive taxi licenses much less valuable.

Accountability Now · October 3, 2014

I don't see how it is different from a taxi/limo- public carrier, no route... how is it not a taxi, except that taxis are required to have specific taxi licenses, special operators licenses, and auto insurance that is about double the regular cost.

One effect it will have if implemented is to make those expensive taxi licenses much less valuable.

I was saying its different from a taxi in that the taxis at airports all line up in that lane and you have to go to that spot to get one. Uber can pick you up in the regular pick up lanes which taxis not under contract with the airport cannot do.

overthere · October 6, 2014

I was saying its different from a taxi in that the taxis at airports all line up in that lane and you have to go to that spot to get one. Uber can pick you up in the regular pick up lanes which taxis not under contract with the airport cannot do.

What I meant is that they operate as a vehicle-for-hire and effectively are no different than any other taxi or limo service, both of which are pretty tightly regulated here.

The airport rules don't apply beyond the airport. Really the only reason they have airport rules is to generate revenue for the airport authority.

They have started to adverise for drivers in Edmonton. Two Classes of Uber drivers are sought- one class is for people with taxi/limo licenses already and another class of ordinary people who want extra money.

Boges · October 7, 2014

I'm pretty sure an Uber Driver doesn't have to pay income taxes on his "fare" either.

Accountability Now · October 7, 2014

I'm pretty sure an Uber Driver doesn't have to pay income taxes on his "fare" either.

Why is that? Its not like he/she is collecting cash.

Boges · October 7, 2014

Why is that? Its not like he/she is collecting cash.

I doubt Uber issues T4s. But perhaps they do. <_<

I downloaded the app to see what it's about. You gotta put in a CC number before even looking to see how widely available these drivers are in your area. I don't often need a cab but next time I do I might look into it.

overthere · October 7, 2014

I doubt Uber issues T4s. But perhaps they do.

I downloaded the app to see what it's about. You gotta put in a CC number before even looking to see how widely available these drivers are in your area. I don't often need a cab but next time I do I might look into it.

The drivers are not employees, and Uber will be uber-careful to avoid any semblance of an employer-employee relationship.

So there will not be T4s.

But they will most certainly keep detailed records of revenues and expenses, and every driver will have their SIN number and/or GST number on tap for CRA to peruse.

I cannot imagine CRA would ignore all those drivers.

I wonder too how those drivers will reconcile expenses with CRA, since most drivers are casual, CRA may not recognize all the expenses they'll undoubtedly try to claim.

Accountability Now · October 7, 2014

I doubt Uber issues T4s. But perhaps they do.

I downloaded the app to see what it's about. You gotta put in a CC number before even looking to see how widely available these drivers are in your area. I don't often need a cab but next time I do I might look into it.

The guy in the US explained it to me. The driver makes 85% of the fare which is charged directly to your credit card by Uber. Uber then pays the driver. I'm not saying they do issue a T4 but there definitely is a paper trail showing these drivers get paid which would lead me to believe they are liable to pay taxes....whether they do or not is unknown.

overthere · October 7, 2014

The guy in the US explained it to me. The driver makes 85% of the fare which is charged directly to your credit card by Uber. Uber then pays the driver. I'm not saying they do issue a T4 but there definitely is a paper trail showing these drivers get paid which would lead me to believe they are liable to pay taxes....whether they do or not is unknown.

Every penny is transparent to the IRS or CRA.

In the past both have gone hard after 'grey market' money, and Uber drivers will be far easier prey than say, organized barter schemes..

Boges · October 7, 2014

The guy in the US explained it to me. The driver makes 85% of the fare which is charged directly to your credit card by Uber. Uber then pays the driver. I'm not saying they do issue a T4 but there definitely is a paper trail showing these drivers get paid which would lead me to believe they are liable to pay taxes....whether they do or not is unknown.

There's also a paper trail if you get paid cash. If you're audited you'd have to reconciled every deposit you make. You just pray you aren't.