Second Session, 41st Parliament (2018)
This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report. Use of this transcript, other than in the legislative precinct, is not protected by parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal liability.
REPORT OF PROCEEDINGS
SELECT STANDING COMMITTEE ON
TUESDay, JANUARY 9, 2018
TUESDAY, JANUARY 9, 2018
The committee met at 9:01 a.m.
[B. Ma in the chair.]
B. Ma (Chair): Good morning, everyone. Welcome back to day 2 of the Select Standing Committee on Crown Corporations hearings on the issue of ride-sharing. My name is Bowinn Ma. I am the MLA for North Vancouver–Lonsdale and the Chair of the Select Standing Committee on Crown Corporations. I would like to begin with the recognition that our meeting today takes place on the traditional territory of the Musqueam, Squamish and Tsleil-Waututh peoples.
We are an all-party parliamentary committee of the Legislative Assembly with a mandate to examine, inquire into and make recommendations on ride-sharing in British Columbia, and we must issue a report by February 15, 2018.
The committee is meeting to hear from expert witnesses on the following questions. One, what is the impact that ride-hailing would have on different communities around the province? Two, what regulatory regime should be established to allow ride-hailing to operate in B.C.? All the information received will be carefully considered by the committee as it prepares its report to the Legislative Assembly.
Today's meeting will consist of 15-minute presentations, followed by 15 minutes for questions from committee members. If presentations are quicker than 15 minutes, the remaining time is allotted to questions.
All the meetings are recorded and transcribed by Hansard Services, and a complete transcript of the proceeding will be posted on the committee's website. These meetings are also broadcast as live audio via our website.
I will now ask the members of the committee to introduce themselves, and I will begin at this end of the table with Dr. Weaver.
A. Weaver: My name is Andrew Weaver. I'm the MLA for Oak Bay–Gordon Head and the leader of the B.C. Green Party.
R. Kahlon: Ravi Kahlon, the MLA for Delta North.
R. Singh: Rachna Singh, MLA for Surrey–Green Timbers.
S. Chandra Herbert: Spencer Chandra Herbert, MLA Vancouver–West End, Coal Harbour.
S. Cadieux (Deputy Chair): Stephanie Cadieux, MLA Surrey South.
P. Milobar: Peter Milobar, MLA Kamloops–North Thompson.
J. Johal: Jas Johal, MLA Richmond-Queensborough.
J. Sturdy: Jordan Sturdy, MLA West Vancouver–Sea to Sky.
B. Ma (Chair): Assisting the committee today are Susan Sourial and Stephanie Raymond from the Parliamentary Committees Office. Steve Weisgerber and Simon DeLaat from Hansard Services are also here to record the proceedings.
On behalf of the committee, I'd like to thank the presenters who have taken their time to be with us today and would like to introduce our first presenter from Lyft, Timothy Burr Jr.
I am going to set up a 15-minute timer for you on my trusty iPad here. I think it ends with a fancy little tune. You may begin.
Presentations on Ride-sharing
T. Burr: Thank you. Good morning, Chair, Deputy Chair and members of the committee. My name is Timothy Burr, and I'm the director of public policy for Lyft, responsible for Lyft's public policy here in British Columbia.
First, I'd like to thank the committee for inviting Lyft to testify today. We are supportive of this process and excited about the opportunity to work together on crafting a regulatory framework to enable transportation network companies, TNCs, such as Lyft to operate here in B.C.
Let me start by saying that since we first started exploring the opportunity to offer services in Canada, we've heard from voices across B.C. who are looking forward to ride-sharing as an additional transportation option. We're excited about the opportunity to provide that service.
I'll focus my comments my comments today on the two areas: (1) the benefits that ride-sharing will have on those communities across B.C. and (2) the necessary regulatory regime to enable ride-sharing in the province.
I've been with Lyft for 3½ years and have been responsible for developing ride-sharing policy across the western United States, including in California, our largest and oldest market, our interesting regulatory history. I was able to join you for yesterday's discussion, of course, and to hear some of the questions that were raised. I hope to address many of those today and shed some light on different regulatory approaches to all the critical issues raised.
Now, really quick, what is Lyft? Lyft, in 2012, became the first company to establish peer-to-peer on-demand ride-sharing, which now the world knows simply as ride-sharing or, in reference, ride-hailing. Lyft was created as an alternative to personal vehicle ownership. We seek rules and regulations specific to this industry because we are doing something different — and have been since day one.
Every week Lyft connects millions of people with efficient, affordable and safe rides. At a basic level, we seek to make it easier for people to offer their neighbours a ride and help people car-pool more efficiently. Lyft now operates in over 350 communities across all 50 United States. On December 12, we launched in Toronto, our first international community. Based on what we've seen in those communities where we operate, please allow me to briefly discuss some of the impacts we expect ride-sharing to have throughout B.C.
Fundamentally, we believe that creating a place for ride-sharing here is in the interest of public health and sustainability. It is important to get all the policy details right. We acknowledge that things will change for some businesses, but keeping an eye on the overall social benefit should be our shared goal. For passengers, Lyft will offer reliable rides and create an expectation for rides on demand within a few minutes. It will empower passengers with new levels of transparency, accountability and certainty when they request a ride.
Lyft will improve safety by offering safe rides, allowing folks a safe ride at the end of the night. We know that having Lyft available in communities has reduced drunk driving and saved lives. Personally, I was a prosecutor before I joined Lyft, and the opportunity to find a solution to drinking and driving, which has affected me personally, was part of my motivation for joining the company. One saved life is enough, but studies show the benefit reaches far beyond that, as 99 percent of passengers indicate that Lyft rides are a safe space, and 88 percent indicate that they avoid driving under the influence because of Lyft.
We know that it's no longer necessary for a third-shift worker or a person in a rural community to stand out in the cold and wonder: "How am I going to get home tonight?" Lyft will enhance part of the current transportation network and will enhance access to all modes of transportation. Our experience, such as….
Let me start here. This is a slide of what Lyft was founded to solve. At our core, we resolved to reduce car ownership and solve this problem of congestion. It's based on the premise that the vehicle is one of the most underutilized resources. The average car is only used 4 percent of the time, and 80 percent of the seats on the road are vacant at all times.
What we have found in helping to address those issues is that Lyft has complemented the existing transportation infrastructure, including public transit, car-share and bike-share programs, as well as growing the pie of riders for existing private transportation providers. We all seek the same goal, which is to empower passengers to leave their personal car at home.
Across the U.S., and now Toronto, Lyft passengers are using the service to close the first-mile, last-mile gap between their home and nearest transit station. In San Francisco, my hometown, nearly a quarter of all rides start or end at a transit station. Our number one pickup and drop-off location is a transit hub, the Caltrain station. In Boston, 33 percent of rides start or end at a transit station. We see these numbers throughout our larger cities.
Based on this rider data, this has created many partnership opportunities with transportation agencies and municipalities to make it easier for people to use public transit by serving as that first-mile, last-mile connector or by being a guaranteed ride home from work, thereby incentivizing car-pooling and use of public transit in at least one direction.
Some of the items we've been working on as of recently, which have had tremendous growth, are what we call suburban solutions — where we've seen that in more rural areas they've unfortunately had to discontinue, say, a bus service that wasn't being utilized. We've been plugged in for some of those trips, and paratransit is an ever-growing area where we're growing partnerships.
Ride-sharing has become a critical transportation option for folks from all walks of life. We think it's valuable that university students can get a safe ride home and that seniors can continue to have the freedom they once had when they were able to drive themselves around.
Here's a list of some of our current transit partners. This kind of just scratches the surface.
Now, for drivers in B.C. who seek some extra cash, Lyft will create a new and flexible economic opportunity that turns anyone with a car into an entrepreneur who can set a schedule according to their terms. The Lyft driver community is made up of retirees, single parents, students, folks trying to get around and families simply trying to make ends meet.
In fact, 93 percent of Lyft drivers already have a job, are seeking work, are retired or are students, and 82 percent of Lyft drivers drive fewer than 15 hours per week. Folks truly utilize driving on Lyft in a part-time manner. They are casual drivers who don't fall into traditional limo, taxi or other type of livery framework.
We hear from our drivers that flexibility is key, and 93 percent indicate that creating their own schedule is either very or extremely important to them. In 2016, in the U.S., drivers earned over $1.5 billion annually. That number, in 2017, jumped to $3.5 billion for their families and professional ventures.
Along with these community and economic benefits, we believe that Lyft will contribute to a more sustainable B.C. In the U.S., as I said, about 80 percent of the seats on the road have only one occupant. We heard yesterday a couple of times that in Vancouver, over 90 percent of folks commute by themselves. By getting a Lyft instead of driving their cars, folks aren't just saving time. They're reducing congestion by sharing rides, freeing up parking and making more efficient use of the existing roads.
Many questions during yesterday's testimony asked about the impact on congestion, something we're facing head-on at headquarters and having great conversations about. We do encourage members of the committee — and I can provide this to you — to review a brand-new study that was just released last week in the San Francisco Chronicle that found ride-sharing 20 percent more efficient than personal vehicles.
We believe that the next step will be cities incentivizing higher-occupancy trips, our shared-ride products such as Lyft line. That study that I just cited actually indicated that new policies could make Lyft up to 60 percent more efficient than personal vehicles in cities.
The car-pooling feature like I just mentioned, Lyft line, matches multiple riders headed in the same direction. It's exactly the type of solution we need to both take cars off the road and save consumers money.
Lyft line was founded when we saw, with about 90 percent of our trips in both San Francisco and Los Angeles, somebody else was taking the exact same trip within a few minutes of that. What happens if we could combine those folks travelling together? Where it's live, which is, I think, about 15 markets, about 40 to 50 percent of our passengers choose Lyft Line. It's about 40 percent of our rides in some of our biggest markets.
In San Francisco, one-third of those Lyft line rides are actually triple matches, so not just two different parties travelling together, but one, two, three different parties travelling along the same path with one driver.
Lyft will increase mobility options for underserved areas in B.C. and in rural and small-town areas. It is true that Lyft typically began in cities and urban areas, but we've seen the growth of Lyft to be…. The expectation is for Lyft to be available throughout rural areas.
We do operate in all 50 United States, but in August of 2017, we made the decision to serve those rural areas and turn the app on across the entirety of 40 states. Subsequent to that, in October, we launched the state of South Dakota, which is fairly rural. We launched the entire state and made the whole area active. What happens in those small towns, including where my parents live, which is a town of about 2,200? It only takes three or four drivers to make a world of difference in that small community.
With this expansion, Lyft now serves 95 percent of the U.S. population. In those places where we do not currently operate, our cities that are set up and have some regulatory uncertainty…. There might be statewide regulation that is overlapping with municipal regulations. It's those types of patchwork regulations that can disproportionately impact those rural communities.
One of our newest features that I wanted to highlight today, that we're excited about and is a core of the Lyft community, is a program called Round Up and Donate. This allows passengers to opt in to decide to donate — basically, round up to the nearest dollar and donate to a charity of their choice. In the first, I believe, five months that this has been live, Lyft passengers have already donated over $2 million.
I'm going to talk about the regulatory structure in my remaining four minutes and 40 seconds. I'm going to start really quickly with the story of our first set of regulations, which I believe remain instructive today.
When Lyft launched, the California Public Utilities Commission, our first regulator, took a look at what we were trying to do and said: "This is a nascent industry." They recognized that this was a new thing, different from existing transportation providers, and set out to craft rules to "encourage innovators to improve the lives of Californians, with the goal of ensuring safety while not stifling innovation in transportation."
Now 44 states have established similar comprehensive regulatory frameworks. An additional five have insurance-only regulations that recognize the distinct nature of transportation network companies, and now we're seeing provinces and cities across Canada do the same.
The starting point for any regulation, of course, should be safety. We advocate that both background checks and vehicle inspections should be part of and codified in the provincial regulations, setting a uniform standard for safety across B.C. That should indicate what those criminal convictions are that should prohibit folks from becoming a driver, what those driving infractions or whatnot are that should prohibit somebody from becoming a Lyft driver.
Lyft drivers currently are extensively prescreened and are passed through a thorough driving record review in addition to having their vehicles pass a comprehensive vehicle inspection.
To do the background checks, currently, we contract with a company called Sterling Talent Solution. It is an international provider used by 25 percent of Fortune 100 companies and numerous municipalities. It sounds like a certain soccer association might use that as well. Sterling is also accredited in the U.S. by the National Association of Professional Background Screeners, which requires a rigorous audit of its procedures and policies. We also seek that the provincial regulations enhance safety by requiring TNCs to utilize technology to provide customers with new transparency and accountability features in addition to robust background checks.
Every ride should be required to be tracked via GPS. All rides should be required to be cashless. It should be required that before any ride, passengers receive their driver's picture, name, make and model of the vehicle, and licence plate number before they enter, and require for the TNCs to provide both the driver and passenger an opportunity to rate each other after the ride and allow for instant removal from the platform if necessary.
The ability for drivers and riders to provide real-time feedback is critical to the safety of the platform and allows for tracking safety to be ongoing throughout every ride.
On Lyft, riders can also send their real-time GPS and ETA to family and friends. In short, no ride is ever anonymous, due to the technology. Combining background checks with real-time feedback had never been done before and is the reason that people are choosing Lyft to take millions of trips in the U.S. and Canada.
On pricing, we'd recommend establishing rules that do permit flexibility but require a new level of transparency. TNCs should be required to display the pricing model and provide a price quote before the ride.
I'd also like to talk for a moment about accessibility, which was discussed yesterday. I'm happy to go through many of the different options that we've explored and different markets on accessibility. This is critical to Lyft. Our senior management has actually established a team to help solve the issue with accessibility. We have a number of partnerships, including with the National Federation of the Blind and other organizations, that speak to our commitment to accessibility.
We have also seen that the most successful regulations create a uniformity across a state or province. Provincewide legislation is a path towards providing consumers, drivers and visitors a consistent experience.
On insurance — and this is an overview of our insurance currently in place in Toronto — Lyft would advocate for the regulations to recognize the distinct nature of how TNC drivers use their vehicles part-time for ride-sharing. We'd recommend that the regulations require TNCs to obtain blanket coverage that covers all periods of a ride and, as you see, this starts at the moment that a driver turns the app on and is available to accept a ride, through accepting a ride and connecting with the passenger, to picking up that passenger, all the way through to the disembarkation of the passenger and until that rider or driver turns off the application.
Ideally, the legislation would permit the ability for TNCs to purchase a usage-based policy in the private marketplace. Of course, we've met with ICBC and are continuing those discussions. And further, any TNC drivers should be required to have their standard personal insurance before they can go through on-boarding on a TNC platform.
In closing, we do urge this committee to support establishing a clear, workable regulatory framework that can be applied to all ride-sharing companies, regardless of size and cities of operations.
Thank you so much, and I do look forward to your questions.
B. Ma (Chair): Thank you so much.
We will begin with Dr. Weaver.
A. Weaver: I wanted to actually ask you to expand upon the diversity aspect and access for people with a diversity of needs. I do know that you work with some jurisdictions by providing into various funds to assist with access. Can you just expand upon that some more, so we could learn what Lyft's approach to this is?
T. Burr: Absolutely. I'll start saying this on the issue of accessibility. How it should be dealt with on TNC platforms has been present in our regulations from the early days. Some of the early regulations actually require us, if we cannot provide a ride through the platform, to essentially contact with another provider or provide that information to the person seeking a ride. Those regulations have, I would say, grown up a little bit over time.
One of the alternatives that we've seen explored in a number of markets is that there be a per-ride accessibility fee that is paid — for those providers who are providing WAV accessible vehicles; this is just focusing on those rides that the wheelchair can only be in a certain WAV accessible vehicle — to provide some level of funding or partnerships.
One regulation that I point to that is very recent is in Dallas. There was new statewide legislation that was passed in Texas. As part of the Dallas provisions, they basically tasked companies, as well as private providers, to work on pilots together to sort of figure out what is the best way to address this critical issue of accessibility.
S. Chandra Herbert: Thanks for sharing some of the regulations that happen in different jurisdictions. I'm curious. You'd mentioned that Lyft was launched to, I believe you said, solve congestion or something like that. San Francisco — as you'll be well aware, as you live there — needs a lot of help in that regard. But a supervisor, the mayor, a couple of others in San Francisco seem to have suggested that car-sharing services like Lyft have actually added to congestion.
I know in New York, they're looking at adding taxes on to a per-ride thing to funnel that money to transit to help reduce the number of people shifting from transit into car-sharing. Can you expand on that a little bit? What do you see happening out there? If you want to help solve congestion, obviously, this must concern you that Lyft might be adding to it.
T. Burr: Absolutely, and thank you. That is a very live issue in my portfolio right now, dealing with the question at home.
I would say, just to begin, there are a number of factors right now that are good that are contributing to additional congestion in cities. One is that gas is cheaper than it has been traditionally. More folks tend to be employed in a lot of our larger cities. People are commuting to and from work. At home, our entire city is under construction, tremendously under construction. And there is a rise in other services, like delivery services, that are being utilized.
So there a number of factors. Certainly, we've seen some recent studies. My alma mater, UC Davis, had done one. I don't know that we necessarily believe all of the findings in that. But we're engaged in that conversation, because at our core is the question of how we fill up the empty seats in the car.
Our co-founders founded a company first named Zimride in 2007. They're self-described transit nerds, if I may say that. Their key motivation has always been…. If you look at the old 2007 material, it talks about how do we fill up the empty seats in the car, get cars off the road, reduce congestion.
We're doing everything we can on the technology side to address this. We have what's called a "venues tool." We'll work with our local municipality, our local transit agency. If there's a big event, like a concert coming up or a game or whatever it might be, we'll work with the transit agency to make sure that we are utilizing that tool so we can actually push pickups to a certain direction.
In that area I cited — the transit depot, where we have our number one pickup and drop-off location — I'll be honest. It used to be kind of a free-for-all. People would kind of ask for rides all over the place, and they'd expect that they could get picked up wherever. We utilized the technology in the app to actually push those pickups so they could only occur within a certain sector of the intersection. It frankly reduced contacts between drivers and passengers 25 percent. It really helped expedite those pickups and drop-offs.
S. Chandra Herbert: If I might interrupt, are there any regulations — as we have to consider what regulatory side on our side we would put forward — that you've seen that have been useful or that you might not like but the communities or the states have brought forward to try and push this?
T. Burr: I do not know of any regulations that have been passed. I know we are looking at and trying to understand if there are ways to incentivize higher-occupancy trips. You've heard of things out there like congestion pricing and those sorts of things. I think it's pretty early stages for a lot of those discussions.
I know we've been actively exploring those opportunities and what that might mean. We've seen that generally it works if it applies to all vehicles on the road. But we're hoping that there are incentives for programs like Lyft Line where we are encouraging folks to share rides. That is where I would focus.
S. Chandra Herbert: Just a final question. Do you work in any jurisdictions where they'd limit the number of licences — where they say: "You're welcome. Come on in, but we're going to give you X number of abilities to go out"? Or is it limitless?
T. Burr: We have had that discussion in every market I've worked in — probably about 12 different states and a number of cities. None have come down on, say, a cap, for a number of reasons. Just the transitory nature of how it works, it really doesn't make much sense.
We have seen markets that have tied fees to the amount of drivers that have been accepted. But as you may know, we have many folks who sign up to drive. They're interested in it. They understand the economic opportunity. They never give a ride. They might give one. So it's not quite as simple as saying, "Oh, there are 100 drivers," and that means there are 100 drivers on the road all the time.
We haven't seen any caps, but hopefully that helps. We've seen some tiered system only tied to licensing and fees.
R. Singh: What you mentioned — and we heard from other witnesses yesterday as well — most of the drivers, they use it as like part-time, casual work. Traditionally, what we have seen in the taxi industry is that it is like a full-time job for people on which they are able to manage their families.
With ride-sharing coming in, don't you think…? How will the economy work? It's creating more precarious part-time, casual jobs. It's good for people who just want extra money, but it is not the kind of job that I would like on which I can manage a family.
T. Burr: Absolutely. One of the numbers I cited was about 93 percent of folks currently on a Lyft platform either have work, are seeking work, are students or retired. We see overwhelmingly that folks are doing this to supplement their existing income. They might be doing it because they need to spend that money on primary expenses.
I don't have the stat here, but I think it's 57 or 60 percent spend the money they earn at Lyft on primary expenses — housing, child care and those sorts of issues. It's critical to their livelihood. Today's world is expensive.
Then you have other folks who tend to be driving more hours per week that are usually only doing it on a short-term basis because they might be between jobs or they might be trying to fund a venture that is their true passion. Maybe it's an artist or something like that.
The way I personally see it is everybody could use a little bit of extra money. I drove for Lyft for awhile. Passengers would find out I'm a lawyer and ask: "What are you doing? Why are you driving for Lyft?" I would explain to them: "You should see my student loan debt, and you'd understand."
So we see it as not taking away from those jobs that existing providers are offering. We truly believe that the pie is going to grow. Folks like myself are going to sell their cars. They're going to use public transit more. They're going to use existing industry more. That's where we see the world is going.
R. Kahlon: That would be nice. All those things would be nice. But I think that we heard yesterday…. You have the luxury of having heard all the questions yesterday, so I appreciate you're well prepared for the questions.
On the question of congestion. San Francisco was where it started, and now, years later, they're still looking at this thing, and they have a bigger problem than they think they did before. I suspect on that piece of the equation…. I'm sure the ride-sharing world or the TNC world succeeded in many other fashions, but on that question, I don't think that there's been a clear success. I think the challenges remain. You can provide a comment on that if you like.
My question is a further question to my esteemed colleague from Oak Bay–Gordon Head. It was raised yesterday. I raised it a couple of times, and the member for Surrey-Cloverdale raised it as well, around wheelchair-accessible cars.
I'm a little bit troubled with the word "explore." You said Lyft is exploring different options. But you don't have a solution. B.C. has done a fairly good job, historically, with every government that comes in. I just went through the Human Rights Commission consultation, and people said: "Guess what. We need more. We need more services. We need more training for people so they understand how to deal with people with disabilities."
So I'm a little bit concerned about just the explored piece. I haven't heard an answer yet from anyone. I'm hoping you can, maybe, elaborate on that.
Then the third piece is just a question on the program that you have to give donations to. I can't remember the name of the program. It's an interesting concept. The question on that was: do your drivers get tips? Can a person put a tip in? How is their tip affected by people giving that? So just a question on that.
T. Burr: Thank you for the questions. I'll start at the end. Round Up and Donate is the name of the program. It does not affect driver tips. Lyft was the first ride-sharing company, at least in the U.S., to offer tips to our drivers. It was pretty simple. The number one piece of feedback we were receiving from drivers and passengers was that they wanted to be able to tip and receive tips. I can't recall. I think it was some time in 2015 or 2016 that we made that change. It's hundreds of millions of dollars, at this point, paid out in tips to drivers, which we're excited about. The Round Up and Donate program does not affect the tip.
R. Kahlon: I guess my question was: have you considered how that affected the tips, when you have the round up? Have you seen any numbers to say that instead of giving a tip, a person does a round up? It's hard to round up. Usually when you give a tip, you round up, right? That's my question.
T. Burr: Speaking frankly, I see the amount that my ride is going to cost. This is in the back of my mind. I'm not thinking about it. It has personally not affected any tip I've ever given. It is an interesting question. I'd love to ask the team and find out and get back to you, but I don't know of any effect it's had on tips yet. I'd like to think the folks who are doing this program are also good tippers. We'll see.
On the accessibility issue, you're right. "Explore" is probably not the correct word. I do want to highlight that we have a full commitment to accessibility, and that is a number of programs that I may not have time to run through right now. It's everything from things we did early on, like provide voice-over capability within the app so folks with vision disabilities can utilize it.
We encourage drivers who have hearing disabilities on the platform. It happens fairly often. I receive a text after I request a ride with a notification saying, "Your driver might have a hearing disability or might have issues being able to communicate" — whatever it might be —" and you should be aware." Part of the program is expanding those opportunities.
We have a non-discrimination policy as well as driver education on how to handle anything from service animals to wheelchairs. Obviously, foldable wheelchairs are a part of our platform, part of the non-discrimination policy. You are required, as a driver, to provide transportation and service entering the vehicle and all those sorts of things.
It is that question of: how do you serve and how do you connect the wheelchair-accessible vehicles? Being a platform that relies on personal cars, we can't guarantee at this time how many WAV accessible vehicles might be on or that people have those. It is through partnerships. It's through pilots. It is a commitment, not just an exploration but a commitment, to solving the issue.
J. Johal: Thank you for your presentation today, Mr. Burr.
Just a few questions. One, does your company practise surge pricing, or do you know any jurisdiction that has capped surge pricing at all?
T. Burr: Our company does have flexible pricing called prime-time pricing. You heard a bit about it yesterday from a number of presenters. It functions in order to make sure that we have enough supply on the road to meet demand. The goal is to bring down the pricing for everybody and make sure it's back to the level set. If there is prime-time pricing, one benefit is that it does mean that those drivers who are in the most demand, driving at the most in-demand time, are making additional income because they are providing service at the highest demand, which is a positive. But the biggest net benefit, obviously, is making sure there are rides available.
I do not know of any jurisdictions that have capped it. Similar to the discussion on the number of capped cars, that is a discussion that has been had in many jurisdictions and explored. There's that word again. It has been looked at. I don't know any, off the top of my head, who have capped it.
J. Johal: What's prime-time pricing — 10 percent over, 20 percent, 15 percent? I'm just curious what that means.
T. Burr: Exactly. A ride typically is $10. But if I just left a Whitecaps game, it might start at 25 percent, so you add an additional $2.50 onto that. Then it's 50 percent. The vast, vast majority of any prime time — I think it's something like less than 3 percent — is in that 50 percent area.
Prime time is something that is a hot issue. It gets covered a lot in the press if there are unfortunate circumstances, which have occurred. But it's not in play as much as I think the press might play out.
J. Johal: You said 50 percent.
T. Burr: Fifty percent is a good example of how much it would be. A $10 ride at a time when demand is extremely high would cost me $15 instead.
J. Johal: I'm just curious. You hear so often from people saying: "Oh, we waited an hour for a cab." I'm just wondering what they would think if they had to pay 50 percent more, knowing they'd be paying 50 percent more. That's what I was asking. That would be Christmas party season, nightclubs shutting down, sporting events, all those types of things.
T. Burr: If I may, there's an interesting effect. Sometimes…. And this goes to congestion as well. When work is getting out, we might see demand, and folks decide to walk. Maybe for them, they don't want to spend that extra 50 percent or 100 percent, whatever it might be. There are interesting market forces that it does add to, but certainly, the goal is to make sure that that person, if they're willing to pay, can get a ride home.
J. Johal: Yesterday we heard from the community of Enderby in regards to needing and wanting ride-sharing because transit there is…. I think it operates once a week. How can you, as a company, incentivize drivers to help communities like Enderby, particularly? I think it's a community of 3,000 people.
T. Burr: Well, it was mentioned yesterday. One thing that we've explored is…. It becomes a marketing thing. How can we make sure that folks in those communities know that we're available, know that there's demand and just naturally grow that market? Like I mentioned, in small communities, it might only take two or three drivers to make a world of difference.
The way they utilize it is a driver might stay at home, be on their couch, working, watching TV and have the app on. Then they'll get pinged because one of their neighbours, someone in that community, needs a ride. That is the time that they decide to leave the house for the day. They'll give that ride, and then maybe they'll go run their errands or do whatever they might do and go about their day.
One thing that has been explored is those partnerships with cities. It doesn't take much of an incentive. It might be a discount code or a launch code to get folks to know about the program.
We launched South Dakota in October. By all accounts, South Dakota is not one of our larger markets and not one of the highest populated states. The demand has been exciting, just because there was a pent-up desire for these types of transportation options. Most of those small towns didn't have any existing industry before.
J. Johal: Did the state implement any sort of different legislation from, let's say, an urban area in South Dakota to a rural area in regards to helping you incentivize and getting these drivers out?
T. Burr: No. There were no incentives. That's a fantastic idea, but there was nothing that was separate to incentivize expansion into those rural communities.
J. Johal: Do you have different rules for smaller communities in regards to getting more drivers out, in regards to marketing, in regards to just…?
T. Burr: The good thing is that today rural marketing can be done through social media and different things. There are a lot of avenues to push the word out and let folks know that we're available. Certainly, part of the push that I showed, about launching in all of those different states, was to let folks know: "Hey, we're available in rural areas." This isn't just something you're going to get in Sioux Falls. You're going to get this in those smaller communities.
J. Johal: Thank you for answering. It's just that we always talk about it in the context of Vancouver, the Lower Mainland. We forget about communities like Enderby and some of the smaller ones. So thank you for your time.
B. Ma (Chair): Fantastic. We are out of time. Thank you so much for being here today.
T. Burr: Thank you very much.
B. Ma (Chair): Our next witness is the Insurance Bureau of Canada. Please come to the table. I'm guessing you know the drill by now. I'm going to set the timer on my iPad here, and you may proceed.
INSURANCE BUREAU OF CANADA
A. Sutherland: Thank you so much for having us today. My name is Aaron Sutherland. I think I know a few of you. I'm with the Insurance Bureau of Canada. Joining me today is Henry Blumenthal from belairdirect insurance. They provide optional auto insurance here in B.C.
Obaid Rahman is from Intact Insurance. In addition to providing optional auto insurance here in B.C., Intact is also Uber's insurer in Alberta, Ontario and Quebec. So any more detailed questions around how the product actually operates in those jurisdictions, Obaid can certainly discuss at length, following this presentation.
IBC — we are the national association of Canada's private home, business and auto insurers. Unlike B.C., in most other Canadian provinces, auto insurance is provided through the private sector, and the provincial governments provide regulatory oversight of those marketplaces.
Frankly, if we're measuring based on the premiums drivers pay, the compensation they receive when they go to make a claim or even customer satisfaction, the private sector is currently a much more successful and effective steward of the auto insurance systems than what currently exists in B.C. today.
Our presentation today will seek to address, really, the second question put forward by the committee, really exploring the regulatory regime that should be established here in B.C. to allow ride-hailing to operate. We believe that opening the insurance market to competition and allowing private insurers to bring the experience they have gained creating a fair and level insurance marketplace in other provinces is in the best interest of TNCs, the taxi industry and, ultimately, passengers in this province.
Just a quick word on terminology. This committee calls it ride-hailing industry. In our submission and in other provinces, we call it ride-sharing. The terms are essentially interchangeable. We refer to those companies that use an app to connect passengers and drivers as TNCs, or transportation network companies.
Quickly going through the experience as it relates to insurance that we've seen in other Canadian provinces, ride-hailing TNCs first entered the marketplace in 2014. With their arrival, Canada's insurers began working with those companies to identify their insurance needs, specific to the jurisdictions in which they were looking to operate, and creating solutions for them so that when they were ultimately approved for use, the insurance products would be there to provide financial protection for the companies, their drivers and their passengers.
Two products have essentially been created elsewhere in this country. A fleet product that the TNC — Uber, Lyft — can purchase to protect themselves, their passengers, their drivers and their vehicles. It's often called blanket coverage.
Single-operator driver coverage has also been created, which allows drivers to purchase additional insurance on top of what the TNC provides. We think that would be important, as different individuals, different drivers and different companies are going to have different appetites for risk, and products should be available in the marketplace to meet those needs.
In 2016, provincial governments began approving TNCs, notably in Ontario and Alberta. I'll just quickly mention the difference between how those two provinces approved their use, as it relates to the insurance framework, and some of the challenges we've seen in Ontario.
In Alberta, the government clearly defined TNC use and the insurance requirements in regulation. From an insurance perspective, the clarity that provided brought certainty to the claims process, with regards to which policy is in effect at which time — whether it's the personal policy or the TNC's blanket coverage.
In Ontario, conversely, they simply approved TNC operations and insurance products to go along with that. They didn't do it through legislation, and the ambiguity that created means it complicates the claims process when determining, in phase 1, whose coverage applies.
If you're a driver and you have an Uber app open and a Lyft app open, you haven't yet secured a ride and you get into an accident, whose fleet policy comes into effect? That is currently unclear in Ontario and could be greatly improved through a clear legislative framework that addresses that concern. It would also encourage product innovation in the marketplace.
The framework we've provided to you today and provided to the committee is really one that has been modeled successfully in Alberta and, we think, could be easily adapted here in British Columbia. Such a framework, as you can see on page 5, should clearly define when a vehicle is being used for TNC operations and when a vehicle is being used for personal use. The insurance products can then mirror these parameters.
The framework should prescribe the minimum insurance requirements for TNC vehicles that best assess their risk, likely with higher liability coverage than exists for personal use to account for the fact that they likely have an additional individual or two in the vehicle with them when they're driving.
The framework should require TNC operators themselves to share information with insurers to help determine which policy should respond when making a claim.
Finally, the framework should allow both the owner of the vehicle and the TNC operator, or a combination of both, to purchase the insurance product that best meets their needs.
This committee is debating the merits of opening the ride-hailing industry to competition and the benefits this could bring to users of taxis and other transportation services in this province. It is an important conversation. From personal experience, frankly, it's long overdue. Similarly, though, we believe we need to have a discussion about the merits of opening the auto insurance marketplace to competition as well.
B.C. drivers pay the highest insurance premiums in this country. What's worse is they actually receive less when they go to make a claim than provinces with competition. So value for dollar simply isn't there.
We need to begin asking ourselves if a competitive marketplace could better meet the needs of B.C. drivers, better serve the needs of B.C. drivers and do so in a way similar to most other Canadian provinces and virtually every other jurisdiction in North America.
Currently, ICBC is the monopoly provider of basic auto insurance. What's less well known is that they use their dominant market position to prevent private insurers from entering the optional marketplace, and as a result, they control over 90 percent of the optional market as well.
With regards to the ride-hailing industry specifically, we would recommend that the insurance market for that industry be open to competition and that drivers and operators be able to choose the insurance provider that is best for them. This would not only provide the industry with the innovative new products that best suit their needs, but they could also see significant savings that they could then pass on to their customers and passengers in this industry. This is true both for TNCs and the taxi industry more generally. It is, unfortunately, an option they are unable to access today.
The market should be opened and a framework established that allows auto insurance customers, regardless of who they are, to select the auto insurance product and provider that is best for them at the best possible price. Canada's insurers have a proven record of experience delivering a level and open playing field in other Canadian provinces, and they are keen to bring their experience to the B.C. marketplace. TNCs, the taxi industry and B.C. drivers generally deserve to be able to choose the auto insurance provider that works best for them.
That's essentially our presentation. That's our position. We think that is how you could best serve this marketplace, best facilitate a market entry in this area that is fair and doesn't disadvantage one group over the other.
I'm happy to take any questions you may have about that position or about the experience in other Canadian provinces.
B. Ma (Chair): Thank you so much. That was a quick presentation. We've got lots of time for questions.
A. Sutherland: I wanted to leave as much time for questions.
B. Ma (Chair): We will start with Dr. Weaver.
A. Weaver: Thank you. You will get absolutely no argument from me about the need to bring competition into the insurance marketplace here in British Columbia. It's outrageous — what's going on with ICBC. It's very timely, because this is actually the Select Standing Committee on Crown Corporations, of which ICBC is one.
I hope, when we think about this, we might reflect upon ICBC and, in fact, the inability for the consumer to actually have competitively priced third-party liabilities. I also feel that the taxi industry would benefit from competition in the marketplace. Rather than using dividends from ICBC to pay off other expenses in government, we should be letting the market determine what the price for insurance should be in British Columbia. So I completely support that push, and I will continue to try to do what I can.
With that said, there are other jurisdictions in Canada that have private insurance. Manitoba is one. How has ride-hailing, or has it, got going in jurisdictions anywhere with private insurance, and what happened in that case?
A. Sutherland: Unfortunately….
A. Weaver: Sorry. Public insurance.
A. Sutherland: Yeah. So Saskatchewan and Manitoba both have public auto insurance providers. There is typically a little bit more competition in those marketplaces than there is here in B.C. on the optional pieces. Unfortunately, Saskatchewan only just approved TNC for use, so we don't have the experience there in terms of what has happened. I'm not actually sure.
A. Weaver: But they must have approved some kind of insurance framework as part of the approval process to allow TNCs to operate.
A. Sutherland: They would have. Unfortunately, I don't have a lot of information on specifically what that framework looks like in Saskatchewan, but I can certainly get that and get back to the committee on that.
A. Weaver: My final question on this. If competition was opened up, there would be a sufficient number of competitive bidders to actually provide TNC companies with insurance in British Columbia?
A. Sutherland: I've got two here with me.
A. Weaver: That's what I wanted to hear.
H. Blumenthal: Let me field that question.
Coming from belairdirect, ironically, I have to tell you a bit of our company history. We started in Quebec over 60 years ago.
Belair actually comes from Chevrolet Bel Air, which is the car that was used by the cab industry in Quebec. They had issues finding proper coverage for their members. They created their own company, which became Belair and part of, now, belairdirect. We're actually here to provide Canadians with the proper coverage. So either it's the cab industry or the TNC groups, Uber, a different organization. This is our role. Clearly, we have products and we have services to have an open competition process.
In Quebec, currently, we do cover a fair amount of cab drivers. We do cover individual ride-sharing drivers as well. That's our mission. There's absolutely room for price competition, service competition.
The convenience of a distribution channel is very important as well, where people don't need to go out and sign 50 or 35 pages. All they need to do is call us, go on line, etc. That's the way products are being distributed now in Canada.
O. Rahman: Just to add to that point, I think Ontario is probably the best example of this. There are, I would say, probably about five ride-sharing companies which exist in Ontario today, and they're insured by different insurers. Intact, the company I'm with, insures Uber, but some of our main competitors insure Lyft — the gentleman who was here before — and we've got some smaller local ride-sharing companies which exist.
We've definitely seen that in the private market. There are a lot of companies that have come up. People have tried different product structures. I think the one there's consensus being built around is sort of a blanket coverage, because it essentially guarantees that there's insurance all the time. But there are insurers who also put individual products out there. I would say that there's a variety of stuff available, and TNCs can basically pick whichever one suits the business model or how they want to run it.
A. Weaver: Thank you very much. I think we'd all be best served if we moved away from the Crown corporation that exists, ICBC, here in British Columbia and allowed competition in the marketplace.
A. Sutherland: If I could just briefly touch on…. You mentioned fairness. Fairness is obviously an important factor when making decisions of this nature. When you look at the taxi industry and the TNC industry in other Canadian provinces, time of use and usage-based insurance is open to both of those. It really helps create, from an insurance perspective, a level playing field. Again, we think that could greatly serve the B.C. marketplace as well.
P. Milobar: That actually just answered my question. I was going to ask if taxis and TNCs have to be treated differently or if there are options there for people to make their own choice as to insurance that best suits their use. At the end of the day, it's still a car that's taking a passenger for a fare.
A. Sutherland: Exactly. That's one reason our framework suggests liability coverage that's higher than what you would have on your personal vehicle. Essentially, our framework suggests mirroring what exists for the taxi industry itself.
In terms of the products available, do you guys want to add to anything? Or is it fairly simple to say…?
O. Rahman: No. Look, I think from an insurance company standpoint, we don't really discriminate between whether you're ride-sharing, whether you're a taxi and so on. We're going to make a product based on what the consumer, our insured, our customer, is looking for. We've created usage-based products for the ride-sharing industry. We've done that also, in certain instances, with the taxi industry.
There are a bunch of factors which come into play. I mean, when we get into a usage-based product, some of it comes down to what type of data feed we get, because to have a usage-based product, you need to have fairly accurate data. So there's a technology component to it.
As long as all of the ingredients are in place, as an insurance company or even as an insurance industry, I would say, we would not hold back from creating a product based on who it is. It's going to be whatever sort of suits what our customer is looking for.
P. Milobar: Essentially, if a taxi chose to invest in the proper technology, in other jurisdictions, there's not that impediment to access the same style of insurance if they choose to, if it works better for them that way than just the regular insurance that they currently have.
O. Rahman: Absolutely.
R. Kahlon: We were just having a brief conversation about the same thing. But I'll disagree with my colleague — esteemed colleague, did I say last time?
A. Weaver: Very esteemed.
R. Kahlon: You're going down. Now you're just a colleague.
On the ICBC question…. But we won't go into that debate.
A. Weaver: NDP doesn't like competition.
R. Kahlon: Yeah. That's right. I've only spent my life in competition.
I guess I'm a little bit disappointed, because there's only one jurisdiction in Canada that has…. It's kind of apples and apples. That's Manitoba.
I was hoping that you'd have some information about what they're doing and what, perhaps, they're not doing that you think B.C. should consider, other than just open it up to the private sector. I'm hoping that, at a later point, you can perhaps send us something, if that's possible, because it is the only jurisdiction that has this kind of insurance that B.C. does. I think the question that Dr. Weaver asked was going down the line. I'm hoping that you can address that piece at a later point.
A. Sutherland: I can commit to that today. The challenge will be that if it's run by MPI, they are a public insurer, and they make it…. Typically, when you create an insurance product for a TNC, it's a…. Confidential isn't the right word, but it's essentially a proprietary document. They may not publish that publicly. So we may be limited in terms of what we're available to understand.
O. Rahman: Maybe I can just jump in for a second on Manitoba.
I think, given that it is a public province, that's not where…. Being Uber's sort of insurer, we're not involved in that province. But from what I've read, they've gone down the path of "every driver can go and buy an individual policy." This is something which we've honestly considered in every jurisdiction, right? It's been an option in every jurisdiction.
The main reason…. And it's not just Intact and Uber who have stayed away from it. Almost every competitor we see of ours insuring other ride-sharing companies has stayed away from that option. The biggest deficiency in that option is the logistics of trying to manage that between regulators, insurers and TNCs.
If I just paint an example, we would be sitting here saying that to get a licence to operate to carry paying passengers, you need to have a certain amount of insurance, right? We've talked about some minimum insurance requirements, which means that the licensing bureau and the TNC need to ensure that this individual driver has this much insurance.
Unlike other public transportation, you've got a lot of instances where drivers come in, drop out, come in, drop out. For a TNC and the licensing bureau to constantly know what type or level of insurance they've got, they would need to have direct access to every insurers' data, to say, "You need to tell me when this guy, let's say, drops his insurance or rebuys it," and so on. Just to manage that logistically is a nightmare.
The simpler approach, which every jurisdiction sort of moved towards, is to say if you've got a blanket policy, you hold the TNC accountable for making sure everyone is insured, every ride is insured. And because they have the option to buy a blanket policy, which guarantees that everyone has the same level of coverage when they're driving for the TNC, when a passenger is in the car, you get out of that logistical nightmare, and you ensure that from a public safety point, you've always got that minimum required coverage, which is out there.
Even though I think Manitoba might be flirting with the issue of going down the individual path, this debate has happened in Ontario. It's happened in Quebec. In Quebec, some of the bodily injury coverage is covered by the government there. So not exactly a public province, but let's say semi along the way.
Debates happened in Alberta, and almost everywhere the industry insurers, TNCs, have gravitated towards "let's go towards the blanket coverage."
R. Kahlon: I guess where I'm kind of going — what I'm hearing from you — is that the only way you think…. Obviously, you're advocating for privatizing the insurance part. I get that. But you're saying that you don't see how it could work in Manitoba. You're saying that the system that you're seeing Manitoba put together has got way too many challenges for it to work.
O. Rahman: I think part of it is…. Without biasing this argument, Manitoba also is a much smaller-sized jurisdiction relative to a Vancouver, B.C. I think your right point of comparison is probably looking at other big cities like a Toronto, or a Montreal or Calgary because I think the scale might make a difference. Maybe they can pull it off on a…. You know, with not dealing with 50,000 drivers or whatever that number might be depending on. But when you reach a certain scale, the logistics of this become extremely complex.
R. Kahlon: I appreciate that. Any information later would be great.
A Voice: Yes, absolutely.
B. Ma (Chair): I've got myself on the list now.
You're in the unique position to actually be able to tell us about some of the safety concerns or some of the claims that we typically see from ride-hailing companies, or even the taxi industry. I am interested in knowing: are there types of claims that are more common amongst ride-hailing companies, including taxis, and are there differences between the types of claims that you see between ride-hailing?
Well, let's start with one question. Are there differences between the types of claims you tend to see between app-based ride-hailing companies and taxi companies — or drivers, cars, vehicles?
O. Rahman: I think if we break the claims piece down — that is, what we call the frequency of claims — are we seeing more claims between two categories? For us, right now, it's still too early to tell if there's a trend there, whether it's different or not.
In terms of the types of claims coming in, what you would see with passenger transportation, relative to any other — a personal vehicle, for example — would be that you would have that added claim of a passenger getting injured in a car.
Now, depending on the province you're in, how this is dealt with is very different. If you're in the province of Ontario or Quebec, a lot of this personal injury that someone can suffer in a car is what we call almost a no-fault coverage. In the case of Quebec, you go to the government of Quebec. In the case of Ontario, you might actually go to your own personal policy. In Alberta, it's completely different; you can sue the driver involved in that.
But those would be, I would say, the additional claims which we would see in passenger transportation, and it's not specific to whether it's a taxi or ride-sharing. We would see that even if we're talking about a public bus or any sort of transportation where you've got passengers.
B. Ma (Chair): What about the behaviour of the vehicles? Does that influence the types of claims that you see? For instance, taxis would probably fall into this category as well, but ride-hailing companies go up to the curb a lot. Maybe they're blocking cycling paths. Maybe they're coming in and out a little bit more.
Do you see more…? Do we have to worry about more pedestrian claims, cycling injuries? Have you noticed those sorts of trends at all in either industry?
O. Rahman: I would say that, at this point, we haven't seen the magnitude of anything on this which we would consider material.
H. Blumenthal: The same for us at Belair. We haven't seen significant differences between the two groups — the Uber drivers and the taxi drivers. We do claims for both groups, and we haven't seen anything very alarming whatsoever at this point.
We've been in that business for over 60 years now. It's a matter of risk, how we assess the risk, depending on the frequency, the usage and all of this. They're very comparable, actually. We haven't seen any trends.
B. Ma (Chair): Are there trends between ride-hailing companies and non-ride-hailing companies, aside from passenger injuries? Like, for instance, more cyclists being doored or…? I'm just trying to understand sort of what you might see.
O. Rahman: Honestly, no, not from a cyclist or pedestrian standpoint. We haven't seen anything sort of different from what we would normally expect in auto insurance. From a pure frequency of claims, it's consistent with what we would expect, given the mileage on the road and things of that nature. Nothing we've seen which raises alarms to say: "Well, this is very different from how any other automobile operates."
B. Ma (Chair): Are there any other questions?
It looks like you are free to go. Thank you so much.
Our next expert witness is the Victoria Transport Policy Institute. We'll begin in a couple of minutes.
All right. We are going to get started now.
Our next presenter is from the Victoria Transport Policy Institute. I will allow you to introduce yourself. You'll have 15 minutes on the clock. Whatever remains of that 15 minutes will roll over into the Q-and-A period. There will be 15 minutes for Q and A as well. I think that there's a fun little tune that comes up at the end of this.
VICTORIA TRANSPORT POLICY INSTITUTE
R. Campbell: Fantastic. I can actually see that.
Good morning, Chair Ma and committee members. Thank you for the opportunity to present to you this morning.
As an explanation, I'm also executive director of the British Columbia Cycling Coalition. We had been working on various issues related to ride-hailing, and I contacted Todd Litman of the Victoria Transport Policy Institute last week regarding them. He mentioned that he wasn't able to appear and present to you today. So he said that it was fine if I would represent the Victoria Transport Policy Institute.
Todd has reviewed the paper that I presented to you. He broadly said it covered a lot of the issues and concerns and potential solutions regarding ride-hailing. Quite frankly, in going through this for the British Columbia Cycling Coalition, we realized there was a broad range of issues and potential solutions, not only for cycling but more broadly. A lot of the potential solutions, while improving cycling, would be good for the system and transportation in general. Also, this gives me the opportunity to start at a broader level and a more holistic approach.
I think, broadly, communities and the province have some very ambitious and worthwhile goals regarding transportation, building healthier communities and safety. Ride-hailing and other transportation options really need to work towards providing those kinds of solutions. If they don't, they make our task in any number of areas all the more difficult.
I think the good news is there seems to be a lot of agreement on what the longer-range future is. A lot of the people involved in ride-hailing…. Their vision of the future is automated vehicles on the streets. Some paint an image that's very close to what ours would be and what a lot of communities have. You'd have a street with more space for people, better sidewalks, protected bike lanes, perhaps a transit lane and then pickup and drop-off zones that you would need to enable people to safely get out of automated ride-sharing vehicles as well as transit. Also, as we're seeing, there are more and more deliveries of goods, and of course, there's competition for the curb space for all of those.
That's certainly the long-range vision. I think that's fantastic. I guess the question is: how do we get there, and how do we get there safely? The province has an excellent safety strategy. The B.C. road safety strategy is quite excellent. If it was fully implemented, we would, quite frankly, see a huge reduction in crashes, injuries and fatalities. The long-range goal of zero fatalities and serious injuries is certainly commendable. Again, the question is: how do we get there?
With respect to ride-hailing, there is evidence that it does increase the number of vehicles on the road and, specifically, the vehicle miles travelled. That is a challenge from any number of points of view — from greenhouse gas emissions to safety. The B.C. road safety strategy indicates that one of the key measures to improve road safety is to provide people with sustainable transportation choices — cycling, walking, public transit — and also designing our communities in ways so that people don't have to drive as much.
I guess the big question is: how can we make sure that what we do around ride-hailing moves us all forward in the direction that we know we want to go? The road safety strategy generally divides up by…. There are four categories that broadly encapsulate a lot of the measures. One is safer road users. Safer roadways. Safer speeds. What was that fourth one? I'll think of that and get back to it later. Oh, safer vehicles. I knew I would figure that one out. Broadly, the measures I will discuss here will be broadly based in those four categories.
I'll start off with the safer roads. What we've seen is one of the big challenges in some of the cities — like San Francisco, for example. I've also heard of challenges in other cities, like Toronto. It's the challenge…. It's not just reserved to ride-hailing vehicles, but I think that with the sheer number of vehicles and the incremental number of vehicles, it makes it a real problem. With the vehicles blocking bike lanes, crossing bike lanes, it tends to be a real problem.
They've actually had human-chain protests where they'll get a line of people along the roadway ensuring that the cyclists have safe passage along there. It makes a point, but it also says that we'd really rather not be in that position here. The extent that we can figure out how we can address some of these solutions before we allow ride-hailing and make sure that there are efficient solutions to address those issues as they come up is critically important.
A key part of that is getting resources. Local governments, as I presume you all know, are tapped for resources. I think one option that seriously needs to be considered is a tax or fee on ride-hailing, which, among other things, can help us transform our streets to what we want in the long term and then provide efficient places for drivers to safely pick up and drop off passengers, both for the passengers' safety, their safety and also for the safety of a cyclist on the road.
Obviously, it takes a huge amount of effort to transform whole streets, but just starting off, there are areas where we know people are going to pick up and we know there are going to be bike lanes, so let's start off with that. Let's get a few of these down before we have the system introduced and then put the mechanisms in — so there are resources, so there is city staff time, so there's a set of policies from the province so that every municipality doesn't have to roll their own every time on every street that's being blocked.
Currently in San Francisco, Uber and Lyft, I believe, have reached agreement with the city to create some stopping zones along, I believe, Valencia, one of the streets where there's a problem. So that's a step in the right direction. I think one of the challenges, though, is that there are always trade-offs, with street space being precious. Obviously, people care about parking. There will often be some parking removed.
This kind of process takes time to do it right, to go out and consult with the businesses and the residents. Maybe they'll be very excited about having drop-offand pickup zones in front of their businesses or where they live. They may or they may not. But it does take time to do that, so let's make sure we do that right.
To move on from there to the safer vehicles. Now, currently taxis are typically pretty small vehicles. A lot of them are hybrid so they are pretty environmentally and fuel-efficient. The concern with ride-hailing is: would we allow bigger vehicles, like full-sized SUVs and full-sized vans to do that?
There are several problems with these types of vehicles. One, as far as serious injuries to pedestrians, they're about three times as likely to create that, because they have the big hoods more likely to impact people in the vital organs. They tend to knock people down on the ground, and they would get run over afterwards. So I would hope those kinds of vehicles would not be allowed or at least there would be a higher cost to using those.
Similarly, they also take up more space, which means they would need longer loading zones, and they would also need wider loading zones. So if we can make sure we have small vehicles, it just makes everything easier.
Also, the longer the vehicle the more congestion that it will create on the street. These things are very GHG-intensive as well. They're also more costly to run, so for the drivers out there who are not particularly making a lot of money, it would also be more affordable.
I think, also, consider looking at other types of small vehicles. There are low-speed electric vehicles, essentially golf cart–type things. Perhaps those should be allowed for ride-sharing in some circumstances. The key there, though, is creating the 40-kilometre-per-hour zone so they can actually safely operate as required by the province. There again, it's a smaller, more affordable vehicle that will have less impact on other people in the city.
To move on to the safe road users. You know, drivers do a get a bad rap. Certainly, there are a lot of people that are good drivers, but there are a lot that aren't. Anything that we can do to require that somebody has to be a really good driver to be able to use ride-hailing helps create a reward for good driving. These people will be doing more kilometres out on the road, so if they're really safe drivers, there would be a huge benefit to that.
I think we want people with a very good driving record, few or no infractions, especially ones that are really dangerous like excessive speeding, running red lights or distracted or drunk driving. Perhaps those people should not be allowed to use ride-hailing. Similarly, if somebody is doing this, maybe they should lose their ability to ride-hail.
This creates the advantage for the drivers too. They're going to be driving around more. If you get in a crash, there's a huge economic cost. Your insurance might go up. You might be injured, so spending time in a hospital. If somebody's not a particularly good driver, there's really no point in actually allowing them to do this, even from their personal point of view. And generally, with the challenges we're facing with insurance costs and crashes, certainly making sure people are great drivers and the vehicles are safe, there's a huge benefit in doing that.
Similarly, safer vehicles. There are tandem bicycles or pedicabs. Ensuring those kinds of vehicles can be used for ride-hailing, I think, would be an excellent idea.
Further, I think we obviously need some good regulations. Right now it's hard to enforce driving in or stopping in a bike lane. We need some upgrades to the Motor Vehicle Act to ensure there can be fines for that, and that can be enforced. Similarly, dooring, where somebody opens their door in front of somebody cycling, is a big problem. If, in advance of this, we could increase the fine for that and have some education around that, that would be a great idea.
Also, I mentioned the lower speed zones. Municipalities have been asking for over a decade for power from the provincial government to create these zones for safety reasons. Again, allowing the lower vehicles to be used for ride-hailing would be another advantage of doing that.
I think intentionally going with a good plan, making sure it reaches our goals as a community from safety as a transportation…. I think there's a huge value to that, and it creates B.C. as a leader in doing ride-hailing right. It also sets us up for the future, which a lot of people think will be automated vehicles, which have the potential to create healthier communities. But we need to go in there with, certainly, a culture of safety and encouraging ride-hailing to really take that on.
To see how they can fit in and promote the culture of safety would be really important, because once you get to automated vehicles, it will be the companies operating those that are responsible for the safety. The more that we can make sure they do that now and they're really serious about cutting down on crashes, cutting down on the serious injuries, is really important.
Another option would be, perhaps, if a driver is operating a ride-hailing vehicle, and they get in a crash, there's a fine or something like that for the ride-hailing company. It would create a strong financial incentive to make sure that their policies are safe, that they bring in safe drivers and they really work hard on making sure our roads are much safer than they are and get us closer to that goal of zero fatalities and zero serious injuries.
I think those are my main points. Certainly, I would welcome questions.
B. Ma (Chair): All right, fantastic. Let's start with questions.
S. Chandra Herbert: Thank you, Mr. Campbell, for this.
I appreciate your bringing a perspective which we haven't heard yet, and a community, in a sense, of cyclists, of pedestrians, that we may not be considering but need to.
I'm curious. One of the citations in your report hasn't seemed to come through — regarding, I think it was, around how many trips would have been taken by bus, walking or cycling but were instead taken because of ride-sharing. The citation isn't there, but if it's possible to send that on to me, that would be great, because I'd be interested in the study.
R. Campbell: I believe that might have been the first one, the UC, Davis, report. If not, I'll make sure that citation is there.
S. Chandra Herbert: Okay. That would be great.
In terms of the question around updates to the Motor Vehicle Act and the requirement that we need drop-off locations, pickup locations, before we do ride-hailing. As you know, that would take a long time, I would imagine, to create one or many in every community in the province before we could proceed. However, I think it is worth consideration.
If you are able to get any more information on what they've done in San Francisco…. Valencia is one street, one bikeway. Obviously, they'd need to do a lot more than that to make it acceptable. Certainly, taxi stands are really useful, we know. Do you have any thoughts on what a tax would be, where it would go, what it would have the best use for if there were going to be a tax on ride-hailing, in a sense, to help fund transit and cycling improvements and to reduce congestion?
I think the concern that I've got is that if we were to do this…. Sixty percent of my constituents walk, bike or take the bus to get to work. Ride-hailing could seem to be an attractive proposition to get around downtown if it's just free for all, but if we were able to make transportation improvements so that we didn't lose the share that we have currently and didn't increase congestion, that would be a good thing. Really, what would be the priorities for where this kind of fund should go should there be such a tax?
R. Campbell: I would say that the priority would be, first out, to fix any of the challenges or problems that are actually created by ride-hailing, and also the ones needed to help make ride-hailing safe, convenient and more affordable.
I guess I didn't mention this, but obviously, if there are regulations and enforcement around no-stopping zones, that's fantastic and that's needed. But if there are not viable alternatives for the drivers, that ends up just being a cost of doing business and takes away what little money they do get for ride-hailing. So I think there's a benefit for that. It also creates some certainty regarding the passengers — where they can be picked up and dropped off. I think it's good to have that from the beginning of the system, rather than to start it off as a free-for-all and then have to introduce this later on. Then people are: "Oh, I used to be able to drop off there. Now I can only drop off here."
I think some should be created, especially in places where we know that there are going to be challenges, like in downtown areas where it already is a bit of a free-for-all. These drop-off zones could be a benefit for taxis and also people in the delivery business. The paper was focused on ride-hailing, but certainly, there are the same challenges and opportunities with anything, basically, that uses the curb. So I think it would be important to at least pilot some of this and get this in place and make sure we have the mechanism to resolve this as it goes along.
I suppose the other thing I should have mentioned — and I intended to mention it — from the beginning is that a lot of the research and a lot of my comments here are focused on more urban areas or even small towns. Ride-hailing in rural areas, or ride-sharing, is certainly an opportunity that needs to be explored in and of itself. There are probably opportunities and challenges around there, especially in communities where distances are long and there is little or no transit service. Unfortunately, I wasn't able to address that here, because there's not much available on it. I'll say that my comments are limited to that.
But certainly, kind of getting the ball rolling and getting that mechanism in place would be important. I think also, maybe, where some of the revenues could go is to transit services. A lot of jurisdictions have experienced a drop in revenue, and as we know here, money for transit is particularly hard to come by. Transit service is affordable and can be used by everyone for a lot of trips.
The experience with ride-hailing, from what I've seen, is it tends to be people with more income that use it more frequently. Folks with less income don't tend to use it as much. I think it's important to make sure that we don't have that negative impact on transit.
And if there is loss of revenue, we don't want it to cut back on essential bus service or…. I mean, quite frankly, there's money from TransLink for cycling too. We wouldn't want that to cut into the money available for cycling.
And then, obviously, ride-hailing can help in some ways. I think the evidence is that for commuter stations, there is some benefit and some increase, while with other services, like bus in some of the inner cities, there's a negative impact. So to make sure we craft some smart regulations to make sure we maximize the benefits while minimizing the cost to everyone is, I think, a good idea.
S. Chandra Herbert: Finally, just thank you for your suggestion to update the Motor Vehicle Act. I think it's well past time to do that.
I've been doored. So thank you for acknowledging dooring is an issue. But it's for all vehicles owners, obviously, not just ride-hail or taxi or what have you. It's 81 bucks to door somebody — not even worth putting forward a complaint. It's ridiculous.
R. Campbell: It's also for the safety of the passengers too. You open your door in front of something, and it might not be a bike. It could be a dump truck. So it's important to get people in the habit of looking before opening their doors.
Also, while bikes are less likely to hurt people if they're hit by them, it can be a serious injury, especially for older folks — somebody getting hit by a bike. So again, having the safe loading zones really helps create that. Just make sure that, for both the passengers and the drivers in the vehicles, there's a strong emphasis on education around looking, or even stickers in the vehicles, or whatever.
There are various solutions to these. I think having them baked in from the beginning of ride-hailing is an excellent idea.
B. Ma (Chair): Mr. Campbell, just a heads-up that we've actually got a few more questioners after Mr. Chandra Herbert. So slightly shorter answers so that we can get more in.
R. Campbell: Sorry. Okay.
S. Chandra Herbert: The final question. What have you heard about a willingness in the Ministry of Transportation so far to open up the Motor Vehicle Act for changes?
R. Campbell: Well, they certainly understand that's important to do. The main challenge is it's a huge endeavour. I've heard somewhere in the number of several million dollars to do it, to open up the whole thing.
There's perhaps a chance, as part of the ride-hailing regulations, to get a few key ones in — the dooring, not driving or stopping in bike lanes. Maybe a safer passing law. One of the challenges…. If you're going along the road and people pass you too closely, you tend to be, "Oh, the place next to the door looks like a much nicer place to be," when it's really not, necessarily.
A. Weaver: I'll be quick. Thanks for the presentation. I like the way you were thinking way into the future about how we should go. In fact, frankly, to be blunt, we should be having a discussion here about autonomous vehicle regulation. We shouldn't be talking about ride-sharing, which should have been here five years ago. We already are trying to catch up to where the rest of the world is.
My question to you, though. There are two sides to the cycling issue. We often hear cycling advocates talking about the importance of protecting cyclists, but there are also cases where cyclists are their own worst enemy, and that they do not actually, in some sense, police themselves.
I'll take the Victoria example, which is very, very controversial right now — the bike lanes in Victoria, where you and I are from. The city has spent a lot of money with bike lanes, and I think that’s a great advance. But people don't use them. So they're going up and down Pandora, not in the bike lanes, but the other streets, causing anger within the community of those people who take public transit or who are driving.
So to what extent can you couple advocacy for more cycling infrastructure — safer roads for cycling — with advocacy for actually ensuring cyclists abide by the same laws — transit laws, etc. — that we require drivers to do?
You lead to deep and profound cynicism within elements of the population about the importance of cyclists. I hear it as an MLA, front line, all the time. I shouldn't have to be in a position where I'm defending…. There needs to be some self-policing and self-advocacy within the community as well.
Do you have any comments on that?
R. Campbell: Well, yeah. Certainly, that's important, and education of all road users is critical. We do publish our Bike Sense manual, which contains both the rules of the road and tips for cycling safety. We could use a lot more resources to get that out there on a broader basis.
I think one of the key things, though, for all road users is making sure there's a clear, safe space to use. That just makes things a lot simpler. You'll see along the protected bike lanes in Vancouver, for example, that people are typically really well behaved — both the drivers and the motorists, actually — when they know there's a place.
As far as obeying the rules of the road, the studies have basically shown that all road users are typically the same. I mean, different road users will probably break different rules. The key is, and I go back to the ride-hailing, making sure the drivers have a safe, legal, convenient place to drop off is critical for making sure those folks obey the rules.
Similarly for bikes, one of the challenges is sidewalk cycling. But the flip side of that is if you try cycling on a busy road with no bike lanes, most drivers are pretty good, but there will be people who will either accidentally pass you too closely or purposely pass you too closely, harass or honk. That's a behaviour that's arguably not nice. A lot of times it's not even legal.
If we get the roads…. We found this on Hornby Street, for example. Sidewalk cycling went down by about 80 percent following the introduction of the protected bike lanes.
A. Weaver: Just to finish, on Pandora in Victoria, which you're aware of, it's on the wrong side of the street — the cycling lanes. Major money invested putting a cycling lane in so that people, bus drivers, have to let their passengers out to walk — and taxi, and ride-hailing — right across a bike lane. It's ridiculous. I don't know how that happened. But in fact, it has led to a lot of complaints to me, because it's on the wrong side of the street.
My question, then, is: will you advocate and will you continue to advocate for policing services to also enforce our traffic laws on bicyclists to the same extent that they do on traffic? I think it's critical, because if you want to bring public support with you, we have to crack down on those people who are cycling in manners that are dangerous for the public as well.
R. Campbell: Yeah, and I can see the point about enforcement, generally prioritizing it as the risks to other road users and in meeting our goal of zero fatalities. That's how we're going to reach our goal of zero fatalities and zero serious injuries, which is good.
I think either education or better design can also help out with some of those times where the behaviour of people cycling is a challenge, and certainly we would want that.
One of the challenges is when you're new at something like the protected bike lanes, the first time, it's a learning process for the professionals and everyone else involved. Either a better design of the bus stop or designing it differently on a different side of the street could be a better option for ones in the future.
B. Ma (Chair): Mr. Johal.
J. Johal: My question on taxation was answered.
B. Ma (Chair): All right, fantastic.
Any other questions from the committee? There are none.
Thank you so much.
R. Campbell: Great. Well thank you very much.
B. Ma (Chair): Up next is Monark Group at 10:35. I'm going to call a three-minute recess. We're just a couple of minutes early, so we'll be in recess for three minutes.
The committee recessed from 10:33 a.m. to 10:37 a.m.
[B. Ma in the chair.]
B. Ma (Chair): We have our next witness from the Monark Group.
I think you probably know the drill by now. I'm going to set a 15-minute timer. I'm going to turn it around so you can see it. Afterwards, there's a 15-minute opportunity for questions. Any time you don't use for your presentation, we will just roll into the questions.
Just give me one second here. I'm going to start the timer. You may begin.
M. Sikka: Good morning, my name is Monty Sikka. I'm the president of a B.C. e-commerce company that I founded 16 years ago. We're a successful, diversified company which, a few years ago, developed a ride-sharing app known as Kater.
Like a lot of British Columbians, I've watched the ongoing bitterness, mistrust and allegations between the taxi and the ride-sharing industries, and I've been wondering whether anyone actually cares for the consumer who desperately requires a safe, affordable and prompt transportation option.
About six months ago, I chose to reach out to the taxi industry to see whether we could bridge the gap between our sectors. Myself and our technical team have quietly met representatives of the taxi industry, listened to their concerns and tried to craft a solution.
It hasn't been easy, but we've managed to establish a relationship of trust and accommodation, and we've managed to come up with a made-in-B.C. solution. We have shared that solution with Dan Hara, who's preparing a report to the government. Today we would like to share our solution with you.
Before I present, I would like to introduce my colleague, and then we can get into the presentation.
K. Parikh: Hello, my name is Kush Parikh. I'm the former president and CEO of PayByPhone, most recently, which was sold to Volkswagen Financial Services last December — specifically, their mobility group. I have over a decade of experience in general mobility, traffic information, car-sharing, ride-sharing, parking, etc. Thank you for having me here today.
M. Sikka: As we met the taxi industry, we realized that we needed to address five key objectives.
The geofencing has been a massive issue. Again, communicating with both sides, we've been able to come up with, I think, a compromise and a collaborative solution that would work, where the geofencing issues lift if the demand increases. If there's a cab required and there's no Vancouver taxi available in Vancouver within five minutes, a Richmond taxi, perhaps, who's dropping somebody off can pick up that ride. I think it was a great achievement and shows the collaboration we've had with the taxi industry.
On the operations centre, again, through the dialogue with the taxi, we were able to figure out that it's important still for a dispatch to play a role. Seniors would like to call in and be able to book a ride, which will be available. Accessible vehicles, again, would probably require some kind of communication which is not app-based. And some people just don't like to use apps, so that facility will also be available in this one-app solution.
Security has been fairly paramount. It's obvious that is what British Columbians want, government wants and the consumer wants. We will go into a little bit more detail on all the security features that we will have for all the drivers that will be operating in the system.
In terms of transactions. For consumers, cashless transaction is obviously the way of the future, which will be available. But again, listening to industry, cash is still a component that consumers want to use, and we will certainly have that option available for consumers if required.
In the future, again, if this innovative technology, made in B.C., is given a chance, there are other phases and collaboration that can be done — perhaps with TransLink — to expand the app, also working with other car-sharing services that are already available in British Columbia.
K. Parikh: Just to emphasize some of Monty's points on the previous slide. The example around geofencing was a taxi-specific example, but actually, the service that we're offering is ride-sharing, of which taxi is a component — just to make that specific point clear.
Secondly, I think it's really important…. I've been listening earlier today to some of the dialogue. There's a lot of talk around servicing disabled and those types of things. We're taking an approach to servicing all citizens. When I say that, that means folks that do want to pay with cash or folks that don't know how to use a mobile app and can maybe dial in or maybe even walk into a store and figure out a way to get transportation.
We are thinking more expansively than more of the classic "come in with an app, transact seamlessly, and move on," which is a little bit more of a millennial way of moving forward. I think that's really important, when you think about the entire citizenship, including disabled — but folks that may not be as tech savvy.
M. Sikka: The next slide just showcases a little bit of experience, our team strength. We've got over 16 years of experience in e-commerce — a B.C.-based, Surrey-based company. On the Kater side, we've got 20-plus developers that are currently employed and developing the app. We've got really good partnerships that we've set up already with the B.C. restaurant federation and the Canucks.
I just want to go through the solution and go through what the app would look like from a consumer perspective. We have a follow-up video that will show you how the app will actually work.
If you take a look at the first phone, it shows you where…. It's not very clear, but the blue dot is where the passenger is starting out, and the green is where they're trying to go to. Once they put the destination in place, all options appear on that screen. The yellow is the taxi. The blue is the ride-share. The red can be a luxury ride-share. Then we would also like to have a component of electric, if that's available.
The next telephone shows if the passenger picks…. I'm sorry. It's not very clear on there, but I think in your package you can take a look at it. It shows that if the taxi is the choice of the consumer, how far the taxi is and how much it's going to cost; similarly, if the passenger's looking for an accessible vehicle, what the cost would be and so on and so forth — if it's a ride-share and a luxury or an electric car.
It gives the customer a whole bunch of choices within the one-app solution.
K. Parikh: If you look closely on the pricing related to the taxi and the ride-share, you should see that the pricing is effectively the same — which is good, because we don't want to create a combative environment between the different ride-sharing constituents.
M. Sikka: This is a demo which will show you just what we articulated through a static, in a video format.
K. Parikh: This is just showing what Monty just walked through. Just to give you a voice-over of this, what we're really showing here is simplicity and a consumer focus.
If you think about my recent experience at PayByPhone, one of the things that we did was really focus on the users and making sure that the consumers have an experience that's very, very clean and efficient. We basically incorporated that same concept here within the Kater application.
To kind of conclude there, you can just see the trip ending with the rating and a lot of things that you've seen that are similar with some of the other ride-sharing apps that are out on the marketplace. And there's the end of the trip. That's just the video of the app itself.
Anything else you want to add there, Monty?
M. Sikka: No.
This slide just shows what the driver would see. Again, real-time information on the number of trips they've taken, how much money they've made, accumulated and per-trip transactions. The second the phone shows when a ride actually comes up and that the passenger is two minutes away, the driver has got about 14 seconds to accept the ride.
If you take a look at the third shot of the phone, on the top right-hand corner, it says: "Hail." What we're showing is the advantage the taxi is going to have, which is to be able to provide the same service they're currently doing, which is the hail service, on this application. If somebody hails a taxi, they could turn that on and be logged off from the Kater system — that they are currently occupied.
I think this is another critical slide to just understand what our solution will encompass. It's adequate demand. The demand with adequate supply, not oversupply. This is a map of Vancouver, but it could easily be Kamloops or Kelowna. The whole point is to illustrate that when the demand picks up, by the machine learning and understanding the demand, we will be able to incorporate adequate supply, as and when required, and continue to make sure we serve the purpose by bringing more ride-sharing cars onto the platform and not have to bring in surge pricing.
K. Parikh: Yes, so this is a really important point around managing the supply and demand, which we'll talk about here a little bit more. Specifically, when you have that singular visibility across a single app versus splintered across a myriad of apps, this makes it a lot easier to monitor congestion, make sure the city isn't getting into gridlock and that there aren't too many drivers or too few drivers. These are things that I think are super important related to the supply-demand curve from a machine learning perspective.
We're also using a buzzword here called machine learning. That's actually intentional. That is one of the many things that are happening around things like autonomous vehicles and the future of transportation, which we believe is extremely important from an investment perspective for B.C. as well as globally. We have a lot of that capability here, so we're excited about that. Again, that's an intentional verbiage in using machine learning specifically.
M. Sikka: Again, just trying to make a little bit more emphasis on the supply-demand distribution. The goal here is to be able to make sure that the cabs are utilized better by taking the geofencing off when the demand increases, to be able to utilize cabs a little bit more efficiently and then having standby vehicles on the ride-sharing side available as the demand increases and blows our predictions — to be able to bring them on and, again, avoid surge pricing and have consistent supply available.
Again, the purpose of this slide is just to show that the wait-time will never be over five minutes, and if it is, there are multiple solutions we've thought of in collaboration with industry.
As discussed in the beginning, security is paramount, so we acknowledge what taxis have asked and what government is looking for — a comprehensive background search, vulnerability checks, training, which we currently do already with all the drivers. We are committed to continuing those security checks on all drivers in the ride-sharing business.
We talked a little bit about payment economics. Obviously, passengers are looking for cashless transactions. All of those options would be available for convenience, with cash being another component. We've heard several times it's what passengers would want as an option, and it would certainly be available.
K. Parikh: Specific to the cash component, again, when you think about a broader constituency, basically what we do is we train the drivers to input the digital amount that the passenger actually paid. So again, you'd still have all the audit ability, all the capability to track all the payments and that type of thing. But again, you're offering flexibility to the citizenship specifically.
M. Sikka: I'm sure that you will have many questions, and I look forward to responding. However, I want to end by saying that I'm extremely proud of the leadership displayed by our corporate team and the taxi industry. We're pleased to have developed a made-in-B.C. solution that puts an end to an era of acrimony and mistrust.
I believe that technology should be developed to resolve differences, not create them. The benefit of the Kater app is that it offers consumers a choice of transportation options and a vehicle within five minutes of making a call. It also matches supply with demand. By doing so, it ensures that all drivers can make a decent living. We have a chance here in B.C. to come up with a unique solution that ends the divide between taxi and ride-sharing companies not only in B.C. but throughout out the world.
I would hope that your committee would unanimously embrace a made-in-B.C. solution that puts consumers first, accommodates the taxi industry and can be a model for the rest of the world to follow. Thank you.
B. Ma (Chair): Thank you so much.
We have quite a few questions here. I'm going to ask all the questioners and, hopefully, the responses to be as brief and to the point as possible.
R. Kahlon: I've got lots, but I'll try to keep them because I know everyone's got questions.
Yesterday there was a prof from SFU who wanted to know about data, to learn so the university students could learn from data. Is that something that you'd be open to sharing?
Congestion has been a consistent theme that's come up with every single person we've talked to. What are your thoughts on congestion and how ride-sharing can actually help? Because we've seen ride-sharing being introduced and congestion going up. So what are your thoughts on that?
I just reviewed some of the media from yesterday, and the word "monopoly" kept coming up. Is it a monopoly? What are your thoughts on that? Maybe you can address that as well.
M. Sikka: I want to let Kush answer the data-sharing part of it. But on the congestion side of it, I think it's really important to manage demand and supply in a much better fashion than I think it's been done in the other countries and states where ride-sharing is available.
By just meeting demand and not having oversupply I think is one way. Currently, obviously, we all agree there are not enough taxis on the road. There needs to be a better solution. But the solution doesn't mean an oversupplying of ride-sharing cars. So by balancing supply and demand, I think we can adjust the congestion problem and make sure the taxis are busy when they're operational, and ride-sharing cars are busy when they're operational and not sitting idle, waiting.
K. Parikh: Then specifically to the data side, actually, just to reflect on my road traffic information experience and PayByPhone. Here at Kater, and specifically Monark, we're complete believers in data transparency.
Our view would be that all the transaction data, all of the movement data that comes through our service would be licensed to the government as well. I say licensed, meaning shared. For any types of transportation studies that you'd want to do and that type of thing, I think it's super important to understand that this is a network. It's not just ride-sharing. It's actually ride-sharing. It's car-sharing. It's the rail that you have. It's all these different components. And that's a super complex problem. That requires a lot of smart people to look at it, and as such, we believe in that data transparency.
Specific to the other component related to the word monopoly — I use the word sole-source — I'll let Monty comment on it from a policy perspective, and I'll comment on it from an operational perspective.
M. Sikka: Sure. I mean, obviously, listening to that question yesterday, we've had the luxury of having a little bit of preparation on the answer.
So I'm going to give you an answer that we think it is. I don't really agree with the reasoning that this is a monopoly. I think we've come up with a collaborative technology that offers choices to consumers. The consumer can select a taxi, ride-share, wheelchair accessible vehicles, electric cars or a luxury option within the one single app.
Kater is distinct from other apps because we offer all these options. We're a made-in-B.C. option that addresses the global conflict between a single ride-share app against the taxi industry. But we need a chance to get up and running.
We believe that B.C.'s public policy interests are served by capping the number of taxis on the road and then having the PTB cap the number of ride-sharing vehicles on the road. The idea is to balance supply and demand and for Kater to provide the ride-share vehicles. Kater is prepared to work collaboratively, whereas Uber and Lyft are not.
In about three or four years, the PTB should revisit the supply metrics and, at that time, decide if the ride-sharing cap should be lifted and to what degree Uber or Lyft can be added in. But at the outset, you've got to give the B.C. technology a chance to get a foothold.
To put it differently, you can select a consensus-based B.C. ride-sharing app that provides consumers with a vehicle within five minutes and which systematically and methodically allows Uber and Lyft into the marketplace. Or you can start without Kater and with all the chaos and confrontation that Uber and Lyft generate.
Ours is not a taxi-industry app. It's an app that's built on the premise that technology should solve problems, not create them. Ours is a made-in-B.C. solution. If you give it a chance to get a foothold in B.C., it can be a global solution, because policy-makers throughout the world are uncomfortable with the conflict between Uber and taxis.
All of you have said that you want to support B.C. innovation. All of you have said that with a minority government, you have to demonstrate that political parties can work together. This is your chance to prove both points.
As Kush said, he had some other points to make, and I'll let him do that.
K. Parikh: So specific to the sole-source…. Maybe if you could flip that around, we might know how much time we have left.
B. Ma (Chair): We have six other speakers on the list and about 11 minutes left.
K. Parikh: All right. Perfect. Thank you.
Specific to an example of sole-source, at least initially, I think there's actually a great local example, and that's PayByPhone. If you look over the last decade, that particular company started here in Vancouver, grew through the support of the local government as well as private sector companies like Impark and has now grown into, really, the dominant global player, now operating in over seven countries. It has over 70 percent market share in countries like France.
From my chair, I view this as a very similar kind of scenario. That allows for deep partnerships with the government as well. When we talk about things like data sharing and a super complex problem, this allows us to collaborate that way. If you do that broadly with multiple suppliers, not only does it make that difficult in regards to policy, it makes it tricky for the consumers, because there is customer confusion. That's something I think that everyone needs to think about, at least for the first few years when you launch the service.
R. Singh: Thank you for the presentation. My question is about…. You talked about the decent wages for all of the drivers. We have heard from different presenters that ride-sharing brings more casual and part-time work. When you say decent wages for everybody, what kind of research have you done that it will bring decent wages?
M. Sikka: Again, discussing this in depth with the taxi industry, it seems like a living wage of $18 to $20 is what is needed in B.C. for people to be in this space on a taxi basis or ride-sharing, and by providing adequate supply, not oversupply. Yes, there will be some part-time people coming on to operate. But even if they're working those part-time hours, they should be entitled to make at least that wage. By matching supply with demand, we're confident that we'll be able to achieve that.
J. Johal: I just want to get back to the issue of the conversation around monopoly or whatever term you want to use. You're asking us as legislators, if we were to move ahead with this, to pick a winner, at the end of the day. I would argue it's the consumer who should be picking the winner — that you are going to be the lone ride-sharing company with the traditional taxi industry. One app. You're telling us that we should be picking the winner rather than the consumer picking the winner. I can't get my head around that, so I think I need you to elaborate a little bit more.
And let's just say we went down that road, for a moment. How long would you, as the lone technology company, the lone app, be allowed to operate without other ride-sharing companies coming into this market, whether it be Uber or Lyft or local ride-sharing companies? So a two-part question there.
M. Sikka: Through my answer on that single-source provider, I did mention an opportunity for a B.C. technology company to take a foothold before Uber or Lyft are allowed in. That is what the ask is. By limiting the number of ride-sharing vehicles onto the platform, which only we are able to collaborate on with industry and Uber and Lyft would not agree to, is why we think PTB should look at the demand; provide the ride-sharing component of how many cars should be allowed; give us, as a B.C. technology company, the opportunity to take the ride-sharing component initially and then relook at it and re-evaluate in three or four years. If the demand increases, let Uber and Lyft take a crack at it.
J. Johal: So three to four years. You'd be a lone, local ride-sharing company along with the traditional taxi industry. Everybody else would be excluded?
M. Sikka: Well, remember, we are not a single option. Within the app…. It's one app, but it provides us multiple options on the same platform — you know, from taxi to luxury to electric vehicles to ride-sharing. There are a lot of options, and to be honest, there are a lot of other options available for consumers as well. They can use other ride car-sharing. They can use transit. There are a lot of options that are already available.
I think I'm going to let Kush describe some of the experiences when there are multiple apps and how it confuses the consumer and why that opportunity of having a one-app solution in B.C. by a B.C. tech firm is, at least in the beginning, the right strategy.
K. Parikh: There are a couple of things there. Firstly, again, drawing on the PayByPhone experience, what you find is customer confusion. Typically, what ends up happening is consumers tend to anchor on a single app. Let's say you have open competition. You have five or ten different ride-sharing apps that people can choose from. People will tend to anchor on the one, maybe two. Then what'll end up happening is that they might end up somewhere….
Again, if you're thinking about a broad constituency, they may end up in a rural area where a specific ride-sharing application may not be available. Now they're stuck, because they don't know what to download. They don't know what to do. Or if you have tourists coming in from a certain area, they might not have that type of understanding in regards to what they might be able to call.
That's actually something that we've seen. That's actually proven if you look at, for example, Germany. Germany has open-source parking transaction apps, where they've had six to eight different applications that any user can use. Actually, what it has done is it's made the entire industry, as well as the consumers, confused, and the usage is still very, very low. It's sub 10 percent. Again, that creates other challenges.
Experientially, I can tell you that, again, if you want to hit the 100 percent, not the 80 percent, I think this is a really pragmatic way to start. Then, if that is a way you do move, there is always that optionality to move forward with more, whether that's other start-ups or whatever it might be, some time in the future.
J. Johal: I just have one final question. My other colleagues have lots, so I'll just keep it down to one.
You were saying that the pricing would be the same. Generally, with ride-sharing — in a broader conversation we've had — those prices seem to be a little cheaper, right? So you're saying we're going to keep those prices at the level that we have right now. They're not going to be lower than…. You know, with ride-sharing, you can get cheaper pricing. That's what we've heard.
M. Sikka: Well, that's exactly why we've started to collaborate with industry, because we want to make sure the industry not only survives but thrives. The only way to do it is to have a level playing field. It is very predatory if there are no limits on supply and they're allowed to provide a cheaper option. There's no way to compete. Hence, when large ride-sharing companies that are massive companies enter a market, it provides a big challenge for the established taxi industry, which has operated in a very regulated environment for a long period of time.
J. Johal: But this industry haven't collapsed in these large sectors either. I mean, there has been an impact, of course, but these industries haven't collapsed either — the regulated industries. When Uber or Lyft comes in, what makes you think they can't compete?
M. Sikka: Well, respectfully, I disagree. I think the living wage in any city that Uber and Lyft have gone into, any of the ride-sharing companies…. Not only are taxi drivers not making the same money — they're making a lot less — but the ride-sharing drivers are also now starting to make less and less money and are not being able to use that income to supplement their jobs or survive if it's full-time employment.
K. Parikh: Some of these things are hard to measure. I don't know how you measure the loss of value in a medallion or the loss of value in getting a black cab licence in London. Those are major impacts that I think are hard to quantify, but they are very real.
A. Weaver: There are a lot of assertions being made. First of all, let me start by saying that it's very innovative what you've done. I think it's wonderful. I think I see a solution there.
We're in the business of setting a regulatory environment. We're not in the business of saying: "You, Kater, are the company that we need to have a monopoly with." It's just not going to happen. I think it's not realistic to expect this committee to make such a recommendation. If it did, I think we would be doing British Columbians a disservice.
You've made a lot of assertions. I take exception to these assertions. I'm sitting looking at two research papers right here that show that, in fact, the wages do not suffer. If you're going to assert that the wages go down, you need to assert it with evidence, not just say "here." Yesterday I was told that the taxi industry would be destroyed. Then I asked the presenter: "Give me one example, anywhere in the world, where this has happened." None was forthcoming. I would argue that your case would be much stronger if you supported your statements with evidence rather than assert that the doom and gloom is going to end.
Two-year app. Now, there's nothing, as far as I can see, that prohibits you from working with the taxi industry to deal with the dead-ending issue right now. You have Burnaby Taxi and Vancouver Taxi and Richmond Taxi and North Shore cabs. Why can't you develop your partnership right now? Then fill your boots. If we create the regulatory environment that would allow you to succeed…. That's a marketable solution you have now, worldwide, in other jurisdictions that have cabs. Then Kater has its own ride-sharing. We create the regulatory environment to allow Kater to have their drivers. Then they can compete with Uber and Lyft, who are here.
Why do you want us to pick you as a winner and say that we don't want a competitive marketplace, as opposed to recognizing that you have a winning solution, which has got the buy-in from the taxi, that would allow you to create your own ride-share company that could compete head-on and let the people, the consumer and the market choose you over them? Why do you want us to rig this?
M. Sikka: Respectfully, Dr. Weaver, you've got some papers you can quote. We didn't come prepared to show that but are happy to share data outlining how it does affect negatively the taxi industry in a lot of places where there's no regulation. There's no demand-and-supply curve. The wages that taxi drivers and ride-sharing drivers are making are continuously going down. It's just economics. If there's too much supply and drivers are sitting idle, they're not going to make as much money as they would if the supply was adequate.
A. Weaver: Again, this is an assertion that's unsubstantiated and with no evidence to support it. Frankly, if I were to say that there are two business models working side by side, the supply-and-demand argument doesn't work. You have supply and demand in the taxi sector and supply and demand in the ride-share sector. You're asserting that they compete, but the evidence is pretty clear that in many cases they don't. In fact, in cases where the ride-share person is an independent contractor, wages are not lower. They're actually as good.
This is the problem I'm having. You're coming offering a solution, the one solution, based on assertions as to what exists without supporting your justification of it. I want to see this go. You're Vancouver-based. You're B.C.-based. This is great. But you've got to give us some evidence. You can't ask us to rig the market to have you win over some of these other guys.
M. Sikka: Again, coming back to the same question. It's one app, but it's got multiple options within the one app. Being a British Columbian, seeing the divide…. The reason the conversation happened with taxi is because…. We looked at it, and we saw it was really unfair that a highly regulated taxi industry, which has survived within those guidelines, now can come up and have companies come in and completely destroy it by opening….
A. Weaver: Again, you used the word "destroy." This is what I'm reacting to. You have no evidence anywhere in the world where ride-hailing has led to the destruction of a taxi industry. This undermines your actual arguments. When you assert that, it's fearmongering.
What I would say, just in conclusion, is that you have a technology. You've got the support of the taxi industry. You have an app there. We can provide a regulatory environment to allow it to flourish and compete in the marketplace. I would suggest to you: compete in the marketplace. It's a great app.
M. Sikka: If it's competition in the market, it has to be fair competition. What we are talking about is a collaborative app which works on the same platform in making sure the prices are fair and equitable on both sides.
There is a supply-and-demand option that works, so there's a limit on how many ride-sharing goes are provided. And the insurance aspect of it has to be similar. The input costs for all drivers, be it ride-share or taxi, should be similar. If you would like us to compete on those premises, we're happy to compete.
P. Milobar: Part of the problem I think we're all struggling with on this committee is that every ride-share company is hoping that the rules will be made exactly for their ride-share company. The taxi industry wants them to be made specifically more to the taxi industry. Somewhere in the middle, legislation is going to have to be passed.
The reality is, though…. If you look at the legislative calendar, even though our report has to be done and how many legislative changes need to be done on ride-share, let alone when you look at the implementation of legalized pot…. I don't know when this legislative calendar is going to actually see all these changes happen, anyways, in the short term.
It ties in, I guess, to the question that was previously asked. If you have an app and you already have agreement with the taxi industry and you have…. As you say, people start to use an app. They get familiar with an app. As ride-sharing gets rolled out, would it not make sense if your app was already being used strictly for taxi right now and those cross-border issues are being solved and all of that?
If the user is more used to using the Kater app and ride-sharing gets implemented, and you add that as a component to your app that's already the predominant app being used, why would that not be enough of a competitive advantage? You could conceivably have a year of people using your app when no other apps exist by law.
M. Sikka: The answer is the government has to make that decision.
P. Milobar: No, no. We don't have to make the decision to have you use an app for the taxi industry right now.
M. Sikka: That would only be for the taxi industry. It wouldn't include the ride-share.
P. Milobar: Why is it not in use right now with the taxi industry? That is my question.
M. Sikka: Because the offer is and the collaboration that happened with industry is that…. There is an adequate supply. We have to come together and find a solution, not just for taxi as it stands today but for the future, and make sure multiple options are available. It's a bit of a band-aid if we do that today.
K. Parikh: Our intent is not to launch a taxi app. We don't have a taxi app. We have a ride-sharing app of which taxi is a component. We don't intend to launch a taxi-only application. The goal would be to launch something that's broad enough that we can….
Again, we talk about expansive thinking and data sharing and working collaboratively with the government and the taxi constituency and the citizens. We believe there's enough time to get some market traction independent of, basically, the larger independents coming in and taking over the entire market. That's the difference.
It is not a taxi application that we start with and then, potentially, expand. It's not small then big. We want to come in with the broad solution.
P. Milobar: I understand what you want to come in with. But some of those problems on the taxi side of the equation your app has solved. I don't understand the hesitation to start and to get the market share of people using that app. As you say, the pay-by-phone for parking and that got market share and dominance because it was the only one on the market. It's really no different than Hootsuite. I don't have to use Hootsuite if I want to tweet, but people still choose to.
I just don't understand how…. I guess what I'm asking is: are you saying that unless you get three or four years where you're the only game going for ride-sharing, you won't launch your app at all?
K. Parikh: I'll let Monty comment on launch plans. What I would say is that you do have to have ride-sharing as a component, from a rev-share perspective, to have a feasible technology business. Taxi is too myopic.
M. Sikka: That would be my answer as well. I think providing a solution that is not adequate for British Columbians because taxi is not providing the service that it needs to…. We need ride-sharing. The whole reason for us to get involved and come up with a collaborative solution…. It only works if ride-sharing is part of that component.
S. Cadieux (Deputy Chair): Some of the other presenters have talked about the opportunity that exists, when bringing ride-sharing and ride-hailing apps into the marketplace, for increasing the volume of users per car — so increasing this sense of a full utilization of cars. Is there an opportunity to do that within this?
M. Sikka: Well, the aspiration would be to, again, continue to collaborate with the cities, the government and the industry and to share the data, to figure out what other direction, in multiple phases, to go in. It's certainly something we would be having conversations on, but to begin with, it wouldn't be…. The answer would be that ride-sharing would be the start.
S. Cadieux (Deputy Chair): My second question is along the lines of the app. Even if one assumed the app was in place and even if one assumed…. This certainly hasn't been the discussion, but even if one made the assumption that other ride-sharing companies could be included in the umbrella of one app, then we're still talking, though, about this umbrella app organization essentially controlling the supply and setting price.
Where's the role for government and regulators in ensuring no price-fixing and no restriction of supply?
M. Sikka: That's for the government to decide. Again, I think the transportation board has to play a key role in having that conversation on how much demand needs to be met and then open that demand and analyze it, after a year or two years, to figure out if the demand is met or if there are additional cars required. At this standpoint, obviously, we all have the consensus that there is not adequate demand and adequate supply of taxis.
K. Parikh: I also think that taxi today has a precedent around pricing. As the supply increases — again, we'll share all that data with you, transactional information, etc. — the assumption would be that over time, actually, the prices would go down, coming from a volume perspective. But there is a happy medium there.
It's not something that we actually independently want to do. We don't view ourselves as: "Hey, we're coming in as an independent third party and setting whatever prices we want to in a pure open market." We're coming in with a collaborative approach, where we actually want the input from you. We believe that's the way Kater really gets traction to start in B.C.
B. Ma (Chair): All right. That concludes our speakers list. We went a little bit over time. Thank you for answering those questions.
We have our next witness, Mr. Clark Lim, who I see is in the audience.
Thank you for coming in, Mr. Lim. I am going to be setting a 15-minute timer on my iPad. I will turn it around so that you can take a look. It ends with a fancy little tune. Then afterwards we'll have 15 minutes for questions. Any time remaining from your presentation we will just roll into the questions. You can begin now.
C. Lim: Thank you, hon. MLAs and committee members. I'm very honoured here to share some of my professional opinions regarding ride-hailing. I trust you've heard from many stakeholders, providers and lobbyists, including experts in the regulatory area. I will try to bring the discussion a little bit into a different area which is really my expertise, which is transportation and policy planning and traffic engineering.
I have a three-part presentation here, 15 slides. I think a key discussion I would like to have is around definitions. I think it really matters when it comes to ride-hailing and this whole inquiry. Then I'll talk about potential impacts to an expanded ride-hailing regime in this province and then end off with some cautions and suggestions.
My opinions are not very hard, in the sense that they're really to provide you with information and really to help you maybe to step back a bit, see the forest from the trees, and hopefully bring more clarity into some of the discussions you've had already.
I'd like to start off by this analogy of a 500-metre hockey stick which represents the length of human time when it comes to human transportation. If you consider the butt end of the stick the invention of footwear and, following that, the wheel, we're really at this point where the sticks starts to curve up. I think it's going to be a very interesting next while and, from reading about all the situations with transportation and technology, that it's going to be an exponential growth. The issues we're having now may only become greater, so I think it's important that you have a good foothold and foundation to start.
I think the definitions of "ride-sharing" and "ride-hailing" are important. I'd like to start off by defining ride-sharing, which is the sharing of a vehicle on a common trip between a driver and one or more passengers. The driver needs to make a particular trip and shares excess seat capacity with other passengers that also require a trip along the same general route. So someone is going in one direction, and other people are following for the ride.
Each person, including the driver, represents what's called a demand drive trip, in that they all want to go to that destination. So origins and destinations don't have to be the same, but they can be at least along the route. For example, if I pick somebody up along the way, we may end up in the same workplace, or maybe someone lives in my condo and I can drop that person off mid-way. But generally, you want to stick to the route.
What this does is it really improves vehicle-passenger kilometre efficiency, because you're sharing the ride. You're sharing a resource that was empty, and now it's been filled by somebody who has the same need. This is also known as a car pool.
I'll give you an example. It's a math question. It's very simple. One driver plus one passenger going to work equals two work-trip purposes made. What we have here is a situation where one vehicle is transporting two person trips, so we have a productivity ratio of 2 to 1— a very simple concept. That's ride-sharing.
On the other hand, ride-hailing is a provision of ride services on demand. The driver does not need to travel beyond the provision of mobility services. In other words, the driver is providing a service and doesn't necessarily want to make that trip. So there are only passenger-demand drive trips being made with each having an origin and destination. The driver, himself or herself, does not drive a trip.
The driver may be travelling without a passenger — in other words, cruising for passengers — effectively creating a non-trip or a ghost trip, because they technically do not have a demand-based origin or destination. This is also known as ride-sourcing.
Going back to that math problem, what we have is one driver and one passenger going to work. But in this case, because it's ride-hailed, there's only one work-trip purpose made. Effectively, you have one vehicle transporting one person, so it's a 1-to-1 productivity. The driver-chauffeur trip is derived from the demand of that passenger and, therefore, is not productive, and the driver is effectively invisible. To balance that equation, what you would get is, essentially, removing the driver. So what you have is, essentially, one passenger being transported by the vehicle.
This is important because when it comes to transport policy — and I am speaking of sustainable transportation policies — these policies drive billions of dollars of investments and decisions. What's important is that we understand that these policies are really founded on greater policies of livability and increased quality of life. Decisions we make affect transport policy and, ultimately, livability and quality of life.
Fortunately, we have transportation policies that are adopted at all levels of government around the world, and they're very common. You're probably familiar with a lot of these. What we have is a policy to reduce automobile use — specifically, the single-occupant vehicle or SOV, so driving alone — reducing automobile kilometres travelled and resulting emissions and fuel use.
We want to reduce congestion from excess vehicles on the road. We also want to increase transit mode share, increase the use of transit; also increase the use of what we call active mode shares, which are walking and cycling; also increase the automobile use efficiency through ride-sharing. Again, ride-sharing is, from a policy perspective, trying to share an asset that's being used to take advantage of empty seats.
The policy intent, though, is for what is defined as ride-sharing. These are really in high-occupancy vehicles or HOVs, and that's why we have HOV lanes in B.C. and around the world. These are for two or more people.
Ride-sharing can reduce automobile use and kilometres travelled. Ride-share can also reduce congestion. I say "can" because it really requires the passenger to have got out of their own car they were intending to drive. If the person was taking transit and got into a ride-share car, there really isn't a reduction of automobile use or reduced congestion. That's actually a key point that a lot of people forget.
The primary business case for this policy is really a net positive societal benefit. On the other hand, ride-hailing can be regarded as policy neutral, as there are generally no reductions of automobile use or kilometres travelled. There might be societal benefits, but there can also be societal costs countering some of the benefits. So you may end up with simply sort of a net social transfer or a net of zero, and it doesn't necessarily increase social value.
The argument can be made, though, that ride-hailing can reduce car ownership. That's true. We have policies to try to reduce auto ownership. But those suppose that people who do not own cars will take other modes of transport and will not add to the auto use and auto kilometres by driving in a vehicle.
So on the surface, ride-hailing may look policy-positive; however, the resulting trip patterns may be more similar to driving alone.
Policy is primarily a system perspective, and ride-sharing is more policy positive; whereas, I feel that ride-hailing is, at best, policy neutral.
But from a consumer perspective or a self or user perspective, both ride-sharing and hailing provide increased travel options. In fact, they're really not much of a difference. That's really where the confusion lies, I think. People look at an app, and it's the same. They just get a ride. These are desirable from a user perspective. I use Uber when I'm out of town, and it works great. Again, these are very effective technologies, which is why they're so successful.
Those are some definitions and some policy impacts due to ride-sharing. So what are, then, some of the impacts in general? What would result?
When changing policy regulations, the goal is to really minimize unintended consequences. Unintended consequences arise, a lot of times, when you have a narrow purview, a narrow scope. I think it's important to consider: is the scope that you're dealing with in your inquiry adequate, or do you need to step back a bit?
Sometimes you have unintended consequences where you solve a problem only to move it to another part of that problem domain. You may solve ride-hailing, but you may cause problems, for example, in transit. Or you may move it to another domain completely, such as into health. This is what's called a wicked problem: when you're trying to resolve problems, and they just keep on moving around. It's sort of like Whac-a-Mole. In transportation, we feel there's a wicked problem.
I'll just quickly go over three examples of representative impacts: traffic congestion increase, roadside safety issues and cannibalization from transit trips.
The question, I think, is asked often: does ride-hailing increase traffic congestion? I think congestion is difficult to measure, actually. It's something that everyone knows about and experiences, but it's actually very difficult to measure technically. We are working in this region to define a better measurement and collect data on congestion. But what's important to know is that congestion increases obviously increased vehicle trips and kilometres travelled, as well as the intensity of vehicles over a certain time period or a location. You get those congestion spots.
Those are obviously common knowledge, but there is anecdotal evidence that ride-hailing services…. Drivers can be driving empty suggesting that automobile use and unnecessary congestion are on the rise. I think there was a study in New York showing some of that where a lot of the taxis are quite empty, and they're obviously in the middle of traffic.
There's also an increase, potentially, in entering and exiting street parking manoeuvres. What this does is cause an increase in traffic flow turbulence or roadside friction, and it can also reduce the effective capacity of a roadway.
In terms of potential impacts for roadside safety, the question is: does ride-hailing decrease road safety? Typically, increased roadside activity can increase the frequency of negative incidents. If you have random, unofficial pick-up, drop-off locations, it can increase incidents. People aren't expecting cars to stop quickly, and it can also increase driver aggression by blocking traffic, even if it's for a short time.
Another problem is that the increasing of opening doors can lead to more of what's called "dooring," which are cyclists coming by and being hit by the door. The B.C. Cycling Coalition actually has a discussion paper, which I would like to direct you to later. They provide a good overview of this whole issue.
The other potential — I think it's quite significant — is the impact to transit. The question is: does ride-hailing compete with transit for mode share? I'll quickly give you a definition of some of the primary modes. This is actually for the Okanagan area. We have auto drivers, auto passengers, transit, school bus, pedestrian, cyclists and others. This is how we, as transport policy analysts, look at how people travel — the mode. We use these definitions to make decisions and work on our models.
Does ride-hailing compete with transit for mode share? Well, competition occurs where there's a common market, and the common market is people need to travel, whether for work, school or social purposes. Ride-hailing, intentionally or not, competes for passengers with transit. If people switch from transit to ride-hailing, then they will have increased more vehicles on the road. It's simple.
How do we know this to be true? A recent study — as recent as a few months ago — from UC Davis, which is in California, studied and suggested that ride-sharing draws trips away from transit to the tune of 6 percent from public buses and 3 percent from light rail use.
Locally, transit data actually suggests a strong relationship between car passengers and transit. This is the key. There is a strong relationship between the two, which is why there's that drawing back and forth. What we see here is that… This is actually a pretty popular graphic. I'm not sure if people over there are aware that if you look at it closely, you can see that there's a trend of overall transit mode share increase — which is good news, right?
But what's happening is that there are less people car-pooling. Is that a good thing? There are less people in cars? Well, a car is a small transit bus, and a transit bus is a big carpool, really. So they're the same. The key statistic to see is that the policy goal to reduce auto driver mode share is static, so nothing has occurred.
Just a quick end-off — cautions and suggestions. I think you need to ensure you have the correct definitions. We need to understand that there is a difference, and you need to consider that difference within your inquiry. Be careful of ride-hailing wolves in ride-sharing sheepskin, I would say.
Technology changes are increasing exponentially. So what's after ride-hailing apps? There may be another inquiry on delivery-hailing of packages and goods. What about…? There's a new concept of Ridecoin, which is a blockchain-based decentralized ride-hailing where no one is really in charge. So who owns it?
Autonomous vehicles. That's really where a lot of the ride-sharing business models are going towards. So you should consider regulations that go as far back as possible and are somewhat future-proof and adaptable to technological change.
The last slide. I think you need to have a comprehensive and holistic purview. You may actually require governance changes to truly solve some of these issues. You need to be technology- and modally agnostic. I think that's important to not have any limitations or biases and favour one mode over the other. You're really simply trying to get people to where they want to go. Anything less will create issues, move problems around and increase this wicked problem.
Lastly, I think you should monitor and ensure you have a good monitoring program before and after regulatory changes. Feedback is essential not only to improvements but also to determining whether you're successful or not.
That is my presentation. Thank you for your time.
B. Ma (Chair): All right. We're going to jump right into questions here.
S. Chandra Herbert: I find it amusing: "Be careful of ride-hailing wolves in ride-sharing sheepskin." It's something that's bugged me a bit, because I've always understood ride-sharing to be you share something. It's not a for-profit kind of enterprise. So thank you for being clear about definitions. They are important.
I did wonder what kind of recommendation you would make around…. Have you seen any communities where they've successfully stopped the shift of people from transit moving back into cars? Of course, that's been a public policy objective of B.C. for many years, and Vancouver's "Shift over to transit. Get out of your cars." But if we're going back in the opposite way, that not so successful. That's the first question.
The second one. You've suggested we need to try and make regulations as future-proof as possible, autonomous vehicles, etc. Has anyone done that very well? You know, writing regulations for the future is a great idea, but we don't have time machines. We can't go backwards — or forward — so we're not always sure what it'll look like. Where do you see that being done well?
C. Lim: For the first question — examples of controlling this shift, which I would say is your question, between transit and the car passenger. This is actually a topic that I think we're just touching on. I've been doing research on a number of locations. I collect this kind of data myself.
We are seeing relationships between these different modes, and I think that is key. This is why I use this term "modally agnostic." We need to consider the mode as sort of a complete system, not individual.
We tend to say "automobile versus," and I think the automobile can be beneficial. In fact, it can be more sustainable, in many cases, than transit. You go to some places, and there are one or two people on a bus. Even one person in a car is producing less emissions.
I think we have to be aware of that. The only location that I know of that has made a positive, let's say, or a net-reduced reduction in their automobile driver mode share…. If you remove an automobile driver, you remove a car, right? They're not autonomous yet.
It's in the Central Okanagan. I showed you that one mode share. But they actually had about a 2 percent drop in their automobile driver mode share. It wasn't due to car-pooling. In fact, that dropped as well. The overall car usage dropped, but what increased there was transit, walking and cycling.
Again, it's not just about the automobile. There are obviously other modes, and they work sort of symbiotically. I think we have to understand that relationship better from a planning perspective but also how it relates to these kinds of regulations you're dealing with.
On your second question. Yeah, future-proof — that's the crystal ball. If I knew, I wouldn't be here. I'd probably be doing stocks, and I would've invested in Bitcoin faster. But the thing is, I think, that you have to somehow at least open up, be aware and consider these things.
You can only see so far. Again, it's not just looking at the future but also at what you have now and how things will change, how the status quo will change, and to ensure there's sort of a soft landing. With stakeholders such as the taxi industry, how do ensure that have a soft landing and aren't really negatively affected?
R. Kahlon: Mr. Lim, thank you so much for presenting today. A lot of the stuff you shared is helpful. I have a question regarding the study you mentioned, from USC, and the shift they saw from public transit to ride-sharing. Can you maybe elaborate a little more on that? I haven't seen that study.
C. Lim: Yeah. One thing I have to note is that the study is sort of a questionnaire survey. They've asked people on their usage. Essentially, it's asking people: when they used ride-sharing, what were they using previously? What would they have used? I don't know if you know. I would say Dr. Weaver understands the question of additionality, when it comes to carbon credits, offsets. It's sort of like: "Would you have taken something…?" That's an important question to ask.
In fact, I did a study with — I don't know if I can say; it's one of my clients — a local bank. We looked at incentives of transit. We looked at how the mode shift changed. It's mostly that more people just took more transit, and some people car-pooling took transit. Not as many drivers shifted over as we wanted.
We seem to think that it's just a simple one-dimensional relationship, but it's quite complex. I always like to consider, if you will, tuning a drum. You have to tune all the nuts and get it right. It takes iterative steps a few times to kind of get it right. We're learning, and I think we would hope to have come up with some solutions that are at least sensitive to these relationships between modes.
A. Weaver: This reminded me. My understanding is that there was a study on Austin, Texas, when the council allowed, and then did not allow, ride-hailing — their analysis of congestion post and prior? Are you aware of that?
C. Lim: No, I'm not, actually. They did not allow a study on that?
A. Weaver: No, my understanding is that ride-sharing was in place. Then there were complaints, and they stopped it. But they did a longitudinal analysis of its effects on congestion. One of these Lyft or Uber people might know that, if they're still here. Oh, they're not.
C. Lim: That's a very important question, on congestion — which is why, I mentioned, there's anecdotal…. There are some numbers, but it's very difficult to, first of all, define congestion and then, secondly, see the impacts of changes in congestion due to some sort of an implementation, such as ride-sharing.
I think it requires big data and other sorts of personal questionnaires to get to the heart of the matter. It's a combination of many different data sets that you would have to collect. For anything like this kind of a topic, this inquiry that you're dealing with, something like that would be gold, to have that information. Unfortunately, we don't have that. Again, just to collect congestion data and to define congestion is very difficult.
B. Ma (Chair): All right. I have a question for you. I'm a very pro-transit person. I like the idea of having more transit. I like the idea of Metro Vancouver being a better place for transit mobility. So it concerns me to hear that ride-hailing services may result in reduced transit usage and actually be — I know it's not a pretty word — cannibalizing from other modes that we actually see as more environmentally friendly and more favourable, like biking, walking and transit.
Are there legislative recommendations that you might make on how we can possibly control that? For instance, there has been talk about capping licences on ride-hailing, as opposed to allowing a free-for-all. There has been talk about managing supply, depending on the day and the time. There has been talk about mobility pricing. Are there any legislative recommendations that you might make and that we should consider?
C. Lim: Well, overall, beyond ride-hailing, I think there is legislative governance. They don't have to be as formal as legislative governance to do that.
In the Okanagan, they do have some governance models to try to deal with this, working together — again, focusing on not just one mode but how to best effectively move people around for the least amount of cost.
When you look at all the moving pieces and you look for the relationships — the specific vector between shifts of ride-hailing and transit, for example…. Ride-hailing would also affect people who may cycle. They're not as competitive as cyclists and people walking, just because of the nature of…. Motorized vehicles tend to be for trips that are longer. But transit is in that market. So it is probably more connected and will affect transit than the other modes.
What can you do? It's really a matter of learning from it. Can you put some rules in place where you can't pick up somebody who was intending to take transit? I don't have the answers here for you on that. It's just, really, bringing you awareness to this relationship, this issue, and potential unintended consequence of your decisions with ride-hailing.
I think ride-hailing is something that will happen in this kind of form. It's just a matter of how you transition to this new era. I've said this before. It is controversial, but once we have autonomous vehicles, we may be entering a post-transit era. If you think about transit, it's a technology just like any other mode, and it's only been around for 300 or 400 years. We are transitioning to different technologies, and you can't even imagine some of the things that will come up in the next 30 to 50 years.
I think that's really as far as I can go. I think we need to just be aware of those things as you make decisions.
B. Ma (Chair): All right. Thank you so much.
A. Weaver: I just wanted to comment. We were just talking…. I did find the study. It's by Robert Hampshire, Measuring the Impact of an Unanticipated Suspension of Ride-Sourcing in Austin Texas, where they analyze the results on congestion due to a civic vote which caused Uber and Lyft to move out. They have a longitudinal study there that shows, in fact, that congestion, or personal vehicle travel, went up when the ride-hailing companies were taken out. That was published in…. I'll just see if I can send this to the committee.
B. Ma (Chair): Excellent.
Thank you so much. Have a good afternoon.
Moving straight on to our next presenter: Taxi Drivers Association of Southern B.C. — Mr. Singh. We'll just jump right into this, because I know we're a little bit behind schedule.
I'm setting the 15-minute timer. Afterwards, we'll have 15 minutes for questions and answers. Please proceed.
TAXI DRIVERS ASSOCIATION
OF SOUTHERN B.C.
O. Singh: Hon. committee members, my name is Opinder Singh, and I represent the Taxi Drivers Association of Southern B.C. The committee is inquiring regarding two questions.
The impact of ride-hailing on different communities. One positive is that taxi users will have more options to reach their destination. Drivers will have the option to work for ride-share companies.
There are negative impacts. Income of taxi operators will decrease. Fewer trips for taxis because passengers will opt for ride-share. When the demand for taxis is less, then ride-hailing companies decrease their rate to attract passengers. Fewer passengers for taxis, then low income for taxi drivers.
Third is that availability of taxi drivers will decrease because some will work for ride-share companies and others will change their job because drivers cannot survive with low income.
Fourth is traffic congestion, as in the latest study, released on the 21st of December, regarding New York — Empty Seats, Full Streets.
Next is the income of the airport will be down because of empty parking lots. The public will take rides to and from the airport. Entering and leaving the airport will be taxed or toll, including the private cars, to compensate airport income. That's in studies. Airports are losing money on ride-hailing services.
Protecting investments. Our past Premiers and other provincial and municipal leaders have made public statements that they will protect the investments of taxi owners in the industry. It's a wrong notion. One must understand how the taxi licensing system works. The existing taxi companies get free taxi plate identifiers from regulatory authorities, the Passenger Transportation Board and municipalities. Taxi companies sell one taxi as two shares, and buyers pay to the taxi company. The money is distributed among shareholders as dividends. Not a single penny is used to improve the taxi system.
Taxi companies charge money from taxi operators, including non-owner drivers, for improvements such as new dispatch systems, computers, cameras and litigation among shareholders, with other taxi companies, regulatory authorities, the PTB, municipalities and, in the near future, the provincial government, when the ride-sharing bill is passed.
No coordination between different authorities, ministries. The Transportation Ministry, Labour, Municipal Affairs, Attorney General and Solicitor General — there is no coordination between them. The Crown corporations, the Passenger Transportation Board, the branch, WorkSafe, employment standards, ICBC, municipalities. Inter-city municipalities in the GVRD with the Passenger Transportation Board and the branch and the provincial government.
Police. In one city, the RCMP rejects chauffeur permits and application. In another city, the RCMP approves.
Airports. At YVR, passengers will benefit from ride-hailing, but taxi proprietors' incomes will go down. The ground transportation at YVR does not follow any existing law. They have their own procedure and rules which are opposed to natural justice. YVR contracts out curbside operations. This company has a hired person to control traffic, and they don't have driving licences. The only training given to them is how to suspend taxi operators, and they compel taxi drivers….
The third one is: what regulatory regime to allow ride-hailing? The Court of Justice of the European Union has declared Uber as a taxi. What will be the status of ride-hailing in B.C.? Contractor or employees? This question must be decided while passing any bill or act allowing ride-hailing. Otherwise, it will be an extra burden on taxpayers.
When drivers approach any regulatory authority — that is, WorkSafe, the employment standards branch, the labour board, law courts, human rights tribunals — many courts in the U.S. and Europe have held that ride-sharing or -hailing drivers are employees of the Uber company. Vehicle-for-hire bylaws in all the municipalities in B.C. state that drivers are employees of the company. But this is rarely enforced. Any complaint to regulatory authorities is not decided for years.
Fares charged by ride-hailing companies must be strictly regulated. There can be some surge pricing — maximum three times the time of normal rate, but not low rate as prescribed by regulatory authorities.
One regulatory authority, like New York, to regulate taxis, sedans and ride-shares, to discipline any companies, operators and drivers. There must be one authority. In case any complaint is lodged with a company, the authority must be informed regarding complaints and actions taken by them.
No punishment or suspension by the airport on the complaint of the centre unless they consider the taxi operators are airport employees. Any complaint to the airport must be forwarded to the regulatory authority.
One chauffeur permit issued by one central authority on line or otherwise after checking the complaints, driving violations and criminal record. At present, one city refuses. In another city, police issue…. Recently, New York introduced one chauffeur permit for all these.
The solution? Till ride-share is formally introduced, government has to declare and promise that ride-share hailing will be introduced in the fall of 2018. Before it is formally introduced, open, non-transferable taxi permits — licences — for the GVRD to qualified non-owner drivers, with the condition that they have to get dispatched from taxi companies or the ride-hailing companies, or from both…. In case services improve, then there is no need to allow ride-hailing in unlicensed vehicles.
There is one thing that the Uber representative said. There are five B.C.-related judgments, up to federal Supreme Court, that all taxi drivers, even single shareholders, are employees of the taxi companies.
B. Ma (Chair): Thank you so much.
We've got a speakers list going here, starting with Mr. Chandra Herbert.
S. Chandra Herbert: Thank you, Mr. Singh. I appreciate the presentation. It's great to hear the voice of drivers — although I know some owners are drivers, but it's different.
I'm curious about the last point that you've made. You are right. Uber said that drivers in B.C. were contractors, not employees. Because that's the concern — that if you're a contractor, maybe you could fall below a minimum wage or something like that.
Can you help me understand how that works? Because my understanding of drivers…. You said the Supreme Court has ruled they are employees in B.C., but others have said they are contractors. Do they pay their own taxes, medical, etc.?
O. Singh: Yes, they do.
S. Chandra Herbert: Or does the company?
O. Singh: No. Drivers pay their own. But they do — which is against the law — lease the plate. Drivers buy their own vehicle and then they buy insurance, pay for dispatch to the company, and then drivers pay for the repairs.
S. Chandra Herbert: So even though you say that the law says they are employees, they're not operating like employees. They're operating like contractors right now.
O. Singh: Right. Yes.
S. Chandra Herbert: Okay, so that's one point.
O. Singh: And one more thing is there's a $1,150 fine for leasing the plate, but until today, the regulatory authority passenger transportation branch has not taken any action, despite written complaints.
S. Chandra Herbert: Thank you. We'll have to learn some more about that one. The other one was just a point that you've made, which I think is an important one, around the request for one central authority, one permit.
My understanding is that you could be banned from driving a cab in Vancouver, but, in another municipality in Metro Vancouver, they may not have the same restriction, so you could be driving a cab there. Is that kind of what you mean?
O. Singh: Yes. In North Vancouver, they disallowed a driver because he was charged with drinking and driving. And in Richmond, the same driver was issued a chauffeur permit. The same database, same record. Why so?
S. Chandra Herbert: Yeah. Doesn't make much sense to me. Thank you for raising that point. It's one that we do have to look at.
O. Singh: In New York, they have one chauffeur permit, and it's written on that, that they can drive anything.
S. Chandra Herbert: Right. And in terms of ride-hailing, that's something that we would have to consider, for sure. That's a really important point. You wouldn't want to give somebody an advantage in that way.
A. Weaver: Thank you for the presentation. I'm a little confused, and I'm hoping maybe you could help me clarify this. My understanding is that in Canada taxi drivers are independent contractors.
O. Singh: No. It's a provincial law. It's in the Employment Standards Act. They declare that they are employees; they are entitled to all the benefits. It's a provincial law.
A. Weaver: So who pays the benefits? Is it the taxi….?
O. Singh: They are not paid. That's the problem.
A. Weaver: So the taxi driver is entitled to pay WCB? My question…. What I'm trying to question…. If they're entitled to the benefits, and they're not paying it, is that because they've chosen not to pay it, or have these rulings actually said that they're not independent contractors?
O. Singh: No. When there are some complaints to some authority — basically, when the company fires some driver — then the lawyers complain to the employment standards branch. Then it's done. Otherwise, neither WCB nor employment standards — they don't visit any office or any taxi company to check how many drivers are insured.
A. Weaver: Okay. And when a taxi driver files an income tax return, do they file it with a T4 slip that they get from the company?
O. Singh: No, not all of them.
A. Weaver: They are self…. It's self-employed income? Is that…?
O. Singh: Yes.
A. Weaver: Okay. Thank you. That's helpful.
J. Johal: One question, Mr. Singh. Thank you for your presentation.
We often hear about drivers and then owners. There's a difference there, depending on the cost of the medallion, of course. What percentage…? I don't want an exact number. That would be difficult to do. But just broadly speaking, how many people are actually drivers, and how many people are actually owners? Generally, in your mind.
O. Singh: There was a survey by YVR that 69 percent are drivers.
J. Johal: Are drivers.
O. Singh: Yeah. In many companies, only four or five or maybe ten owners are driving. Other than that…. Owners are driving, or there are non-owner drivers. Okay. In Vancouver, there are 882 taxis, right? And some, 175 recently issued, are distributed among shareholders. More than 3,000 of them are chauffeur-issued, but who's driving them? Even in Vancouver, more than 50 percent are drivers.
J. Johal: So the owners are just leasing them out for the day.
O. Singh: Yes, they are, but they charge $5,000 — used to, but now it's low — per month, and they pay $200 to the Passenger Transportation Board and $575 to the city.
J. Johal: Then they sit on that licence, and as it appreciates, that's their….
O. Singh: That's why there's a cap. One thing I want to say…. Sorry to say that. When this Passenger Transportation Act or the bill was introduced in the Legislature…. I will request you all to see or read the discussion. The discussion was to protect the value of these taxi licences and their investment. It's not that Uber provides services that I have. When attending this meeting and attending many others, no one is saying: "Better service, better working conditions for drivers or those who drive taxis." It's only to protect their turf.
S. Chandra Herbert: Maybe I'll just give you the opportunity. What would improve drivers working conditions? We're told that ride-hailing would lower drivers' wages, would do these things. If ride-hailing were to come to B.C., are you concerned about that? What do you think would actually support your members?
O. Singh: In both ways, drivers will suffer, okay. If a ride-hailing or ride-sharing company comes, their income will go down. If you people ban it, the driver expenses will go up.
The solution is to open the taxi licences first. They can get dispatch either from Uber or Lyft or Kater or anyone, right? After one year or eight months or six months, you can decide if the service is improved or not. Then introduce that…. Mr. Weaver introduced your bill that the registrar should have power. Why not power on all the things? Why not one single chauffeur permit?
A. Weaver: I wanted to thank you again. You've brought an incredibly important perspective to these discussions that we hadn't heard. That is the perspective of taxi drivers. I sincerely thank you for that, and I think it'll help us with our deliberations as we move forward. It's very, very important.
O. Singh: One more thing I want to say. You know why no drivers are coming, no one is speaking? Because they fire them. We've founded the association. They fired them. They called other companies not to hire these persons. I know what will be my fate in the next few days or months. But I am close to retirement. I don't really….
A. Weaver: Well, give us a call if you get fired. I'm sure you've got a lot of strong advocates on the committee here for you.
O. Singh: No, I hear that if something happens, it's contempt of the House. If someone threatens me, it's contempt of the House.
R. Singh: Thank you for the presentation. We have been hearing from a lot of the presenters about with ride-sharing coming in, it would be just casual, part-time work, and they won't make a living wage.
With the drivers, I want to know about your perspective. When you are driving, do you make a living wage or a minimum wage? Do you make a good living?
O. Singh: Plain and simple, if we pay full taxes, we don't make.
Another thing is that if you introduce ride-sharing and it's not controlled by one authority, then there will be a lot of violations — national safety. The reason: if a truck driver comes home, let's say early, and it's a Friday. It's busy. He will go downtown, and he will start working for Uber or some other ride…. There should be one control, one authority, to monitor all these.
B. Ma (Chair): Thank you so much. I have a question for you as well. The Supreme Court cases that you cited — would you be able to submit that? Fantastic. We'll take a look at that.
Are there any other questions from the committee? No.
Thank you so much for being here, Mr. Singh. You've also helped us catch up on our time.
Since we've caught up on time, I'm going to call just a five-minute recess. The committee will be in recess until 12:10.
The committee recessed from 12:05 p.m. to 12:14 p.m.
[B. Ma in the chair.]
B. Ma (Chair): Our next presenters are from the B.C. Federation of Labour — Irene Lanzinger and Stephen Howard.
I'm going to set a 15-minute timer on my iPad. Then following that, we will have 15 minutes for questions. You may proceed, and thank you for being here.
B.C. FEDERATION OF LABOUR
I. Lanzinger: Thank you very much, and thank you for giving me the opportunity to present.
I'm going to make a few general comments about the sharing economy and the complexity of the issue that you have to deal with. Then we have nine recommendations for you.
The sharing economy has the potential to bring some very significant benefits, particularly for consumers. But it also has some dangers. We've certainly seen, as a result of political and economic changes, including the advent of the sharing economy, an increase in part-time, precarious work. That is of great concern to us. If the sharing economy benefits consumers and business interests, it also has to benefit workers in terms of good jobs.
The introduction of ride-hailing will have a complex impact on transportation and people's ability to get around, and government has a role to play in putting in place a thoughtful, comprehensive policy and regulatory framework to ensure that these economic changes benefit everyone, including working people. I'll go over our recommendations.
We have the following recommendations to establish an appropriate and fair regulatory framework to enable ride-hailing companies to operate in B.C. and to oversee the entire sector. I think, as you've heard earlier today, there are problems in other parts of the sector, as well, and workers who are not being treated fairly in other ways, including taxicabs and things like that.
We believe that if we put in place a progressive regulatory framework that levels the playing field to do two things — ensure workers are treated fairly and that public safety is protected — then ride-hailing companies should be allowed to operate in British Columbia.
With regard to public safety — and I'm only going to say one thing about this because my focus will be on workers — we support a framework that includes standardizing insurance requirements, driver qualifications and licensing, vehicle safety and inspections and criminal records checks. That may not be even a complete list of what needs to be in place to protect public safety, but those are the things that came to our minds in terms of public safety so that everybody who transports someone in their car, or a car that they own or operate, should have the same regulatory framework to ensure public safety.
With regard to workers, if we introduce ride-hailing with no limits — just open the doors, flood the market — we will almost certainly drive down wages and benefits, and almost everybody will be working for less than living wages, less than minimum wage. We will create a vast number of poor-quality part-time jobs. So our goal in this framework has to be to protect and improve existing jobs, good-paying jobs, and create new, stable employment — jobs that pay well, that provide benefits, that have some security to allow workers to support themselves and their families. That should be the goal reflected in the framework we set in place to introduce ride-hailing.
I know you all understand this, but it is a mantra of ours because we don't have that currently in British Columbia. We have one in five children who grows up in poverty. We have a low-wage sector that is enormous in our economy, and we pay the price for that in terms of poverty and an equality gap. We don't want to make that worse by introducing ride-hailing. In fact, we want to make it better with a number of measures.
Ride-hailing companies don't have a great track record in terms of labour relations. Workers need to have the power to deal with what are, in some cases, rich and powerful multinational companies that have been allowed to classify employees as independent contractors and absolve themselves of any responsibilities for those employees. So we say that a regulatory framework has to include a review of existing provisions of the Employment Standards Act and the labour code to establish a clear, legal employer-employee relationship between ride-hailing companies and their workers. Those companies cannot be allowed to be completely free of responsibilities for their workers by declaring them independent contractors.
With that employer-employee relationship, we would have all statutory deductions made so that employees are covered by EI and by Canada Pension Plan benefits. And the Employment Standards Act has to enforce a set of minimum workplace standards throughout the ride-hailing sector — and, indeed, the taxi sector.
The safety and well-being of workers has to be protected with health and safety protections, including the application of the Workers Compensation Act and the jurisdiction of the WCB over workers who work in the industry so that if workers are injured on the job, they are protected, entitled to compensation, entitled to return-to-work provisions and have the protections that workers have under the WCB.
Ride-hailing companies have to respect the constitutional right of Canadian workers to join a union and bargain collectively to improve wages and working conditions. We have certainly seen cases where ride-hailing companies have vigorously resisted the right of employees to join unions. That's an important constitutional right that we enjoy in Canada, and ride-hailing companies have to be required to respect that right of workers.
The changes in the broader passenger transportation sector will impact workers, so we recommend a meaningful, just transition program to be funded by industry and government to establish and assist affected workers. So if there is an enormous impact on, for example, taxi drivers, who have a pretty significant capital investment in their taxi and their licence, there should be some assistance to those workers if they are dramatically affected by the introduction of ride-hailing.
Those are our recommendations, and we hope you'll consider them carefully.
B. Ma (Chair): All right. Fantastic. Thank you so much for that. We will jump right into questions.
S. Cadieux (Deputy Chair): I'm not surprised by your recommendations at all, of course. We've had a fair amount of conversation about the concern about wages, about the ability of people who currently drive taxis to earn a decent living, etc., if the market was flooded with competition.
But I do also have concerns about that from a number of perspectives, and I wonder if you can expand on your comments.
The market sets the rate, so if taxi drivers today are concerned about the ability to earn an income driving a cab and yet haven't chosen to unionize, for example, and the market is saying that the service is inadequate as it is and can't meet the demand, then I don't understand why we're concerned about bringing in competition. It seems like the market in and of itself today hasn't met the need, nor is it meeting the need from a perspective of driver income, because, presumably, people are not willing to pay what it would cost.
Can you comment more around how you see that playing out reasonably in a market that currently isn't meeting demand?
I. Lanzinger: There are two comments I would make about that. One is that — and I'm certainly not an expert on the taxi industry, and I would defer to many others who are — there are problems there in terms of working conditions for taxi drivers. But I think that there are taxi drivers who are earning a decent living, right? Some of them have made a very significant investment in their cab licence in order to make that living. I think generally many of them work longer hours than they probably should, but there are a set of, if not really good jobs, sort of jobs that have provided a living for some people.
I think there's some cleaning up to do in the taxi industry. Whether or not that's your job or your jurisdiction, I don't know, but there certainly are some things that need to happen there. This may be an opportunity to take care of some of those things to improve those jobs and take care of some of the issues that have been raised here.
The market doesn't always set the rate, not by any stretch of the imagination. We have a minimum wage. We have minimum employment standards. We have rights as workers. We have WCB. So governments have a role to play in ensuring that there are good jobs. Part of that role is whether or not you allow this industry to operate and what rules you set in place for this industry.
There are many cases in which the market doesn't set the rate. Governments intervene to ensure that workers have their rights and that they earn decent pay and that they're treated fairly. I think that's your job. To allow just an open season with no regulation would be a huge mistake, in my view, both in terms of public safety and workers' rights.
S. Cadieux (Deputy Chair): Thanks and then one more follow-up to that. I understand that when someone is employing someone else. But what if somebody is choosing to operate as an independent operator, choosing to run their own business, which is what is happening or what is described to be happening? Both in the taxi world and the ride-share world, essentially, drivers are owner-operators and not employees.
I understand we may want to argue — I myself might argue — that that isn't the case and that they are employees, but as it stands, in this realm of transportation option, taxi/ride-hail, we are looking at independent owner-operators who can choose or not choose to operate.
How does that impact, from that perspective, on your submission? Because to me, again, then we are looking at a market setting a price and individuals deciding whether or not they want to operate at that price.
I. Lanzinger: I don't think that it is in anybody's interest to allow Uber to operate on this principle that all of their drivers are independent contractors.
In my view, what is required, if we allow ride-hailing, is for the Employment Standards Act to define who is an employer and who is an employee and the responsibilities of the employer to the employee. The fact is that Uber is a big multinational company, apparently not making a profit, which kind of mystifies me, but intending to make a profit by using these workers.
So they have a responsibility to those workers, and we have a responsibility, as a society and as a government, to ensure that those jobs are good jobs, that people are earning a decent living, that they aren't exploited by a multinational company. Indeed, in jurisdictions where this has been tested, Uber has been found to be an employer.
S. Chandra Herbert: Somewhat, I guess, following up a similar line of questions, do you know of other jurisdictions — I know there's London; I think the EU are having some debate there, and California — where they've actually unionized, where drivers are employees where they've unionized?
Of course, we heard the earlier presentations suggesting that in the taxi industry, they are operating as owner-operators or just as loaner-operators, maybe to create a term, which may have problems. It sounded like there's some debate about whether they're employees or not and who deducts and who doesn't. I think that requires further investigation. Any jurisdictions, places, where this is happening in the way you suggest it should?
I. Lanzinger: In Seattle, there's been a fairly significant move to unionize Uber drivers. The company has poured huge resources into resisting that. It would be interesting to test that in Canada, where our constitutional right to unionize is considerably stronger than it is in the United States. I haven't heard of it here, in Canada, but it certainly is happening in Seattle. As we speak, that battle is continuing between Uber drivers and Uber, as a company, resisting the unionization of drivers.
A. Weaver: You touched upon something that I think is equally applicable to the taxi industry right now, that taxi drivers, if they don't own the plate, they are individual independent contractors. They lease the vehicle from the licence owner. They file their income tax return as self-employment income. They are treated, in Canada, as independent contractors. So my understanding is, as such, the whole notion and concept of unionization of independent contractors doesn't really apply.
If they were, indeed, treated as employees — but that then should apply to all taxi drivers in the country as well — then you could get the idea of unionization under our constitutional right.
I guess I struggle with bringing forward the arguments about requirements that need to be put in place for ride-sharing when we're not already and for decades have not dealt with the exact same issues that exist in the taxi industry. Those tens of thousands of drivers in British Columbia — I think it's tens of thousands — are independent contractors. They do not unionize.
We're having a different standard here. I'm wondering: to what extent are you, the B.C. Federation, prepared to stand up for the taxi drivers as well and ensure that we actually don't have a double standard on one versus the other?
I. Lanzinger: Well, I think, as I said before, this may be an opportunity to take care of some issues that have arisen in the taxi industry in terms of protecting those workers as well. The thing that we have done to protect taxi drivers is limit licences. Whether we've done that too much or too little or how that has worked is an open debate. But we limited licences so that there wasn't a huge number of taxis, and people could at least, on paper or in theory, make a decent living out of that. Workers choose to unionize, and we certainly are seeing different models of unionization. It would be possible. Certainly, there are taxi drivers who work and are drivers for a company who could unionize if they chose to.
In my view, the issue of unionization — which is actually easier for Uber drivers because they are more clearly related to a single employer, who is Uber — is separate from taking regulatory steps to ensure that there's decent work there, which is open to you to recommend and which we gave you some recommendations on.
We have a long history in the B.C. Fed of saying we are here to advocate for all workers, not just unionized workers. So I agree with you that we support improving things in the taxi industry to take care of those workers as well. Our point here is that the regulatory framework that's put in place should cover all of those people — taxi drivers, Uber drivers and Lyft drivers. We need public policy that protects both public safety and workers, for people in that industry in general.
A. Weaver: To follow up, there's nothing right now that guarantees any taxi driver actually earns a good salary. In fact, when we, as a committee, were in the cab in the Kootenays, the woman there was saying: "Bring on ride-sharing, please, as soon as you can. I lose money many days a week. It costs me $100 a day to rent the cab. Sometimes I don't even make that."
The existing regulatory framework does not actually deliver what you're asking for a future framework on a segment to do. We talk about level playing fields. I think it's important to recognize that there are substantive problems in the taxi industry today that need to be dealt with.
I. Lanzinger: I agree.
A. Weaver: It's not appropriate to only focus on Uber or Lyft. Also, again, I would challenge you to say that it's clear that they work for Uber. Many ride-share drivers actually have three phones with three apps open. They're driving for Uber, they're driving for Lyft, and they're driving for, say, Kater. There are three of them there. They'll pick up whatever they choose. They're truly independent, and they're choosing to service whatever app is saying there's a ride available. I'm not so sure it's as easy a distinction as has been made out here.
I. Lanzinger: I'm not arguing that we shouldn't take care of those issues in the taxi industry. We should. We should put in place a framework that applies to the taxi industry and to these drivers. There's nothing stopping anybody from working for more than one employer. But when you work for an employer, that employer has a responsibility to you, and you have some responsibilities as a worker as well.
This independent contract…. I have no responsibilities for EI, for CPP, for WCB. It just absolves the employer of all responsibilities and allows them to earn a profit through the work of those workers without any responsibilities. That should not be allowed, either in the taxi industry or in the ride-hailing industry.
R. Singh: Different presenters have…. When we were talking to them, especially Uber, Lyft and researchers…. One thing that has come out is that most of the work that these drivers would be doing would be casual, part-time work. But when we talked about any study that has been done where Uber or ride-hailing has come, how it has impacted the taxi industry and has created more precarious work, they did not have anything.
I just wanted to check with you. Have you found any studies, or have you done the study on this thing?
I. Lanzinger: Well, we certainly have not done the study, and I don't know of any. We haven't come across any either. It would be interesting to…. They should really do that study in New York, where there seems to be a real prevalence of ride-sharing, and the impact on the taxi industry. I'm not sure whether that's available, but we don't have it, no, sorry to say.
P. Milobar: I shared that cab with Dr. Weaver when that conversation happened. I guess when you're in the hospitality side of the world…. One could say right now, in January, it's slower for everybody that works in hospitality. There are probably fewer chambermaids working in the hotel here. There's probably less tipping going on. Bars are slower.
I think we run a risk if we're worried that an independent taxi driver should be making a profit every single shift. There are all sorts of businesses where you don't necessarily. You want to try to have the bulk of your shifts, just like any business, where you make a profit. But there are going to be those loss-leader days that we see all over.
Where there is, I think, some protection for the taxi industry, in terms of trying to make a living, is if you are driving on a day where there's a reasonable volume. Because there's the pricing that's been set and how it gets set, there's a reasonable expectation that if you're driving on a reasonably busy day, you should make a decent amount of fare dollars, and by extension then, the profit is there.
To that end, we've heard a lot of conversation about protecting around price surges, surge pricing. Would it be your thought, or have you given any thought to, that if ride-hailing is approved, there be a minimum price established? We have a minimum price you can sell liquor for. We have minimum prices all over the place. That would be one way to potentially counteract what a driver would be earning. Has your organization given that any thought?
I. Lanzinger: We haven't really delved into the details of that. I think the answer to that is no. But it seems to me that there are a number of ways in which you would have to do something to ensure a decent price and a decent wage. One would be to limit the number of people providing the service. The other would be to establish a minimum price, right?
Even by establishing a minimum price, you could still have a huge number of drivers providing very few rides. The point that I made — and I leave you to deal with how to solve the issue — is that you can't flood the market with drivers because then you will undermine the taxi industry. As imperfect as it may be at the moment, it's still providing better jobs than you would get if you just simply flood the market with drivers.
Whether you do that through some kind of limiting of the number of cars that come in or you do it with some kind of minimum standards around how much a person has to earn, there needs to be a way to ensure that we don't just have a huge number of cars providing a few rides and nobody earning a decent living.
B. Ma (Chair): All right. Any other questions from committee members? Seeing none, thank you so much for coming in.
I. Lanzinger: No problem. Thank you.
B. Ma (Chair): This committee will be in recess until 1:30.
The committee recessed from 12:39 p.m. to 1:38 p.m.
[B. Ma in the chair.]
B. Ma (Chair): Welcome back to everyone in the gallery for the afternoon session of the second day of public hearings. Our first witness for the afternoon is Stephen Hill, and I understand he's available via teleconference.
Stephen, I'm not sure if you've been listening in on some of the other presentations, but the way that the meeting format will work is you will be given 15 minutes to present, and then we will have 15 minutes for question-and-answer. If your presentation takes less than 15 minutes, the remaining time will be rolled over into the Q and A.
Speaking to you right now is MLA Ma. I'm the Chair of the Select Standing Committee on Crown Corporations. I want to thank you for joining us today.
S. Hill: Thank you very much. I'll just launch into it.
I'm a journalist based in San Francisco. I've been writing about Silicon Valley and technology companies for a number of years. One of them has been Uber, and Lyft and ride-sharing and Airbnb and all these different sorts of companies that are new and making impacts, particularly in the urban environments.
The first thing to understand about the rise of these companies is it comes in the aftermath of the 2008-2009 economic crisis for most of the developed world, including the United States and Canada. We saw a loss of a lot of what are typically called good jobs — good-paying jobs with a certain amount of social security and benefits and these sorts of things. In the aftermath of that, they have been replaced by more part-time jobs, temp jobs, jobs that don't pay as well, jobs that don't provide nearly as much social security or health care. Uber and ride-sharing fit within this category of jobs that have replaced these good sorts of jobs.
The impact that's coming with Uber that we're seeing in many cities — and I've looked at cities not only in the United States but also in Europe…. I've spent quite a lot of time in Germany, looking at the impacts there and other places. You're going to see impacts on labour, on environment and on city quality of life in terms of traffic congestion.
There are pros and cons to ride-sharing. People who are passengers…. In the United States, in San Francisco, public transportation is not particularly good. Taxi service is not really, then, particularly good. So people welcomed having an alternative mode of transportation for getting around, especially initially.
You can also see that on the driver side again, you had people that lost jobs, needed work, so they — initially, at least — welcomed the opportunity of having a way to make a living through driving for ride-sharing companies. Some of those drivers certainly valued the flexibility of this type of work, at least initially.
I think what we see more and more of is that…. When you first ask, you know, a lot of people say to me: "Well, I talk to my Uber driver, and he says he likes it a lot." And it is usually a he. Most of the drivers are male. But the reality is that if you ask that same driver six months, seven months, eight months from now how they're liking it, you get a different story.
The drivers initially like the flexibility, the ability to make some money. But eventually you want to earn more income, and you start feeling like, as one driver told me, "gum on the bottom of this company's shoe." The company doesn't really have a whole lot of respect for these drivers in many ways.
These drivers are independent contractors, according to U.S. labour law, which means that they can be dismissed at any time. There have been incidents in which Uber has summarily dismissed thousands of drivers at one time. Why would they do this? Because with Uber you're getting a rating from the customers, and if you fall below a certain rating from those customers, you can be dismissed. Also, you are required to accept a certain number of rides.
For a lot of these drivers, they began figuring out that they don't make money on short rides. They make money when the fares take them for a long distance, to the airport and back and these sorts of things, so they started refusing short rides. So at a certain point, Uber cut off thousands of these drivers from the platform because they weren't accepting a high enough number of rides.
Now, this is an important point in U.S. labour law, because the test for deciding whether a worker is an independent contractor versus a regularly employed employee is the amount of control exerted by the company over these workers. The point has been raised that if these workers can't even decide for themselves whether to accept a ride because they think they're going to make money from it or not, then that speaks to the point of how much control these workers actually have over their working situation and whether they truly are independent contractors.
The wages are not great. They're probably no worse than the taxi wages. But for ride-sharing drivers, they're responsible for their own driving costs. A lot of the figures you see coming from Uber and others about how much their drivers make — they, in fact, don't calculate into that how much their drivers have to spend in order to earn that wage.
There are numerous drivers out there who would tell you that they're not even making the minimum wage, the minimum wage in the United States being between $7 and $8 an hour.
For some drivers, they seem to have, perhaps, that entrepreneurial spirit, and they figure it all out. They can figure out the tax laws, they can figure out how to deduct their expenses, and they can put that on their taxes. For some of them, they think they're doing okay. For others, they're not doing okay at all.
Even for some of the ones who are doing okay, when I ask them, "Well, you realize you are using your own car. When you think about how much you're making, are you amortizing the wear and tear on your car and the fact that your car, instead of lasting ten years, now is going to last maybe three or four years at the current rate you're driving it?" Most of them are not calculating these sorts of things at all.
I think that at the end of the day — when you start thinking about: how good are these jobs? — the most telling thing of all is the burn rate of drivers. Uber's own study showed that 50 percent of its drivers last a year on its platform, and then they leave. Other studies have rather astounding numbers, finding that only 4 percent of Uber drivers last more than a year.
Down the street from my house in San Francisco — and this is the birthplace of Uber — I've seen Uber setting up a table at the gas station, trying to recruit males — only the males — who are pumping gas at that gas station, to drive for Uber. Uber is desperate to keep getting new drivers because they are burning through existing drivers so quickly.
If these jobs are that good, as Uber sometimes claims, then why are people leaving at such fast rates? That, I think, is an important point.
Moving on to the environmental impacts of Uber. Initially, Uber has been saying that this is going to get people out of their cars, and this is going to reduce traffic congestion in cities. In fact, the exact opposite has taken place.
In city after city where this has been studied, you can see the impacts. There are actually more cars on the road now — not entirely because of Uber. I mean, the economy is doing better now so more people are driving. But we can look at some of the numbers from cities, like New York City, London, San Francisco. You can see….
For example, in San Francisco, there are about 1,800 taxi cabs, and there are 45,000 Uber and Lyft drivers. At any one time, approximately 9,000 of those ride-sharing cars are on the road. You have people coming from outside of San Francisco — Fresno, Merced and other parts of eastern California — driving to San Francisco, living in their cars for a period of three, four days at a time, doing the ride-sharing stint, trying to earn money, and then they go back to where they live.
You're having an influx of cars to the point where the number of ride-sharing cars has completely swamped the number of taxicabs on the street. And this is part of the actual strategy of Uber. Their goal is to flood the streets of cities with cars. By doing that, it means the passenger, the customer, waits less amount of time to get a ride. There's no question that in San Francisco, in the part of the city where I live, it could take 30 minutes to hail a taxi before the ride-sharing days. Now you touch the app and the car shows up in ten minutes.
So that's a great improvement in service for people, and they like that. But what they don't realize is that now it's taking 20 to 25 minutes longer to get anywhere because there are so many ride-sharing cars on the streets. They have completely clogged the streets and caused all sorts of congestion.
We see this also in New York City, where there are now twice as many Uber and Lyft cars as yellow taxis. You imagine that. The iconic yellow taxis are being swamped by ride-sharing cars. In London, the number of ride-sharing cars is triple the number of London's famous black cabs.
These are the knock-on effects that we're seeing. Congestion. If more people are actually using cars to get around…. There have been studies about this.
One study found that about 50 percent of people that use Uber or Lyft or a ride-sharing car, when they're asked, "If you didn't have this service available to you, what mode of transportation would you use?" respond that they would either use public transportation or that they would bicycle or that they would walk. People are moving from a mode of transportation that is more carbon-friendly and is better for the environment, and they are getting into a form of transportation that is worse for the environment. This is a big concern.
The other concern that has arisen is that in fact ride-sharing is undermining public transportation. We are seeing a decline in the use of public transportation in New York City, Washington, D.C. and San Francisco — in many, many cities.
I'll give you an anecdotal story. A person I know in San Francisco recently said to me that he was waiting for his Uber car to show up. I asked him: "How much is it going to cost?" He said, "It's going to be about $5 for me to get home, and the public transportation would be about $2.50," and he said: "You know, the difference is not that great, and it's much more convenient."
I said: "Well, what if the price of the Uber fare were double that, if it were $10?" He said: "Well, then I probably would more consider taking the public transportation."
The reason why I say that is because the other thing that most people don't realize about Uber is that the cost of every ride is being subsidized. When that passenger gets into that car, they're only paying about 50 percent of the cost of that ride. The other 50 percent is being paid by venture capital funders, and Uber is using this money to drive down the cost artificially in order to beat the competition.
Now, the competition was supposed to have been Big Taxi, as Uber likes to call it, and the other ride-sharing competitor, Lyft. But it turns out that another competitor has become public transportation. Because the cost is so cheap, people are not using public transportation as much as they were. So this is reducing funding for public transportation itself.
At some point, Uber is going to have to raise its fares in order to reach profitability. In fact, some of you may have caught some of the headlines over the past years of all the scandals that Uber has been involved in and that led to the change of a CEO, from Travis Kalanick to a new CEO. A lot of people thought it was because of a lot of the scandals, but it really wasn't about that, because Uber has been involved in scandals since its beginning.
What it was about is that Uber has not been able to figure out how to reach profitability, particularly at the low fares that is subsidizing these rides at. So a lot of the board members of Uber, the initial investors, are saying: "Hey, we want to get to an IPO. We need to reach profitability, and we don't see a plan here for how this company is going to reach profitability any time soon."
In short, you have a service where, yes, it's providing a job in a down economy. Yes, it's providing some flexibility for some workers that want that or need that. Yes, it's providing another transportation option in places where public transportation is not very good and taxi service hasn't been very good either, but it's coming at an extreme price. It's coming at the price of…. The types of jobs being created aren't very good. Workers don't really have any control. They can be cut off that platform at any time. Wages aren't very good. It's a huge increase in congestion, carbon emissions and other knock-on effects that we're seeing for these sorts of things.
I have some ideas about how you can regulate Uber, if that's of interest. I'll leave that for the questions and answers.
B. Ma (Chair): All right, fantastic. We'll jump right into questions.
S. Chandra Herbert: Thank you, Mr. Hill, for bringing your perspective. We heard from Lyft earlier today on the question of San Francisco and congestion. You're in San Francisco as well, so I'd be interested in your perspective. What would be the regulatory suggestions you'd have around that question of congestion, in particular?
S. Hill: Well, there are a few. One of the mistakes that has been made in the United States in regulating this service is that most of the legislation has been passed at the state level. In 40 states out of 50, those states have included pre-emptions that don't allow local governments to pass their own laws on ride-sharing. This has been a huge mistake.
The needs of San Francisco are much different than the needs of, say, Fresno or Merced or some other small town. In some of the smaller towns where either you don't have a lot of public transportation or you don't have maybe even a good, decent taxi service, ride-sharing may not have a lot of the knock-on effects that I've described, at least not as much.
A city like San Francisco's needs are going to be different than these other cities. So allowing San Francisco, where now there's a big outcry…. I don't know what the Lyft representative said, but I can tell you, politically, there's a huge outcry here of wanting to reduce the number of ride-sharing cars that are in the streets.
Laws have been put in place years ago to reduce the number of taxis for this very reason. In fact, you can go back and look at the history of taxis, and you can see periods during economic downturns where people would get into whatever vehicle they had and try to make some extra money, and that would lead to a proliferation of cars in the streets. It would lead to congestion. There would be an outcry, and then there would be regulations put into place. That's where the current medallion system that reduces the number of taxis on the streets comes from.
Well, it's déjà vu all over again. We've seen history just repeat itself, where now there are so many of these new types of taxis — i.e. ride-sharing — on the street that people want to have it reined in. Yet San Francisco finds that its hands are tied from doing that by the existence of a state law that had pre-empted it.
My short recommendations would be: don't pre-empt local governments from doing this, and there will be a need at some point to have a limit on the number of ride-sharing cars. There's just no way around it. The other thing I would say is that you should consider making these drivers be some sort of employee status rather than independent contractors.
London is now moving forward with that kind of strategy. Other parts of Europe are doing that as well. It seems to be that you want to create good jobs, and I think if you do something like this, you'll find that Uber will probably hire a certain number of full-time drivers, create a certain stability in their driving force, and then you can have the ability of short-time, part-timers, they maybe could be contractors that are adjunct to the stable, full-time driving force that are employees of Uber.
Those would be my quick recommendations on what you should do regulatory-wise.
B. Ma (Chair): Our next question is from Mr. Kahlon.
R. Kahlon: Thank you very much for your thoughts. We are hearing that, obviously, many jurisdictions have gone forward with what they thought was perhaps, let's say, opening it up and just letting as many cars in. And now everything is shifting, right? Every jurisdiction seems to be…. Even though they brought ride-sharing in, now they're struggling with: what does that mean for everything?
I was just hoping that from your perspective, you can share a little bit more detail on how San Francisco now is looking to deal with the new challenges. Have there been things proposed? Is the local council looking at any measures now that the state has control over the levers?
S. Hill: There's a lot of frustration around that point in San Francisco — and not just San Francisco. Other cities that I'm familiar with where there are similar conversations going on include Seattle, New York City and other places. There are threats now of lawsuits. San Francisco is going to sue the state authority overseeing this because they want control back of their streets.
It's a political issue where it's talked about in political campaigns now. We're about to have a mayoral election in June to replace a vacancy, and it's very much already being talked about and will be talked about as part of the political issues being discussed here. I can't emphasize enough how in just five years' time, San Francisco's streets have changed. San Francisco is not that large of a city in terms of geography. You used to be able to drive from one point to another in 15, 20, 25 minutes depending on the time of day. Now, it's almost impossible at any time of day. The traffic is just that bad.
It's a quality-of-life issue at this point. People are quite frustrated with it and trying to figure it out. I think you're going to see a state law introduced shortly that will give local governments an option for how they will regulate this type of industry.
The problem is that, as I said, the needs of San Francisco are different than the needs of other smaller communities. There may not be a majority vote there to create that kind of local option, because it's really the big cities that seem to have the biggest problems — San Francisco, San Diego, Los Angeles, Sacramento to some degree. So whether they can get their colleagues to represent the smaller communities to vote for a law remains to be seen.
I would say don't make that mistake yourselves if you haven't created a law yet. Allow some sort of local agency over figuring out how they want to have ride-sharing work in their communities.
B. Ma (Chair): Our next question comes from Mr. Johal.
J. Johal: Hello, Mr. Hill. Thank you so much for your presentation. I think you raise some very interesting points.
First of all, broadly speaking, I've read some articles that you've written, some interviews that you've done, in the Wall Street Journal. You know, you've raised concerns about Airbnb as well, not just Uber and ride-sharing.
You're certainly not saying that we should not allow these folks in, but you're also saying that we have to really look at labour laws, and these are pretty, overall, fully-encompassing changes that have to be made within government and legislation on the policy side before we allow these types of entities to operate in these cities. Am I correct?
S. Hill: Yes, that's right. I think that a lot of the mistakes that are being made in how we regulate these companies is not understanding that these companies are different in certain fundamental ways than previous companies that have come before.
Airbnb is a good example. Airbnb started out as a good idea — the idea that you could let someone rent out a spare room in their home, make some extra money, especially in a down economy. I don't think anybody had too much of a problem with that.
The problem has become that Airbnb has become a massive loophole for professional real estate operatives to rent out and basically take over the housing stock and rent it out to tourists rather than local people. Once you start reducing your housing stock and taking it off the regular rental market, it drives up costs for everyone else. The real estate professionals have figured out: "Hey, I can make a lot more money renting out on Airbnb than I can renting to a person who works as a waiter or carpenter or bus driver or whatever. I can just rent it out to tourists." Estimates have been that these people will double and triple their revenues by doing this.
J. Johal: Yeah, the reason I….
S. Hill: The economic incentive is clearly there to turn your housing stock.
I can imagine a beautiful city like Vancouver…. I used to live in Bellingham, Washington, and used to visit Vancouver often. It's a beautiful city. I can imagine that's a tourist magnet that would be just ripe for this kind of taking over of the housing market.
What you realize with Airbnb…. We've seen cities like San Francisco and others that have passed laws trying to regulate Airbnb. They pass laws, saying: "Okay. You can still do it, but you can only do it, say, 60 days a year." Well, how do you know how many days an apartment next door, here, is doing that? Who's counting? Unless you're going to hire an army of regulators to go banging on doors….
J. Johal: Sir, I got your point. The reason I was asking was just the…. You brought up the issue of Uber and Airbnb and the impact these new technologies are having on communities. I just wanted you to elaborate on that. You have, and I appreciate that.
The question I wanted to ask you was specifically: can you give me a sense of what surge pricing has done in areas like San Francisco or other areas that you've done your research on in the US and in Europe?
S. Hill: Sure. Well, surge pricing. Does everyone know what it is? You've already talked about it, and I don't have to explain it?
So the price goes up when the supply…
B. Ma (Chair): Yes, we're familiar with surge pricing, sir.
S. Hill: …of drivers is down. So in theory, it brings more drivers out to drive. They believe it's a supply-and-demand thing.
You read a lot of stories of…. You take a certain taxi, a certain Uber, early in the evening and it costs you $20 to go. Then you take that same ride back later in the evening — say, on New Year's Eve or something — and suddenly it costs you $250. The surge is in effect, so the price can go up five, ten, 15 times, and people become quite shocked about it.
Uber has had problems with this also. As you can imagine, more people want to use some sort of taxi-type service in the middle of an emergency — so in the middle of a big snowstorm. In Australia, there was an example of a hostage-taking situation, and suddenly the price of getting an Uber goes up by 20 times. In New York law, New York City, it's price gouging. It's actually illegal, and Uber has gotten in a lot of trouble for this kind of thing, yet they insist on still doing this.
It's also led to driver attempts to manipulate pricing. There have been examples of drivers who figure out: "Hey, you know what, the only time we make money driving Uber is when there's a surge." So they all start getting together and saying: "Let's go down to the local Pizza Hut. We all log into the app and say we're here and available. We sit at Pizza Hut, and we all log off at the same time to have some beer, some pizza, and in about 30 minutes, the price is going to surge, and then we go out and we drive."
It's led to a lot of strange attempts to manipulate the market like this in ways that…. I, frankly, don't quite see what's in it for Uber, but they insist that this is still a better improvement on the pricing and market mechanisms than regular old supply and demand.
J. Johal: Thank you so much, Mr. Hill.
B. Ma (Chair): All right. We've got two more questions here and about four minutes left, so I'll ask you to keep your answers to the next ones as brief as possible.
S. Chandra Herbert: Mr. Hill, you suggested that a company like Uber, or Uber in specific, only is subsidized 50 percent by venture capitalists. Is that backed up by research or data? I'm sure it is. You've done your work. I'm just curious. I hadn't heard that before.
S. Hill: Yes, that is. I mean, I could send you, if there's a way to send, links afterwards. There's a website. I'm wasting time here by looking for it, but it's called Naked Capitalism. There's an analysis done by…. His last name is Horrigan. He goes through the numbers and shows why this is actually the case. Since these analyses have been out there, no one has denied it, including Uber.
In fact, this is why Uber is losing so much money. I mean, people don't realize it. This is a company that is just losing money faster than any start-up company in history. They lost about $3 billion in 2016. They're on track for losing about $5 billion in 2017. The final numbers aren't available yet, but that's what people are estimating.
The reality is that the more people use Uber, the more money it loses, because it's subsidizing every ride. This is the real problem that Uber has going forward, in terms of reaching profitability.
B. Ma (Chair): Thank you so much, Mr. Hill. For that link, you can send that over to the Clerk of Committees. Susan Sourial would have contacted you to arrange this meeting.
The last question is from me. I'm wondering, in the time remaining, about two minutes, are you able to maybe give us, in bullet-point form, any other regulations that you think that we need to consider that you haven't already covered?
S. Hill: Well, let's see. I'm just looking at my list here very quickly. No, I think I covered them. You know, regulate at the local level, or at least allow a local level option. Allow limits on the number of cars. Make them employees, or at least a certain core employees.
I mean, what you're going to see over time is that there's going to be a merger between traditional taxis and ride-sharing, as more traditional taxis start getting their app and more ride-sharing companies…. Lyft has already begun allowing drivers who don't have a car to rent cars. At that point, you're no different than a taxi company.
I think what you don't want are two sets of laws on the books for these two different types of services that are essentially the same. They're both essentially a taxi company. They just go about it in a different way. I think you want to figure out a way to allow this merger to continue to go on in a way that you don't end up with two different types of regulations on the books, because that just creates confusion for everybody, and it really hasn't worked out that well here in the United States.
B. Ma (Chair): Thank you so much, Mr. Hill. Just in closing, do you mind sharing with the committee where you get your experience from, in terms of ride-hailing, just because on our list it doesn't specify. I'm wondering if you can give us a little bit of your background and your relationship with ride-hailing. Where do you get your experience from?
S. Hill: Well, I'm a journalist, so I've been reporting on Silicon Valley and tech companies for a number of years. Then, here in San Francisco is where ride-sharing began. I've watched it grow and watched the problems develop and watched what people have said and have continued to write and research about this for publications all over the United States and Europe. I come at it as a journalist, not as a technology expert by any means.
B. Ma (Chair): Wonderful. Thank you so much, Mr. Hill. I really appreciate you calling in from so far away. I think that was very helpful.
S. Hill: No problem. Thank you. Good luck with your deliberations.
B. Ma (Chair): All right. I believe our next witness is the city of Fort St. John, and we're just getting them dialled up now.
Mayor Lori Ackerman, are you on the line? Is there anyone else on the line with you, or is it just you today?
L. Ackerman: Just me.
B. Ma (Chair): This is MLA Ma speaking, Chair of the Select Standing Committee on Crown Corporations. I am going to set a 15-minute timer for you to provide us with your presentation. That will be followed by a 15-minute time slot for questions and answers. Sound good?
CITY OF FORT ST. JOHN
L. Ackerman: That is wonderful.
First of all, I'd like to thank you for the opportunity to present these thoughts on ride-hailing in British Columbia. The questions that we are answering are the questions that were asked by the community: what are the impacts that ride-hailing would have on different communities across the province, and what regulatory regime should be established in order for ride-hailing to operate in B.C.?
First, let me concede that I have not used a ride-hailing service. In research for this presentation, some of my colleagues and acquaintances have. They were able to share their thoughts with me, but that was really their thoughts on the experience only.
I'd like to address the questions from the committee from a couple of different perspectives: social, economic, financial and regulation. From a social perspective, we have a society that is still working on driving only when safe to do so. Organizations like mothers against distracted drivers and the holiday RCMP roadblocks are bringing awareness to this issue. We have not got there yet. People continue to drive under the influence. When you enjoy a couple of drinks, you need a safe ride home. With the legalisation of cannabis on the horizon, the same need will only intensify the need for available, safe rides.
Often our disenfranchised and vulnerable citizens need access to rides for appointments or to get to a safe place. With Greyhound Bus Lines seeking to cut routes, this leaves many who live in these remote areas without public transportation — literally, out in the cold. So safe rides are needed.
The cost of ride-sharing is one that is, I hear, less expensive than a traditional door-to-door option for the user, so this would increase the availability of many who need a ride to take advantage of that, to do so. As a provider, this is something that, with all of the requirements for regulation in place, could be offered on a part-time basis, weekends, holidays or temporary upswing in demand without the cost of licensing cabs.
Ride-sharing impacts the traditional door-to-door cab services. A considerable investment of time and money is put into a cab company, and managing the requirements of maintaining those licences is similarly intensive. I believe that it's the regulatory environment that can help address a lot of these issues. In a nutshell, ride-sharing providers must be safe drivers that are kept safe while driving.
The list of considerations I have is by all means not exhaustive:
(1) Ensuring that safety standards required for the cab company are also required for the ride-sharing provider, and, perhaps, as the B.C. chamber has expressed, eventually phasing out the need for a class 4 licence.
(2) Ensuring adequate and appropriate insurance coverage is valid.
(3) Ensuring that winter tires are used in the winter season, not all-season or all-weather tires. They do not perform well at very cold temperatures, which we experience up here.
(4) All cabs companies should be allowed to pick up passengers upon being hailed at airports, hotels or other locations when not hired.
(5) The regulatory environment for cab companies must be reviewed for unnecessary red tape and inefficiencies that increase time and cost to provide quality service.
(6) Ride-share providers should provide their service through the app, with consideration being given to more remote areas with no on-line access for other methods of communication to request a service.
(7) Ride-share providers should be able to operate in the jurisdiction that they have a business licence for. With the interjurisdictional licence, they can provide services in that area of the licence.
(8) Police record checks must be required every few years. This service needs to be funded appropriately and should not be left on the shoulders of municipalities that fund policing.
(9) Any further regulatory burden placed on municipalities must be matched with like revenue.
While this may seem like an approach to public transit that is pushing the envelope for our province, this must be seen as an opportunity. First, it's not going away. And secondly, it could be seen as a neighbour helping a neighbour while getting their costs covered, a modern twist on an old practice. It's going to happen, so find a way to embrace it and bring it into the fold.
Thank you for your time.
B. Ma (Chair): Wonderful. Thank you so much for that. I'm going to open the floor now for questions from committee members.
All right. Is there anything else that you would like to share, Mayor Ackerman?
L Ackerman: Yeah. The cab companies here — I just experienced this yesterday trying to call a cab. I called 411, and they didn't have a phone number. They said the company name had changed. If I'd had an app that I could've just pulled up and used, it would have been remarkably more helpful.
I think that we really need to embrace technology, and we need to make sure that those who have invested in the infrastructure to offer these services to communities continue to do so. I think that the entire service needs to be reviewed, not just the ride-hailing aspect of it.
B. Ma (Chair): All right. Thank you so much, Mayor Ackerman. It looks like we did not have any questions from committee members. I appreciate your time today. Have a wonderful afternoon.
All right. It looks like we are now running a tad ahead of schedule. Our next witness is here. I'm going to call a ten-minute recess, just to allow them to….
B. Ma (Chair): Okay. There's been a suggestion that we shorten that recess. Why don't we reconvene at 2:25? That's seven minutes.
The committee recessed from 2:18 p.m. to 2:24 p.m.
[B. Ma in the chair.]
B. Ma (Chair): We have our next witness here — Dr. Thomas Ross from the UBC Sauder School of Business. I am going to set up a 15-minute timer, which you'll be able to see. The meeting format will start with a 15-minute presentation, and then we'll have 15 minutes for a Q and A.
T. Ross: That's good.
B. Ma (Chair): Just give me one second here, and I will press the start button now.
T. Ross: My students would like that ability to stop me.
B. Ma (Chair): Please proceed.
T. Ross: Madam Chair, committee members, thank you very much for this opportunity to speak. I want to make a few fairly simple points from an economist's perspective. Maybe you've heard many of these. I apologize if I'm repeating things you've heard already.
You probably do recognize that economists love markets. We think markets are great ways of organizing economic activity and generating wealth and prosperity for producers and consumers. But we also recognize that markets have their failings. They can come up short when they're beset by certain problems, which we sometimes refer to as market failure, as they could be due to poor information, to things like externalities — for example, pollution — or to market power.
When we want to address these kinds of failings of markets to make the markets work better, we sometimes turn to some fairly invasive, serious interventions. We sometimes use public enterprise and have government-owned entities making these decisions on public policy bases rather than for-profit bases. And sometimes we use fairly heavy regulation where we control prices, quantities, who can provide service and maybe control many other things — quality, things like that.
Since the 1980s, we have been retreating from these kinds of heavier approaches, in general — particularly in the transportation sector, with taxis being a remarkable outlier there. The reason for the retreat from both public enterprise and the heavier kind of regulation is that a lot of research and experience told us that these regulations or public enterprise were often costly, inefficient and not particularly innovative. And with respect to regulation, there was evidence that, in many cases, the regulatory process came to be what we sometimes call "captured" — that is to say, regulation evolved to serve more the interests of the firms regulated than consumers, the people that were meant to be served.
We have now, since the 1980s, privatized and deregulated quite a bit, like a lot of developed economies have. Sometimes the regulation kind of got stuck, and sometimes it got a helpful push from something we sometimes call "regulatory bypass." Sometimes participants in a market — sellers and consumers — find ways around regulations, and sometimes that then erodes the whole basis of regulation, and things kind of collapse and we find a new way.
For example — you all look too young to me for this — the period in the 1980s before airline deregulation. You might remember this, Dr. Weaver, where people would take buses from Toronto to Buffalo to fly to Seattle to take a bus up to Vancouver because flying in the United States was much cheaper. They had deregulated eight years earlier, ten years earlier. Canada was slower to that game, and that's what people did. Enough people started to do that that there was pressure on the government to do something.
A similar thing happened in telecom — phone calls getting routed through the United States, when long-distance calls were cheaper there, and looped back up to Canada. That's regulatory bypass, and that's a way we sometimes get out of a pickle that we're in with inefficient regulation.
Taxi regulation has been a little bit more difficult to deal with because of the medallion system that we've had. With this medallion or permit system that we have, the first person to get the permit basically has a right to a stream of profits that flow from that permit. That's all fine, but the problem is then that value of that stream gets capitalized into the value of the medallion. So while that first owner may have secured quite a nice economic profit from that, subsequent owners do not necessarily because they pay a huge upfront price.
I know the medallion price was getting into the hundreds of thousands of dollars, many hundreds of thousands of dollars, in Vancouver. They end up taking second mortgages on homes and things to buy their medallion, and then they need a long string of profits for many years to pay back that loan. So you have this situation. You think you're kind of protecting an industry and helping it get started, but then you're locked into a situation where the people in it really aren't doing all that well, but they've got a lot to lose if you take it away because they've got this asset that they've invested in.
It can be hard to break out of that. We call that the transitional gains trap. You think you're helping an industry, but you're really just helping the first generation, not subsequent. We have the same thing with quotas in some of our supply managed products.
I'm seeing the ride-hailing services, like Uber, Lyft, Hailo, as maybe being the regulatory bypass of the taxi regulatory scheme. It's clear that they're providing value-added services. Where these companies have been allowed to operate, they have often done extremely well. Consumers really jump to these services. Often you might think the incumbents could have done some of these things, but in their defence, sometimes the regulatory structures didn't allow them to be too innovative. It's probably also true that regulated industries don't have much of a history of being innovative, anyway. So where do we go now?
Well, it does appear to me that the market really does want these services. I think that's quite clear. I can understand that the medallion holders are concerned about the values of those medallions, but I don't think it's good public policy to hold up an important market innovation to protect a particular group of business people. Now, that doesn't mean I don't care about them. What I'm saying is that I'd like to help us shift to a more efficient system.
There might be a separate question about compensation to be dealt with at a different time and not by me. I'm mostly interested in getting us to a more efficient outcome. The transition there and whether there's need for some sort of compensation is another matter.
I would point out that the medallion purchase for taxi operators was a business decision that obviously carried risks. They should not have assumed that it would be an infinite stream into absolute infinity. For many of them, the early purchasers, as Vancouver grew, it provided very good returns. Now maybe the risks have turned the other way on them.
There will be calls, obviously, to soften the blows on medallion holders, and I understand that. But I also have quite a bit of faith in the taxi industry's ability to respond and to find ways where it can be competitive in the transportation sector. It is a different business model than the services like Uber, and there will be things, I think, that they can do better than companies like Uber if pushed to do that. You already see responses in terms of developing apps and things like that now and looking for permission to do that, which is a sign that there is creativity there if we let it out.
There will be calls to delay as part of the "Yes, we can go there, but let's take our time to get there." I think that would be unfortunate. I don't think we buy anything from delay except delay the benefits, really.
There may be calls to limit the number of new entrants, the number of drivers. Again, I would allow…. My preference would be to let the market decide how many drivers there needs to be. It may be that there's a crush of new people in, and that's not a sustainable number, and they'll drift back out eventually. I wouldn't be surprised by that at all. But I think we have to let the market decide that.
There will be calls to reserve some services for traditional taxi operations, like taxi stands, curb-hailing, hotel queues. I'd be cautious, although I think a lot of those are natural advantages of the taxi business model that they probably would get and be able to hold anyway. Just because, again, of a different business model, they seem to be natural advantages. Whether that advantages has to be actually written down and promised to them or not I don't know. It would be useful to understand the experience of other cities that have made arrangements to accommodate Uber.
It is important for us, though, I think, to keep the playing field as level as possible. I know that's something that concerns people in the industry. That is, we don't want to deregulate completely. We don't in any transportation sector. We would expect there to be requirements for insurance, for driver training, for vehicle quality and maintenance. You might have requirements for accessibility.
There will be requirements to provide certain protections for workers here, although again, I would urge you to be kind of careful, because part of the success of the model of these new entrepreneurs derives from its labour flexibility. To take that flexibility away might, in fact, rob them of many of their big advantages.
We will still need consumer protection with respect to…. You want consumers to have some right of recourse if they're badly treated. You want transparency to make sure customers aren't misled by the various practices of the firms. You want to make sure that to the extent, say, meters are used, we regularly check meters to make sure that they're accurate.
Those are really my main points. Just to recap very quickly, we do love the efficiency of markets. We understand that markets can sometimes underachieve, and we look for ways in public policy — and I work a lot in competition policy and regulation — to make markets work a little bit better.
With respect to the transportation sector, we've done that in the past through some public enterprise, like Air Canada and Canadian National — public enterprises at a time. We've done it through fairly invasive regulation of air fares and railroad fares and things like that, and who's allowed to enter and what routes they can serve and that kind of a thing.
We've generally gotten away from that, and I don't think there are many economists, at least, that would want to go back to those days. Not that everything's been perfect along the way, but I think that's the general feeling.
With all transportation, we're looking for ways to let the market dictate more what people want. Taxi regulation is one of the last vestiges of kind of that old-school regulation. Maybe it's been a little bit harder to deal with because of the medallion system, because you've got a lot of relatively small business people that could really be in a bind if the value of their medallion drops precipitously, and you've got to feel for them as a result.
Maybe that's made it a little bit more challenging for us to deal with. But I think maybe the new ride-hailing services have pushed us to the point where now we see a future. We see what these kinds of services can bring to us. I think we really need to embrace this opportunity.
That said, we don't deregulate completely. I mentioned the areas where we would want to continue regulation. Above all, we want to have kind of as level a playing field for the various kinds of operators as we can.
Those are really my remarks. I know I'm a little bit early, but I've tried to be concise.
B. Ma (Chair): No, that is fantastic. We like early. It gives us more time for questions as well.
J. Johal: Thank you for your presentation. It was very helpful.
You were talking about the medallions. That is the challenge that we have — that they've certainly grown in price, and there's a tremendous impact on small business owners. Can you think of any industry — or would you have known even in the taxi industry — where governments have gone back and bought some of those licences? I'm thinking back to the commercial fishing in the 1990s. I think the federal government came in and bought back some of those licences. A lot of commercial fishermen were impacted. I recall covering that as a journalist. Are you aware of any public body that has bought back taxi licences?
T. Ross: No. But full information here: I'm not particularly an expert on the taxi industry in the sense of having studied it or experienced it.
J. Johal: I understand that.
T. Ross: I know that has been talked about in many cities facing this same issue. They've also talked about surcharges on fees to ride-hailing services that would go into a pool. Was it Montreal that explored that? You probably have many more experts about that, about this here now — to compensate medallion owners as well.
I know lots of people are struggling with the question of how to get out of that. Again, my focus is mostly…. I think I see the future — I mean, what I think would be a nice future, if we could get to it. The transition there is not easy.
J. Johal: Should government head down that road?
T. Ross: Pardon me. Should it?
J. Johal: Should government head down that road in regards to some of the….
T. Ross: Okay. So this is a political decision.
J. Johal: Yeah, I know.
T. Ross: You have to balance. You have to say, well, on the one hand these were business investments that carried a risk. Businesses always face regulatory risk — always. There's always a chance government's going to pass some law that's going to hurt your business, right? They're going to run a road right by your idyllic landscape, where you've been renting cottages and things, and now nobody wants to rent your cottages. They're going to do something like that.
That's just part of a business risk that you take. Now, I think, in a case like this, you have to say: did government mistreat them in some way by leading them into these investments, or not providing them a proper opportunity to recoup the benefits of that, before moving to something — not due process, or something like that?
You'll have to struggle with that. It is a compensation issue more than an efficiency issue. It would be useful to know what people paid. I think some of the jurisdictions that have looked at this have talked about formulas for compensation based on: what did you actually pay for a medallion?
If you were one of the first people to get the medallion, and you paid $50 for it, just because it's worth $1 million now, maybe we won't give you $1 million — right? — because you rode that a long way. But if you just bought it last week for $1 million…. Mind you, you should have known there was trouble on the horizon, so you'd have to factor that in. But you get my point, right? You'd have a little relatively more sophisticated mechanism in mind to do that.
It's a business risk, but government is imposing it. It has a very harsh effect on some people, and it would not be unreasonable to think about some kinds of compensation for some.
R. Singh: Thank you so much. You being an economist, and you brought up the flexibility of when the ride-hailing comes in. We have heard from a lot of people that with ride-hailing, most of the people are doing it like flexible work hours, casual part-time jobs. What kind of impact do you see that that will bring to the economy? Will we have a sustainable economy, like with the jobs that we have now with the taxi industry, which are full-time, well-paid jobs? With this ride-hailing coming as casual, part-time, precarious jobs, what kind of effect will it have on our economy?
T. Ross: Well, it's a very good question, actually. In that sense, it's part of a broader transition in the economy for the people. Lots of different kinds of flexible employment, part-time employment, people working for themselves — it's the gig economy, as people sometimes refer to it.
Sometimes people look down on part-time jobs as second-class jobs, but for some people, that's exactly what they want. They want to blend part-time work, maybe two different bits of part-time work. Or they're artists, but they need a little money on the side to support their artistic endeavours. Or they have family issues, and they'd like to just work 20 hours a week or something like that. I think having the full variety of work options actually enhances the economic efficiency of the economy. In general, I don't see that as a problem.
A. Weaver: I have a comment that maybe you could help me with, to try to understand further, and then I have a question.
Really, the one problem that you've identified with this whole issue is the medallion or licence or plate holder and the value that it's perceived as and grown into winning that lottery card. To me, we should never have actually given licences and transferred the ability to resell that licence, to create a market when it's actually the government that owns the licence and gives the permit. It should have had to come back or been leased. That was an error.
Do you know other jurisdictions around there that have switched from the permitting system that we have now to one where the permits are no longer given but they're actually leased or loaned to the individual and must come back afterwards?
T. Ross: I believe that that has happened, but I couldn't — again, I haven't done an extensive study of the industry — name cities. But I do believe that that's happened. Your statement at the beginning, in my mind, is exactly right. We should never have gone down this path. Now, it would be interesting to reflect. So many places did it that you'd think maybe there was some driving force that made it seem like a good idea at the time. But in hindsight, it looks like it was a very bad idea.
We're in a similar bind with quota in supply management. It's very difficult to get out of. Our regulatory bypass event there, which might get us out of that, will be trade negotiations. It might finally kick us out of quotas and supply management. That might happen there.
A. Weaver: The other question. Do you think this would be a weak argument to argue to potential ride-share companies — that their introduction into B.C. has created an externality that they need to internalize? That externality is the effect, or the cost of doing business, on the medallion holders. Could you use economic language to justify a small levy on ride-share companies to assist those medallion holders because this is affecting them?
T. Ross: No, I don't think so, to be honest. You folks are the experts, but it has some political appeal. I don't mean that in any kind of a negative way, because you're balancing interests, and you've got to find something that people can live with. So I do see some political appeal in that.
A. Weaver: I understand. But you couldn't argue…. No. Okay.
T. Ross: It's not like a pollution externality, where you're actually putting dirt in the air or something like that. It's, in a sense, just a transfer of wealth from one pocket to another and, in general, going somewhere where the service is being delivered more efficiently — right?
S. Chandra Herbert: Thank you for being concise, Professor. [Laughter.]
A. Weaver: Yeah, this is actually remarkable. I told my colleagues that no academic…. I already warned them that when an academic is there, you're going to get five-hour lectures.
S. Chandra Herbert: Well, I wasn't going to name you.
T. Ross: I was trying, myself…. I looked at my notes, and I thought, "Well, this is like a half-hour by itself, so what are the nuggets?" and I took out a few nuggets. Okay, good.
S. Chandra Herbert: A question around externalities. Obviously, one of the things we've heard consistently has been that ride-sharing could lead to increased congestion and has done so in a number of places. Some will argue with that, but I guess it depends on the community. What would you suggest to deal with that externality?
T. Ross: Well I think the first thing I would do is wait to see if it happens. I do think it has happened. I've heard that before. I've been in a few jurisdictions where people have put me in Ubers, I guess, to send me places — in Chile and in Portugal. I have heard, talking to folks there, that in some places, there is a feeling that, at least for a while, it increased the congestion on the roads.
I think that that's very likely to be temporary, on two levels. First of all, it seems like a good idea to jump in the business, but after you've done it for six months, you might decide it's really not for you, and people will come back out. Some of the people in will just, on their own, drop back out because it really won't work that well for them.
I think it's also true — and I think, you know, sustainability people will say this — that what we would like to move to is a kind of a transportation ecosystem with lots of options. And the ride-hailing is a nice piece to add to public transit, such that people may forgo owning a car themselves.
The public transit misses the last mile. You used to say in telecom, the last 200 metres or something. Now in transportation, the ride-hailing can fill that in. But that's also going to take a bit of time. You need, like, my kids to not get a car because this whole system works perfectly well for them.
So I actually wouldn't do anything at this point. If it does look like your roads are clogged up after a couple of years of this, then you might need small licensing fees, but not medallions, — small licences, per-annum fees that might bring down the numbers somewhat.
S. Chandra Herbert: The other question to that. A previous presenter made the argument that the medallions came about because, at one point, the market had been deregulated, and basically everybody was trying to drive to try and make some money because they had a challenge economically. So governments of the day — I don't know if this is true; we'll have to do some history research — brought in a medallion program to try and limit the number of drivers so that their standard of living could go up and you wouldn't have drivers stopping you on every corner, honking horns, trying to get you in their cars. I don't know if you have any thoughts on that.
T. Ross: Well it's funny. When we used to do this old list of market failures, which I mentioned before, like externalities and bad information and things like that, sometimes people would put on the list "cut-throat competition," with the idea that competition got too intense. And sometimes references were made — it was anecdotal, more than any good research — to trucking, where the stories would go that truckers would actually start fighting each other — like, literally fighting each other for business.
This is like an extension of that. Maybe there are too many people chasing too few riders. I would like to think that we're at a point of our civilization, general levels of security and things, that we can manage that and that that is not so likely to be a problem. I mean, I guess it could be.
I know there are certainly areas now where Uber is trying to operate and the taxi drivers are not happy and don't necessarily treat them well. I'd like to think that's a transitional issue until we, hopefully, get to a new regime where everybody's got their niche and works on developing that. But, of course, if it got out of hand, you'd have to look at some kind of measure to deal with it. That's a fair question, though.
B. Ma (Chair): Thank you so much.
Any other questions from committee members?
Then I will throw myself on the list. It makes me a little bit uncomfortable to think that maybe we should, on the topic of traffic congestion…. Given that I represent the riding of North Vancouver–Lonsdale out on the North Shore, and our traffic congestion is already pretty suffocating, it does make me a little bit nervous to think about waiting it out for a few years to see if things get worse and then bringing in a measure to deal with traffic congestion. That's primarily just a comment, as a North Shore resident.
T. Ross: That's not unreasonable. I deal with the Massey Tunnel too, and I feel your pain.
A. Weaver: Pandora's box opened.
T. Ross: I need another 15 minutes. [Laughter.]
B. Ma (Chair): Luckily, not a committee on the Massey Tunnel.
You were referring to a new framework for taxis and ride-hailing, recognizing that the current framework is far from ideal. In this future framework, do you see ride-hailing regulation as basically having a different regime from taxi regulation? Or in this ideal future, do you see them as being the same?
T. Ross: As an academic, what I'd like to say is that I'd like to go away and study that question. We do have experience of a number of jurisdictions that have sort of made their arrangements with the ride-hailing services. I'd like to see what seems to be working better and what not.
My initial reaction would be, yes, probably the regimes would be somewhat different, but of course, the players would be allowed to participate in both if they wanted to, if it was really open. You could run a taxi as well as provide ride-hailing services.
The ride-hailing business model does seem a bit different. It seems to me that, for example, the insurance requirements would probably be different if someone's using their own car and only a few hours a week. It's a different kind of requirement. I mean, you still want the drivers to go through some kind of a check, a criminal record check, and obviously, have the right kind of licensing and driver training for that. That could be quite simple.
So there would be, I would think, a lot of overlap, but I would be open to the idea that the services would be…. Like right now, we've got taxis and limousines — slightly different approaches to those. This would be like a third — maybe there are already more that I'm missing — kind of personal transportation service that would have maybe a slightly different set of regulations.
The hope would be, though, that the playing field was still pretty level so that for similar kinds of businesses, the two types of operators would have a similar regulatory burden.
B. Ma (Chair): Seeing no other motions coming from my committee members about more questions, I'm going to let you go, Dr. Thomas Ross. Thank you so much for coming out today.
T. Ross: Thank you, folks. Good luck with this. This isn't your last day, is it?
B. Ma (Chair): We've got one more.
T. Ross: Is it tomorrow or is it…?
A Voice: Tomorrow.
A. Weaver: If you're concerned about Massey Bridge, I encourage you to mail lots of emails to them. Just leave me out of it.
B. Ma (Chair): I'm just going to bring order to this committee again. We're still on air.
I'm going to bring our next witness, from Ripe Rides. I think we're just going to take a moment to upload their presentation, so I'm going to call just a two-minute recess and then allow the banter to continue.
The committee recessed from 2:53 p.m. to 2:54 p.m.
[B. Ma in the chair.]
B. Ma (Chair): We have our next hearing. Presenting before us are three gentlemen from Ripe Rides — Mr. Mistry, Mr. Perrick and Mr. Goraya.
I have a 15-minute timer set up. I'll turn it around so that you can see it. You'll have 15 minutes to present to the committee, and then following that, we'll have 15 minutes for questions. Please proceed.
O. Perrick: Perfect, thank you. I'd like to introduce myself, Otis Perrick. I am the president of Ripe Rides. I'll give you a little background on Ripe, but first and foremost, I'm born and raised in Vancouver — my entire life. I am a serial entrepreneur.
Right now, currently, we have a technology gaming studio and transportation company, all based out of here in Yaletown. We employ 20-plus employees out of that studio. What we're going to be talking about today is a home-grown solution to technology. We also went into the foray of transportation.
Ripe Rides was basically an answer to what Uber was doing illegally in 2012. I travel a lot to San Francisco, spend a lot of time down there. There was this amazing thing going on, as transportation was changing. You guys have heard the Uber story, so I’m not going to get into that.
What I did find was, coming back to Vancouver, we needed more solutions. We needed more opportunities for people to get around the city. We talk about the first mile, the last mile, all sorts of things — also not just in the city of Vancouver but throughout the province. I mean, this is why you guys are all here today. You're not just representing one area, which is the downtown core. A lot of people probably have talked about just that.
Ripe Rides here was granted…. We went after, basically, a licensing model that would be similar to Uber — so the ride-sourcing, the ride-hailing or the ride-sharing, depending on how you wanted to look at it. We went for what would be regulated, understanding the model with the PTB, the board, and working with the branch as well.
Over a period of four years, we were able to secure 20 licences. These licences were special authorization limousine licences. I'm emphasizing the limousine aspect because that's what was approved. I'm going to get there in a second — how that happened.
We had applied twice. Opposition was incredibly strong. The taxi association threw all their might — all their lawyers, everything they could — at us. We had the three-day hearing. They did not want to see change. As we know, a lot of the problems come from not wanting to have change, whether it be in the city or elsewhere.
We fought through all that, and we were able to prove ourselves out. We were able to secure because we went through the proper regulations, we went through the proper application, we got the proper insurance, and we hired drivers that were not under contract but were employees. So we went and did and ticked everything. Not only did we have the safety with the RCMP and the VPD — again, we can go into all those smaller details in a second — but we went through the proper procedure. That took four years. We got licensed in 2015.
When we started building the technology, which we built here, a lot of things had changed from 2012 to 2015, so we adapted and we made some changes. The one thing that I will point out is we are the only company that had to do a third-party approval on the technology. So not only did we have to submit it to a company in Boston and have them go through it, unlike any other transportation app that is available in Vancouver…. None of them had to go through it, which brings to fact that much of it is non-licensed mapping — because if Google gets word of unlicensed mapping, there are big fines.
We went through all those procedures. Again, we followed what were the governmental procedures. Moving forward on that, what we did is we became operational with these…. Basically, we used a Cadillac, higher-end car, based off of what we saw as the part of the door to open. That was: we provided the software, we provided the cars, and we provided everything that goes with it, the drivers included.
Things were going incredibly well. What we saw was ICBC step in and say: "Lookit, you're a taxi." We said: "Hold on. We're not a taxi. We got authorized as a special limousine." That changed our insurance rate by 400 percent. Now, we continued to operate as a start-up company, going from basically — and Ricky, correct me if I'm wrong on the insurance amounts….
R. Goraya: From $600 to $2,800 per car, per month.
O. Perrick: You can understand that as you're starting a company, that's a big hit.
We, at that time, also started to look…. We're hearing that the taxi companies were very upset with us when we were launched but saw what we were trying to do. They wanted to position us against Uber. Again, we did no stance against that. We believe there is a need for another transportation option.
We went and applied for 150 open licences, if you would. Basically, these licences would not be restricted in a zone. Prior to doing that, thinking that we could part the sea, we invited all the representatives of the taxi association, the taxi companies — many, again, who have spoken here — for a meeting and presented what we thought would help. Why would it help? If we had us all together, going in one direction, we could help solve some of the problems.
I hate to say it. That was a waste of my time, because none of them can get along. All they were worried about was the money — the argument, the licensing and that I owned the technology. That was a really big deal for them.
Again, toss that out the window. We continue to forge forward. We went after the 150. That was denied. At that time, we saw an election happening. So basically, at that point, we paused on the 150, and we paused our operations because we had to see what was going to happen. We couldn't keep losing the money that it cost us on insurance. That was our biggest thing. That's where the company is as it stands right now. It's in a paused state.
What we do have, and if we continue on here, is to give you some of that background on Ripe — what it was for the Vancouver market. Again, it went through all the regulations. It was a new product. We provided a vehicle type. At this point, it was a service and a type at a higher end. Again, those costs and pricings, charges, were dictated by the PTB. We couldn't say that we were going to come in at a lower rate than taxi. We couldn't say that we were going to be above a limo. We went in at a rate. We got approved at that rate for that business model.
Availability? It was on demand. So just like you've heard, all technology. You could see your car coming to you. You had an estimated wait time. You had receipts. The safety that goes along with it. All this is tracking. Your phone has a camera on it. They talk about cameras being able to see the passenger. Once you hit start, you can take a picture. So we don't need hanging cameras. Again, all the information is captured on the app. There's a cashless transaction as you go through all those kinds of things.
The customer base was growing. The support letters that we had from big corporations — Ledcor, Lululemon, Telus, Electronic Arts and so forth — we can provide. The big thing that we had here, though, is that we took expert analysis from Dr. Gillen from UBC as well as Dr. Jan Kietzmann from SFU. We have those reports, and those reports helped us drive and continue to drive our business model. We can make those reports available to you guys. The board does have that, and any kind of freedom of information can make all that available as well.
I kind of sidetracked here. One of the things that we continue to talk about is that…. I've got about seven minutes here, and I want to make sure that we cover as much as we can. It's not just the current government — it wasn't just the past government — that talks about the affordability moving throughout B.C.
Everyone has tried to urge the taxi companies to come along. What the taxi companies have told me, in our three-day hearing, is that they're good at transportation, and I should stick to technology. That is true, if you've ever used one of their apps. They should just stick to transportation and let us stick to the technology. Not only that, though, what we've seen here is…. This is the problem. Every time we have, as I said earlier, invited them to the table, they don't want to come.
Am I about regulations? I agree. We should have a regulation. Whether it would be ride-hailing, ride-sourcing, however you look at it, have it be a competitive market. I heard you talking about medallions. I could go into hours of conversation about how New York has a great idea there where they have to put it into a raffle of sorts. There are free and equality ways of doing this stuff.
For us, it is…. We went through the regulations. We're a proven technology that worked with the past government, and the only reason that we got stifled was because of…. ICBC came to the table and said: "We can't work around this because we have to change the legislation. We can't change the legislation because there's an election coming up." We were caught in that pendulum swing where we couldn't operate because of ICBC, even though they wanted us to work with them. So that's where that pause came from.
For us, when we talk about it, we are about the safety. We're about transparency. We're fine with the aspect of regulation. It's because of what we went through.
Simple safety. You want to talk about the cars. One of the things that we had to do for our drivers…. Before you even signed on, you had to go through a whole safety checklist. It wouldn't allow you to get through the car. You had to go around the car and check everything. These are things that homegrown technology, not just a mass market technology…. We can cater to what is needed. We're all about free and fair competition as well.
When we went at this application in 2012-2013, again, we had a lot of push-back from limousine companies and taxi companies. What we said to the limousine companies was: "You can make your own. Come in at the same prices we are. Do everything that we're doing and apply for it." Again, that's part of what we had done and what we had said.
One of the things that we also had gone to the branch with was that these gypsy limos, if you would…. I'm kind of jumping over here. You see them. They may come in from Maple Ridge and drop somebody off for a concert. Then they've got two hours to kill. They're just picking up people in this area.
You can regulate them and put them into a simple system where they can log on and actually make some more money. They don't have to do it illegally. Again, it's a cashless system. There are ways of doing it. Again, we've proven it. We put it out there .We had a model that worked. We just had some issues with part of the insurance side of things.
Basically, if we go through it…. What we've talked about here is that it is a made-in-B.C. solution. I'm glad that I keep hearing this because this is what we started saying in 2012. I will get off my soapbox in a minute, but what we want to talk about is showing you guys that we're not here to stifle what's going to happen. We're here to prove that it can be done in the current system, but there are some changes that have to be made.
We believe that we already have the software. Whether it be able to launch right away, of course, as a turnkey…. But on the flip side of it, too, is it should be adjusted to meet the needs that we see, the consumers. We also believe there has to be a demand for what we see. There is a demand.
Early on, we heard from the taxi companies telling us why they pushed against us. There was no demand for what we wanted. Within a month of us getting our licences, huge demand. We need a whole bunch more licences. Again, they're against change, where Uber is all forward-thinking.
I think we have to find, in the middle…. We were able to come through in the middle and prove that it can be done through the government, whether it be the last government or the current government or the future government, however you want to look at it.
In conclusion, we're happy to share any of the reports we have from our experts. A lot of this stuff has already been made available through each of the governments already and the Passenger Transportation Board.
B. Ma (Chair): Thank you very much.
All right, we will jump right into questions. The first one is from Mr. Chandra Herbert.
S. Chandra Herbert: Thank you so much. It's exciting to hear of your work and what you've done so far. I think one of the questions that I always wondered was: why hasn't anybody done it before? Well, you have, so it's useful to have your testimony here.
There are two questions I've got. One is around the insurance. You said that's a challenge for you, if you were to get it going again. What would be the ideal fix for you on the insurance? That would be my first question. The second one was really: are there any other things in our regulations or current existing laws — aside from the Passenger Transportation Board having to approve, obviously, you getting more licences — that would stop you from going again?
O. Perrick: Let me unpack that. I'll jump on the insurance, and I'll pass some of the regulation on to these guys. We've worked with HUB International for the last few years on trying to figure out a way. What we've seen is what Intact had done in Alberta — basically, the time of activation, changes to your insurance rates and what we've seen there. ICBC — again, I can't tell you I know anything inside those walls. I don't believe….
A. Weaver: I don't think anybody does.
O. Perrick: What's going to happen there, though, is…. We can't have a chartered bus, a taxi and a limousine and nothing else. That's what happened to us. We essentially came in as a limousine, as we were licensed to be, approved to be, and then, within four months, just changed.
If you go through the regulations, it says: "You need a top light." And it was like: "Wait a minute. That's not what we were approved for." What we can see for change is that there has to be change in legislation that is up to date with transportation needs. ICBC can do it. Obviously, a third party can't.
N. Mistry: I was just going to add on the insurance piece that there are not enough categories. It's too rigid. The reason that we shifted from…. Even though our licences clearly say, "authorization, special authorization limousine," because we were a time-and-distance service, it grouped us into taxis. Based on the nature of our service, that turnover…. We don't turnover as much as a taxi, so it became a huge blocker in our ability to continue operations.
O. Perrick: And to add on that: why? Because we were offering a more luxurious service. The technology can do it at any level, but it was a luxurious service based on the type of vehicle and the cost that we were charging.
Do you want to talk about some of the regulations?
R. Goraya: The only regulation I see here…. Just to add up the 150 vehicles that we applied for. After getting the sedan service — which was like Cadillac, more luxurious — we thought we should come to the taxi business. We applied for…. As all of you know, you have to add up to a PT Board to apply for licences. We applied for 150. The only thing that we needed from the PT Board was that instead of restricting us to municipalities, give us the whole Lower Mainland or provincewide.
If PT Board gives us that regulation, we can still operate in the existing regime. We're not here, like Uber, to change everything — like change this, change that one. Just to let you know, of that 150 vehicles, there were 27 wheelchair-accessible cabs, so we are ready to accommodate those people as well.
This application — 404-16 — was made in February, and we were rejected in August, with the decision that there's no law like that. The thing that we were asking for doesn't exist.
S. Chandra Herbert: The boundaries?
O. Perrick: So that's the regulation, and the fact is that it doesn't exist. We broke it the first time, 3½ years to get it done.
R. Goraya: But having said that, like with Uber and taxi companies saying, "Change this; change the whole thing," we have operated, and we can still operate in your current system, with wheelchair-accessible cabs, with everything that you're looking for, from congestion to commercial inspection to green cars — everything: drivers or TaxiHost 1 and 2, driver class 4. We can do everything that you guys are looking for and still operate as a digital dispatch company.
Just to let you know, we operated for almost 1½ years, did about 10,000 trips and never did surge pricing. There is no such pricing in our model.
O. Perrick: To add on that, it doesn't have to be as us as an operation. We can supply the technology. Whether it be multiple companies supplying technology, again, I leave that to you. I would suggest not. But supplying the technology, you can have multiple people having those vehicles. You can dictate that it should be those types of vehicles.
Again, it comes to you guys. We choose the vehicles because we were the operators as well as the technology.
S. Chandra Herbert: Just one more. My colleague from Delta North asked me to pose this question. He couldn't stick around. One of the earlier presenters argued that Uber gets 50 percent of their costs subsidized through venture capitalists, so they're allowed to lower the cost that they charge to the consumer as a way to try and gain market share as a loss-leader, shut out other businesses and so on.
Would that be a concern to you? Some have suggested there should be local preference. Some have suggested that we should look to local, made-in-B.C. solutions first. I know some — I think Austin, Texas, is one example — where they tried to do that for a while before allowing Lyft and others to come in, I believe. I don't know the story completely. Any thoughts on that?
R. Goraya: Yeah for sure. We all are here to make a competition with the taxi industry and TNCs. The only reason why Uber can get that kind of pricing — the gentleman who was here earlier than us — is because they are losing $3 billion, $5 billion by subsidizing rides.
The other thing why they can give cheap rides is because they're not following any rules. For example, insurance. The cap is $1,200. For $200, I can for sure give you rides that are cheaper than taxis.
The other thing, if you want to have equal ground, like if we are talking about competition. We are ready for the same prices as cabs. We are ready to go through the same…. For example, green cars, that taxi. We are ready for our drivers to go through TaxiHost 1 and 2. We are ready for our drivers to go through a criminal record check done by VPD or RCMP.
We are not asking for surge pricing. The gentleman yesterday talked about surge pricing, and I know you are all concerned about it.
He told us about surge pricing. There was a power blockage in Toronto yesterday, and a ride which was normally $32 was $110 yesterday.
The thing with surge pricing is it always goes into effect at one o'clock at night, when you can't make good decisions — when you are drunk or when there's a disaster or something. In our model, we want government to dictate prices, and we will follow that.
O. Perrick: Just to add on that, I mean that becomes an operator's decision on how they want to do it. It should come from the government — what charges and how they should be…. If surge pricing is part of what is going to be instilled, then that can be done. It should be regulated, though — when and how and where and based off of volume. That's fine. That becomes up to you guys. It should not be up to the operator or the technology to say: "This is what it's going to be, when it's going to be and where it's going to be."
A. Weaver: Yours was a very exciting innovation that, unfortunately, wasn't able to take off the way it should have. I don't know. Did you see the private member's bill that I put in three times? It did actually empower ICBC and require them to put in a separate insurance component for TNCs. You're sort of somewhere between TNC and taxi, but presumably, that class would have worked for you.
The issue and the question I have here is: do you see yourself as a taxi company or a ride-share/ride-hailing company? The reason why I say that. You came up within the system. You were squashed down by the pressure from the taxi industry, but you are very much doing that sort of model. I mean, an innovative taxi company would have taken…. Vancouver Taxi would get together with North Shore Taxi, use Kater, and do exactly what you're doing. You're following a fixed number of cars, a fixed number of licences, fixed prices, app-based, point to point, your drivers. They're hired.
How do you see yourself fitting in this spectrum from TNC to taxi to limousine? I can see you being viewed as more of a threat than, say, an Uber or a Lyft, because you are very much following that model.
O. Perrick: Yeah. I think there are two pieces to that question. The first is that, yes, we were definitely viewed as a threat to them prior to coming into fruition and where we are. We see ourselves as a technology company that has a transportation operations arm. Sitting here, I represent the technology company. The operations aspect of it, again, is a pause, based off of what comes out of it.
We have experience to provide to you guys of what happened, how the regulations went and what needs to be done to change them. At the same time, do I sit here where I see…? You have to think to the future. What I mean by that is: this is just the start of where the technology is going.
The autonomous car is coming, so how are we thinking forward to that? My personal is that this is about the technology. This is about now, so the growth strategy for Ripe is: where is it going to be? I'm not just going to say that I'm a taxi competitor in the taxi business with a limousine. No, no, no. We're a technology company that has an operations aspect that had operated. We're here to provide that feedback.
Do I see us as a threat to the taxi business? Of course, because what we can offer is something that is a threat to them, based off of our technology, which is much more superior to anything that they have implemented, tried to implement and continue…. Hence, why, in our meeting, all they wanted to know was how they could get a part of it and why we would make money off of anything if we brought them all together on one app. Like I said, they did not want someone with our background profiting anything from something that they thought they should own.
A. Weaver: That's critical: threats are what drive innovation. If you perceive a threat to an existing model and you crush it, you're essentially crushing innovation.
My goal, my dream, would be to see a regulatory environment come out of this approach that would enable companies like yours to find your niche, glow, challenge the best of the best. If you survive and you take market share, great. It's the new economy. If you don't? Great ideas — another one will come along.
O. Perrick: I think, based off of what you guys are talking about here, it doesn't have to be just the company. You can have individuals.
An individual can start a company with three or four Priuses and use the ability to jump onto a white-labelled technology, such as ours — again, that has been approved, that went through the system and is available.
That's versus someone who puts their hand up and says: "We can build it." Or: "This one already exists." It's a multinational, and all the revenues and everything generated, including all the information, is somewhere else.
One of the things in a lot of our discussions — whether it be the City of Vancouver, Surrey at its growth, even going up and down the Whistler corridor — is that there is information that can be gathered to help us for future planning, for infrastructure, based on where people are going to be moving. Again, because it's a homegrown opportunity, you're going to have access to it. So again, we can dictate that into it. You're not going to get that from the multinational billion-dollar company. They're going to tell you where to go.
That's why what we have always said to anyone we work with is that we're here to partner, and we're very transparent with what we're doing, because we believe in B.C. We're B.C. entrepreneurs, and we're here to service that.
B. Ma (Chair): Were there any other questions from committee members?
All right. I have myself on the list then.
I was very impressed by your presentation. I really appreciate the fact that you shared with us your attempt to actually go through the current system. What we heard from a lot of companies was that they're ready to go, but they haven't attempted to do anything because they don't like the system that's in place. Recognizing, of course, that the system is far from perfect, it was actually very nice to hear of a young, innovative group, like yourself, that saw an opportunity and did try very, very hard to work within the regulatory regime that already exists.
Now, having said that, it does sound like you are more of a supercharged taxi company with a fantastic technology app, which is interesting because what a lot of consumers — when they think of Uber, when they think of Lyft — are really thinking of is the convenience that comes from the technology app. There have often been questions like: why not just have taxi companies who have really good apps? That kind of sounds like what you've landed on here.
So a few questions to elaborate on to find out a little bit more about your business. Do you use any personal vehicles in your business? I'm seeing heads shake.
O. Perrick: The current business as it stood, with the 20 licences, was all vehicles that the company owned. To clarify, the 150 that we were applying for — we were looking for an owner-operator model.
Again, to exactly your point: we should use the technology. We're the technology provider. But we're going to help get through and be able to say: "Look it. You become an owner-operator. Here's your business plan. Here's your model." Almost like franchises, right?
B. Ma (Chair): Yep.
O. Perrick: "And here's what you're going to go off of."
Into Ricky's point earlier, those are part of the pieces that the PTB says: "Well, hold it. Wait. Wait. We're not comfortable with this."
This is also — and I may have cut you off, and I apologize — to the point of why we try to get all the taxi companies together and say: "Look it. Don't look at it as a competition. Don't worry about what we're operating — these 20 electric vehicles. Just simply look at the technology, and let's work together on it."
Because it can go to any municipality. You can simply start and say…. I'm up on the Sunshine Coast quite a bit, and you can see people that may have gone for a drink. How do they get home at five, ten miles away? Again, it becomes a technology play.
B. Ma (Chair): All right. Now, in terms of the insurance model that you feel is missing in our current regulatory regime, can you describe in a little bit more detail exactly what is missing? What's the insurance product that's missing?
R. Goraya: Sure. There are only, like, a few. If you see, it's a big Crown corporation. But when it comes to insurance — and we have gone through that — there are only three lines written there. First line is you can be a bus, if you give a price, like, from point A to B — a fixed price. Second is a limousine, if you do hourly. And third is a taxi, if you do time and distance.
If you ask me, my personal opinion is we can still live in the current framework. We can exit time out of it. For example, if we do the 150 licences that we applied for, we can subtract time out of it, and we can have insurance which we can live with — like, the blanket insurance that we were talking about yesterday. That can be done. But again, if it is done, it should be for everybody. It should not be only for TNC companies. It should be for taxi companies as well.
We have always been….
As Otis said, we are not in competition with taxi industries. If we are saying that we want multi-municipality, we welcome the taxi industry. Give them multi-municipality as well. I think most of the taxi companies outside Vancouver have been looking for that, I think, for the last decade or two. We are totally comfortable with that.
We are not here to crush. It's not that we want to crush the taxi industry and base our business on them. We are all ready to play with them on an equal playing field. As far as insurance, we can still live with the present insurance if we are given the time subtract out of that.
B. Ma (Chair): In a lot of my line of questioning with previous companies, I've been trying to understand what the actual gap is in our legislation.
It seems to me that there are sort of two possible gaps. It might not necessarily be in line with your company, but I'm talking about the Ubers and Lyfts that use the personal shared vehicles and the independent drivers. One appears to be the insurance regime to allow the use of personal vehicles occasionally as commercial vehicles. The other option, if you don't go with that, is this blanket insurance that then goes through the dispatch service. That would basically be regulating of the dispatch service, as opposed to what we currently regulate, which is the driving.
It seems like those are two potential ways to go, in terms of the actual car ride-hailing that Uber and Lyft do. What are your thoughts on those two?
O. Perrick: First, as far as the technology goes, we have to carry a certain amount of liability insurance. There's the insurance because of privacy laws, cyberattacks and all of those. There's an insurance that is inevitable, which also covers, as a blanket, some of the vehicles and pieces that we do there. We also, at that point, went and got a $10 million coverage for each vehicle, its driver and its occupants inside.
The problem that we were having, as Nitesh and Ricky have said, is that there was no gap, as you were referring to, where we would fall inside the TNC. It was very strict in how it's written. If we're looking at where there is a commercial aspect, "Today I'm using my car; in an hour from now I'm going to go pick someone up on the way home, and I'm covered with that commercial insurance," my understanding is that's what Intact is doing. It's working quite well in Alberta. If ICBC can wrap their heads around it — my understanding is that they're looking into it now — then that's probably the best insurance. That's an opinion based on us operating.
What we would have done if we hadn't paused — this is definitely a consideration on the operations side — is that I would get rid of all the vehicles and simply say, "Here's our licence, here's a licensing fee, and here's what it costs to run the app," and basically have an owner-operator system on the current vehicles we have. It is very similar to exactly what the taxi industry does right now. As we say, there are parts of that in their business that works, right? It's the fact that they don't want to embrace the change with the technology that's going to allow more opportunity and options for Vancouver.
I don't know if that answers it.
B. Ma (Chair): I think so. I think I have one last question.
Again, you do fall into this very interesting realm where you're a taxi company with the benefits of the ride-hailing technology. We've been talking, as a committee, a lot about a separate regulatory regime specifically for this tech-based ride-hailing with the use of personal vehicles as commercial vehicles.
If we were to create two different regulatory regimes, it almost sounds like you would fall more into the taxi regime than this new regime. I'm wondering: how would that impact your business? Does that give certain companies a market advantage over yours, as also an upcoming technology company?
O. Perrick: The operation side, again, is paused because we're waiting to find out what happens. Will that affect us? It'll only affect us based on what you guys do. We are the technology, right? If there is an arm that's going to be dictating and watching how this technology is built and what needs to happen, then yes, we have an arm up on everybody, because again, as I said, we're the only company that got third-party approval because it was dictated to us, through the board, at the time of providing us our licences. That alone is the first step that put us ahead.
I can go into the basis of the technology and why. I mean, if you talk about downtime, you know — 99 percent up. I think it's 99.9. I mean, we weren't down. If you look at service and everything that we provided, our service was top-notch. Our ratings, in the short window, compared to the ratings of any of the taxi companies, probably in the province…. I only usually look at Vancouver. It's dismal. To me, as a tech entrepreneur, when I have people come to Vancouver that I need to get from one place to another or help them, it's embarrassing — our taxi technology and service. Service is a huge thing. But again, we're not here to talk about that.
B. Ma (Chair): All right. Anybody else?
I think that you are off the hook. Thank you so much for your time today.
O. Perrick: Thank you very much. We appreciate all your time. I appreciate you guys getting together and looking at this. It means a lot.
B. Ma (Chair): That concludes our witness hearings for today.
This committee will be adjourned until tomorrow morning at 9 a.m. Do I have motion to adjourn? The committee is adjourned.
The committee adjourned at 3:31 p.m.
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