Black sedan service hits regulatory speedbump

Limo drivers who use Uber app required to charge a minimum of $75 per hour
Uber's Andrew Macdonald says his company's private car service fills a niche in Vancouver

Limo drivers in Vancouver who use the Uber app to drum up business have been ordered to bring their fares in line with rates established for limousine services or risk fines or losing their licences.

The Passenger Transportation Branch (PTB) recently met with six local limo companies and pointed out that if their drivers are generating business through Uber and charging less than $75 per hour, it's a violation of the carrier's licensing conditions, and that they could be fined or even have their licences yanked.

"No fines were issued," said Dawn Major, PTB director and registrar. "It was just a warning that they can have their licences rescinded if they don't comply with their licensed rates."

Uber operates via a smartphone app developed by San Francisco entrepreneur Travis Kalanick that allows subscribers to order a luxury car for not much more than they would pay for a taxi. The driver finds the user using geolocation, and the user is automatically billed by credit card.

All drivers using Uber in Vancouver do so with the permission of the limo companies they work for, according to Andrew Macdonald, Uber's general manager for Canadian business.

Even if drivers are moonlighting, the limousine company is responsible, because they, not the driver, own the licence.

Macdonald said Uber is still being offered in Vancouver, but at $75 per trip, fewer Vancouverites will be able to afford the service.

"The result of raising the price on a product like that is that you're limiting it to the super wealthy," he said. "Most people don't have $75 to spend on a 15-minute trip."

Uber has been operating in Vancouver in stealth mode for the past few months (see "Ride-for-hire alternative enters market" – issue 1195; September 18-24), but already has an impressive social media fan base here, which the company has recruited to lobby against regulator pressure.

Uber recently began circulating a petition among its "VanUber" followers asking them to write Premier Christy Clark, Mayor Gregor Robertson, the PTB and Transportation Minister Mary Polak, urging them to "abolish taxi protectionism."

The petition has been tweeted by HootSuite founder Ryan Holmes, among others.

City hall will be involved, however, in the approval of new taxi licences to address the weekend cab shortage in Vancouver that gave Uber some of its momentum. The licences were approved by Passenger Transportation Board but Major said they must also be approved by city hall. Under the conditions of licensing, limousine services in Vancouver must charge a minimum of $75 per hour – and, as far as the PTB is concerned, what Uber provides is access to a limo service.

"We just don't feel like the way the market is regulated right now considers the consumer at all," Macdonald said. "It's very focused on existing industry structures."

The taxi and limousine industry is heavily regulated, with regulators establishing how much they can charge and where they can operate.

Taxis are considered a vital part of the transportation system, so the rules for them are different than for limousines, which are considered a luxury, not an essential, service.

Major pointed out that Uber is welcome to apply for a licence as a niche service but so far hasn't gone through the established regulatory channels to do so.

Uber is now operating in more than 20 markets – including Europe – and faces similar problems with regulators in other cities.

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