One of the most difficult issues any city faces is regulation of the taxi industry.
Evidence shows that pure deregulation of this industry rarely works in the developed world. In addition to making it difficult to protect the safety, cleanliness and effectiveness of the system, the economics of supply and demand can result in a system where it is difficult for drivers to earn any money, so they exit, resulting in fewer cabs than before.
But most cities also struggle with the nature of regulation. Whether cabs are restricted through knowledge tests, as in London, England, or through the number of plates, as in most North American cities — from New York to Calgary — cities are always trying to improve the system.
Calgary is no exception. While the taxi system is, for the most part, safe and reliable, there are many areas in which it is underperforming.
Many drivers are concerned about their safety and a system that sometimes seems tilted against them in favour of taxi brokers who run the dispatch companies.
Further, many taxi licences (or plates) are owned by people, including brokers, who never actually drive a cab, but sub-license to other drivers, who can then have the plate taken off their cab at any time for any reason. This happens despite the fact that these drivers have to purchase and outfit the vehicles themselves. No wonder many drivers are afraid to speak out.
Earlier this year, one broker even chose to voluntarily cease operations after allegations surfaced that it illegally sub-licensed its plates. Don’t feel too bad for the broker, though. Its shareholders will be transferring their more than 50 plates at a good price (estimated to exceed $100,000 per plate).
Passengers, for their part, are mainly concerned with the availability of service, particularly for those who need cabs late at night on the weekends and for people with disabilities (for whom taxis might be their only reliable form of transportation). Fixing the system, then, must help these two groups of passengers.
Isn’t it reasonable that Calgarians should have taxi service available when and where they want in our city?
When passengers complained they get busy signals when they call dispatchers, the brokers indicated that drivers refused to drive at peak periods. Drivers, for their part, claim that the brokers have simply not invested in their dispatch systems and don’t have enough people to answer the phones. Drivers tell stories of waiting an hour or more to be dispatched while passengers are desperately trying to get through.
City council had to fix this. And the solution begins with a whole new regulatory regime — one based on actual data.
Since cabs have GPS units and smart meters already, we are now requiring that all cabs in Calgary, starting next year, share this data. We will know how many cabs are on the road and accepting fares at any given time, and we’ll know where they are in the city. This will help city council make decisions about future allocations of taxi licences.
We are also requiring brokers to abide by benchmarks based on industry standards that have been common in call centres for many years, but have never been adopted here.
Finally, we are releasing the first new taxi licences in many years, but these are different than in the past. The person to whom the licence is issued must personally drive the vehicle at least a specified number of hours per year. The cab must be on the road (whether driven by the owner or another qualified driver) during peak periods late at night on the weekend. The vehicle must be wheelchair accessible. And the licences are non-transferable, so they can’t be transferred for hundreds of thousands of dollars the way current plates can.
This is not the same as the system now. These new drivers will operate under different rules than existing drivers. But the new rules still allow for both drivers and brokers to make an honest living, and I anticipate huge demand for the lottery to allocate these new licences.
It’s reasonable for Calgarians to expect a high quality and reliable taxi service as a transportation option in Calgary.
By moving to a new system of regulation, one based on good data rather than anecdotes and empty promises, we can and will make the system work better.
Naheed Nenshi is mayor of Calgary. His column appears monthly.
