Uber may pull out of Mississauga, but the status quo can't last forever

“How far are you going?”

This question, asked through the (barely cracked open) window of a taxi with all of its doors locked, would be repeated by two more cab drivers until one was finally satisfied enough with our answer to let us in, graciously agreeing to transport us a short distance for a “flat rate” that was “only” five times what the metered rate would have been.

This was after a sold-out concert at Sound Academy in Toronto, a transportation no-man’s-land where trying to get a cab could feel like participating in The Hunger Games. Calling one was futile – you had no idea when they would arrive (beyond the vague “5-10 minutes” that they always quoted), and any other concert-goer could snatch the cab meant for you – while hailing one on the street meant relying on the whims of the driver, often leading to the experience described above. Sadly, this isn’t an unusual occurrence – a series of “short fare” refusals may have contributed to the shooting death of a 26-year-old Toronto woman outside Muzik nightclub last summer. 

This was mostly pre-Uber, of course.

 Now, you would be hard-pressed to find a taxi that wasn’t on their best behaviour. The incidences of fare refusal, credit card machines that mysteriously don’t work, “flat rate” extortion, and other unpleasantness have gone way down since the introduction of a little competition. To be fair, these are mostly Toronto problems – Mississauga’s taxi system serves the city well and with far fewer bad actors.

Ottawa has recently introduced a regulatory framework that allows Uber to continue to exist, while Calgary recently saw Uber suspend operations due to what Uber believes are onerous and overly burdensome new rules. Toronto and now Mississauga are both attempting to introduce a framework for regulating ride-sharing options like Uber, but they seem to be leaning more towards the Calgary route, and Uber is threatening to pull out. With all the rhetoric flying around, it’s worth taking a step back and trying to understand where all sides are coming from.

What is Uber?

Uber is a mobile phone app that lets you request a car to take you from Point A to Point B. There are a number of different tiers and car types, but when most people talk about Uber, they mean UberX, which is a regular person using their own car to drive people around for money.

So it’s a taxi?

Yes and no. Uber is functionally the same as a taxi, but they don’t abide by the same regulations that taxis do, which is why taxi drivers are so upset.

What kinds of regulations?

Taxi licences are limited by the cities that they operate in, whereas Uber can theoretically put an unlimited number of cars on the road. Taxis are also required to have special insurance, background checks, driver training, and meet specific vehicle inspection/maintenance requirements. Uber has its own background check and vehicle inspection/maintenance rules, but some consider them less onerous than what taxis have to deal with. Taxis also charge metered fares that are regulated by the city, while Uber sets their own rates.

That sounds pretty unfair to taxis!

It definitely puts them at a disadvantage, which is why new rules are needed – both to ease the regulatory burden on taxis and to bring Uber under a reasonable regulatory framework. However, Uber is different from taxis in that most of its drivers are part-time and use their vehicles primarily for purposes other than passenger transport. Trying to impose outdated taxi regulations on Uber drivers and vehicles without fundamentally understanding the business model and use case wouldn’t be fair, either.

Is Uber illegal in Mississauga?

Currently, yes. Uber drivers in Mississauga can be fined for operating and/or owning a taxicab without a licence. Also, most Uber drivers are using personal insurance that isn’t valid for commercial use (like driving passengers in exchange for money) – if their insurance company finds out, they can cancel their insurance policy, which makes being an Uber driver an especially risky proposition.

Will I get in trouble for using Uber as a passenger?

No. There are no bylaws against being a passenger. Some people feel that the different (and possibly looser) requirements for Uber vs. taxis makes them less safe, but there’s no evidence to support that. Uber opponents also claim that because Uber drivers operate without proper commercial insurance, passengers may be at risk. Uber responds to this claim by touting their own insurance that covers passengers in the event of an issue with the driver's insurance.
The truth is, we won't know how robust these policies are until they're tested, and to my knowledge there hasn't been a single case yet of a passenger running into an insurance problem with Uber (but many examples of drivers having their personal insurance cancelled).

What are the benefits of using Uber?

When you request an Uber, you’re given the driver’s name, make and model of the car, and their licence plate number, which means you always know who is picking you up. Uber charges a credit card that you put on file with the app, which means you never have to fumble with cash or worry about swiping a machine – you just get in the car and get out at your destination, where a receipt is automatically emailed to you with the route you took and a breakdown of the charges. It then requests a rating for the driver out of 5; if their rating drops below 4.6, they are at risk of being deactivated from the Uber system, which helps maintain the quality of the drivers and the experience. Uber can also be significantly cheaper – fares range anywhere from 30% to 50% less than taxis, because their rates are unregulated by the city.

What are the drawbacks of using Uber?

Unregulated fares are a double-edged sword. When demand outstrips the supply of drivers, Uber initiates “surge pricing” – which means they charge you more, because their fares aren’t regulated like taxis. This can get extremely expensive on busy nights like Halloween and New Year’s Eve. Also, while UberX can take you to Pearson International Airport, they can’t pick you up from there – you would have to use their (much more expensive) UberBlack service, which meets the licencing requirements.

What's going to happen if Uber wins/loses the regulatory fight?

Nobody knows for sure, but if Uber loses this round (as is likely to happen), they may pull out of Mississauga and Toronto temporarily. However, Uber is worth billions of dollars, and you can be sure they'll use their extensive war chest to keep pressing their case everywhere they can. They've also built up a lot of customer goodwill from a populace that has been taken for granted by the taxi industry. What we do know is that the ride-sharing genie is out of the bottle, and no matter what happens, things will never go back to the way they were before. Technology is radically reshaping the transportation industry, and taxis can't fight the future any more than the horse and buggy industry could fight off the automobile.


Uber Tip:

Did you know that in addition to rating your drivers out of five stars, they are also rating you on the same five-star system? 

If your rating drops too low, drivers may be more reluctant to accept your requests.

You can check your rating in the app by going to Settings --> Help --> Account --> I’d like to know my rating.