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Thoughts about the relationships between transport and the urban area it serves

Posts Tagged ‘Uber

More about Uber and the “sharing economy”

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Back in the middle of the month I reported on a City Conversation which looked at the issue of the taxi shortage in this region, and the reaction to Uber. If you didn’t read it then, can you look at it now – and especially the comment by MB, which talks his experience as a taxi driver.

I get all sorts of “pitches” in my inbox every day. Usually invitations to meetings in places far away (now if they included airfare and hotel I might even be tempted) or books to review. The invite to read the paywalled Nation has become a regular. On the whole my campaign to find links to free rather than paywalled sites has been lagging. I am pretty sure that most people find ways to get to content that I am not going to discuss. In this case I wanted to read today’s article about Uber and the Taxi Industry, just to see if it adds anything to what appears on this blog already. So I got the proffered free access behind the paywall for reviewers. The article in question is “adapted from a paper produced as part of the Future of Work Project, an inquiry supported by the Open Society Foundations.” So I rather thought that there might be an open source version of it somewhere. If there is, my Google technique needs to be improved.

Writing from a place where Uber is already established and basing the article on interviews with the people impacted – mostly taxi drivers – gives a good insight into possible outcomes here. John Liss used to drive a cab himself and his experience mirrors that of MB. In fact most of the article addresses the issue from one that was hardly touched on at the City Conversation.

The rapid growth of Uber has profound implications for both taxi drivers and the industry. Are Uber drivers earning full-time living wages? Are they protected from arbitrary or discriminatory dismissal? Can they support their families? What does this mean for the future of work?

Well, that’s all very well, but should there not also be some coverage of the needs of the users?  Well there is this

But Uber has no requirement to serve the public. Indeed, there is a strong race, class and age bias as to who can utilize the service. You have to own a smartphone, which has an average cost of more than $500. Uber requires customers to pay with a credit card, cutting off those with no or poor credit. Until recently, the company had no wheelchair-accessible vehicles in Virginia, and continues to lack adequate services for the disabled in many places.

which I think does reflect some of the remarks I heard. There is also the issue of “surge pricing” which means drivers on Uber get to profit from times when there are peaks of demand – which was also discussed if not in the context of Hurricane Sandy.

The general conclusion seems to be that drivers for Uber have ended up earning pretty much the same as cabbies – and with all the attendant risks (pay up front, hope you get enough rides, no benefits) and once again the company that developed an app makes the big money.

As National Taxi Worker Alliance organizer Biju Mathew said, “It’s drivers and millionaires against the billionaires.”

So not different enough, I think to allow Uber in here even if they can be persuaded to play by the rules – that is to say the rules of society rather than their own. Which, according to Liss are stacked against the drivers.

But there is also the broader issue of the public interest. We need better alternatives to driving ourselves everywhere, and the current suite of options is not adequate. But simply relying on private sector initiatives and the market economy is unlikely to address these issues in a way that will satisfy anyone. In the same Nation there is a further examination of the “sharing economy” based on an examination of Uber and AirBnB.

“Now, despite over five years of official recovery, the sharing economy offers some people, like cab drivers, the prospect of real wage cuts, and others, like people with a spare bedroom, a way to supplement stagnant incomes. The sharing economy is a nice way for rapacious capitalists to monetize the desperation of people in the post-crisis economy while sounding generous, and to evoke a fantasy of community in an atomized population.”

So not much to cheer about there then. Actually I did notice something that seemed to offer a glimmer of hope.

“Uber’s a different story in New York, where all drivers have to be certified by the Taxi and Limousine Commission, and the cars are all regular cabs or car-service vehicles. Every Uber-hailed driver I’ve spoken with in New York likes the service, because it delivers more paying riders than they’d otherwise have.”

So it seems that Uber can work in a regulatory environment. It is also possible I think that the fleet of vehicles and the number of drivers could also be supplemented at need under such a system. In New York you see “car-service” vehicles all the time. They tend to be black, and are often upmarket sedans and SUVs as well as limousines. If you are staying in Brooklyn and you have an early morning flight out of Newark, they are probably the only practical way of completing the trip – short of sleeping overnight at the terminal. I do not know about Uber cars, but from these articles it seems that there are some attempts at both quality control and market segmentation.

Liss does give some insight too into how different cities and states have developed regulated taxi systems. What they seem to have in common is that having evolved as cars proliferated they then became stuck at the point in history when the regulation was imposed and have changed remarkably little since. It does seem that change is both necessary and desirable, but not that all attempts at control should be abolished overnight.

One of the more curious meetings I had when at Translink was with a lawyer. He had noticed numbers of people left behind at bus stops as he drove through Vancouver towards downtown, and he wondered if there was some way that people could be picked up to utilize the empty seats that were going the same way anyway. I had to disabuse him of the notion that the public transit provider – or the taxi industry – would welcome such an innovation. But this kind of ride sharing does happen. On the Golden Gate Bridge in San Francisco it has become established and officially recognized that people will wait at a point where single occupant cars can pull up and load enough people to get into the HOV lanes and share the cost of the toll. I somehow doubt that anyone has thought of this at the Port Mann.  Hitch Planet hooks up people making trips within BC but does not seem, so far, to have tackled shorter trips with Metro. Jack Bell has expanded from simply organising commuter car pools  with an app of its own which can also handle one time trips.

Liss seems to be mainly concerned about the people who work in the taxi industry, and I must admit that cab drivers in BC are – as in so many other places – at the bottom of the food chain. I had hoped he would also look at why Uber has become so popular with users. Yes it has sharply reduced the number of cab rides, but I think it must also have greatly increased the size of the market, and probably diverted some people from transit in the process. It also seems to me that in the longer term a company with Uber’s track record is bound to target the transit market and cream off traffic on the most productive routes. This is exactly what happened in Britain (outside London) when buses were deregulated. There is now a distinct gap between denser urban areas where buses are frequent and reliable, and rural areas where buses are almost entirely absent. Greater Vancouver could be very much at risk if the disrupters start to take an interest in transit. And that is not so unlikely in a future where the public authority has to compete with one arm tied behind its back.

So, no real conclusions other than I recommend reading the Nation articles if this topic held you long enough to still be reading.  The current regulatory framework for taxis in Vancouver is far too biased towards the established license holders, and has resulted in a shortage of taxis – compared to other Canadian cities. It has also lead to people developing all sorts of ways of accommodating these rides. The trip diary survey shows that around 10% of car trips are to take someone to where they need to be – often with an empty return trip. The airport has even set up a “cell phone parking lot” to cope with one of the more obvious needs. Yes, the Canada Line helped, but lots of people need to get somewhere other than downtown. New technology does offer us ways to use the vehicles that currently stand idle for most of the time. And there is a real need for opportunities to make extra money for a lot of people. Yes it would be better if there was a higher minimum wage and a really good social safety net for those in need of supplementation to their incomes. Neither of those seem remotely likely in present day Vancouver, BC, Canada, so let us have a sensible conversation about how we can increase mobility in the region.

Here’s a place to start: Helsinki

“Passengers request a shuttle service on their phones and Kutsuplus computes the best way to get everybody where they need to go, based on real-time data. It also indicates how long it would take to complete the trip both with Kutsuplus and with other modes of transport.”

“[Uber] is an approach that works fine in America, where walking is rarely an option and public transport mostly nonexistent.”

Read more here

Bits keep adding themselves to this story. I saw this link in the February 3 edition of The Direct Transfer (something you might want to consider subscribing to). It comes from Bloomberg and the story is extraordinary. Google is developing its own ride hailing service, in direct competition with Uber a company it has been funding itself.

Written by Stephen Rees

January 29, 2015 at 5:42 pm

Taxi Disruption

with 9 comments

The first City Conversation of the New Year featured Peter Ladner of Business in Vancouver and Mohan Kang of the BC Taxi Association. It was sparked by the recent attempt of Uber to set up in Vancouver, which was quickly squashed. However, Uber is not the only actor who wants to see something change in mobility provision here. Indeed many who favour change hope that there will be a better alternative to Uber.  There was someone video recording the meeting – and taking photos –  but I cannot see where on the SFU website these meetings get archived. Perhaps you can help me.

Yellow Cab 234

Peter Ladner opened by saying he was not an expert in the field but of course he has editorialised about it. He opened by talking about a recent trip to Grouse Mountain where he saw an empty bus, three idle cars2go and a sign for car sharing. He said that the waste of car seats in the line up of cars is absurd and could be easy to deal with through new technology. He cited the new Helsinki app, Moovel (Daimler) and Park Together as examples. Uber is “just the most prominent and the most ugly – ruthless, aggressive and unethical.” Uber is aiming for a monopoly and will also take aim at transit. “Do we need protection through regulation?” he asked. He cited examples like Hitch Planet and Airbnb to show how they have managed to build trust. He thought that increasing the use of ride sharing would have community benefits through better mobility access and “microjobs”. On the other hand with Uber there could be a race to the bottom.

Big Yellow Taxi by C4Chaos

big yellow taxi @ gastown by c4chaos on flickr

Mohan Kang explained that his association is a non profit that represents the 140 taxi companies that serve BC but not the four that serve downtown Vancouver. [Black Top, McClures, Vancouver and Yellow]  Uber represents a good idea but they have gone the wrong way about it. Taxis are not the only service that is regulated. He cited doctors and dentists as an example of a service that needs regulation, and deals effectively to restrain unregistered practitioners. Uber has no requirements of drivers other than a post 2004 four door car and a driver’s license. Taxi drivers must have training, a special license, much more insurance than other drivers (at a cost of $20,000 a year) and pass a course at the Justice Institute. They are also subject to a criminal record check before they can get a chauffeur’s license and must have their taxi inspected every six months. A new accessible van costs $45,000 and can only be operated as a taxi for six years before it is replaced. He said the industry is effectively subsidizing accessible taxis. Uber will not provide services to those with disabilities, without cell phones and credit cards and will not take cash or taxi savers. “If we don’t need regulation for taxis, then we don’t need it for day cares – or building construction.” Regulation is necessary to protect the public. Taxis by their constant presence on the street save lives and can report incidents to the police as they happen. BCTA has been part of the Amber Alert system for ten years.

The first participant said that she would not feel comfortable getting into a stranger’s car, but felt safe in a taxi. The second said that he had used Uber in Los Angeles for seven rides and felt that the system was safe and convenient. He compared their prompt and efficient service with a recent experience in Vancouver when a taxi took 25 minutes to arrive – and showed him 200 ride requests waiting on the system. This was, of course, a Friday evening.

I was the third participant and rehearsed some of what I have been writing on this blog on this topic. Mr Kang responded to the discussion by stating that the BCTA has never contributed to any political party. He also said that the Passenger Transport Board does not show any favour to the industry and has issued additional licenses in recent years ( e.g. Garden City cabs in Richmond). He was asked are more cabs desirable? Is the industry over regulated? Could taxi fares come down? He responded that the fares are determined by the Passenger Transportation Board [using a cost of service index]. “Prices cannot be lowered”. Recent changes permit some suburban cabs to pick up in downtown Vancouver on Friday and Saturday night. But at 02:00 on Saturday (when the bars close) the peak in demand for cabs cannot be met economically by adding more taxi licences – as the service is not needed at other times. Surge Pricing on Uber was said to deal with this problem by encouraging more cars to come into the market at that time. Regulations currently forbid suburban taxis that have come into Vancouver from picking up, and have to return to their home municipality empty.

Hilary Hennegar of Modo said that the taxi industry is a public service which has been important to supplement accessible services after HandyDART was cut. She felt that there were better examples than Uber such as Seoul, South Korea that has booted Uber and set up their own system. She thought that a co-operative approach was possible rather than a predatory one. Vancouver should develop its own sharing economy.

McClures taxis at Granville Island

Benn Proctor has produced his Masters’ Thesis which is an unbeatable source of information on “Assessing and Reforming Vancouver’s Taxi Regulations”. It was observed that each car share takes ten cars off the road: car share reduces car ownership.

There were concerns over the use of the data collected by Uber which could create issues over privacy. Boston MA is using Uber data to study trip making.

Michael Geller stated that “the taxi system is broken”. He thought the value of taxi licenses on the secondary market reason enough for intervention. While the BCTA may not make political donations, taxi company proprietors (i.e. license owners) are very generous to all candidates. [As a reality check I can state authoritatively that no taxi company offered me any money when I was a candidate. Perhaps that is just an indication of how realistic taxi operators were about my chances of election. ]  We are moving to a society where young people do not have driver’s licenses let alone own cars. We have to have more choices, and the taxi industry must address their ridiculous 4pm shift change. The more we can reduce the need to own a car the better we will do.

Peter Ladner pointed to the mytaxi app and suggested that the automobile industry is ‘waking up’ to the reality of lower car ownership.

Michael Anderson stated that this meeting had been “City Conversations at its best”.

taxi by K. Yasuhara on flickr

taxi by K. Yasuhara on flickr

POSTSCRIPT
Somebody sitting near me was talking to the person next to him, before the meeting began, about shared ride vans in Africa. I had heard about these but this morning someone tweeted the link to a piece on Next City on the tro-tro in Accra, Ghana. This includes commentary from Uber

Shared ride, legal and unregulated vans also operate in a number of US cities, where conventional transit and regulated taxis are both inadequate. There is also a trial ride share program at SFU.

The Vancouver Sun reports that the additional weekend taxis so far authorised have made no difference but even so the four Vancouver companies have managed to put them on hold – again – and seem likely to continue to block any efforts to reduce waiting times on Friday and Saturday nights.

Read Michael Geller’s take on this meeting in the Vancouver Courier

February 4 – some more data on the quality of taxi service in Vancouver

Written by Stephen Rees

January 15, 2015 at 5:51 pm

Posted in Transportation

Tagged with , , ,

Uber seeks to return to Vancouver

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I’m sorry that this story comes from a paywalled site. The Globe and Mail reports that Uber has had a meeting with Councillor Geoff Meggs who “said there will be a motion to council this week to freeze the status quo for six months while staff study the issues – past the election in November.” He also acknowledged that this will have to be treated as a regional issue even though “each municipality in the Lower Mainland has its own rules on taxis.”

Mohan Khang of the BC Taxi Association knows he can rely on the Passenger Transportation Board. They turned Uber down two years ago and are highly unlikely to do any different next time. Why? The PTB actually controls who can have a taxi license, even though they are issued by municipalities.

Section 28(1) of the Passenger Transportation Act states that the Board may approve an application if the Board considers that

  • (a)    there is a public need for the service the applicant proposes to provide under any special authorization,

  • (b)    the applicant is a fit and proper person to provide that service and is capable of providing that service, and

  • (c)    the application, if granted, would promote sound economic conditions in the passenger transportation business in British Columbia.

So it actually does not matter what any one city decides to do. The provision to “promote sound economic conditions in the passenger transportation business in British Columbia” means that the established taxi operators’ interest overrule any and all other considerations. Uber could indeed try to satisfy the requirements that there is a need – simply on the grounds that there are fewer taxis here per thousand population than anywhere else in Canada. They could also show that they are working in Halifax, Montreal and Toronto. All the BCTA has to do is point to the impact services like Uber and Lyft have had in cities in San Francisco – where taxi use was more than halved – and the PTB will be obliged to reach the same decision as it did last time.

It has become something of a truism that regulators become the client of the industry they are set up to regulate. That is demonstrably the case with the National Energy Board and the oil industry. While other places have sought to deregulate taxis or to operate on the basis that the public interest in plentiful, affordable and convenient access to mobility services is more important than the survival of existing providers, that has not happened yet in BC. It is not likely to change any time soon.

The people who drive taxis are not the people who drive the industry or the PTB. The people who make significant amounts of money from taxis are those who own licenses. Although these are issued by government they can be traded on the market, and thus, due to their scarcity, acquire significant value. The man (and it is usually a man) driving the cab has to rent the license from its owner. He also has to rent the cab and pay for its fuel, maintenance and access to the dispatch system. A cab driver does not start to earn any money until he is at least halfway into his shift and even then will be very fortunate to clear more than minimum wage. He will do better if his cab also has the even rarer YVR permit – which also means the taxi has to be licensed in Richmond as well of the municipality where it is based.

So for Uber – or anyone else – the task is to get the legislation changed. And while there might well be many people who would like to see that, the people who control the industry also have considerable political weight, not just because they are contributors to party funds but also because they claim that they can deliver votes from the people and communities that rely on employment in the industry. So far as I am aware, no politician in BC has ever tried to test the validity of that claim.

The virtues – or otherwise – of Uber do not matter. The public need for greater access to demand responsive transportation does not matter. Political power is what matters. Geoff Meggs can have as many meetings and as much research as he cares to commission. It will not make any difference to the outcome.

POSTSCRIPTS

I have now seen another post on the same issue from The Georgia Straight – which, of course, isn’t paywalled

The issue of taxi licensing in Greater Vancouver and a possible solution is presented by Ben Proctor in his recent (April 2104) Masters of Public Policy Thesis at SFU. I am indebted to Neil Salmond for this link. The research confirms what I have been saying on this topic. His proposed solution is practical but still requires a politician with considerable courage and willingness to take on a powerful and deeply entrenched private interest group. Both John Horgan of the NDP and Todd Stone in their recent comments regarding Uber show that neither has any intention of changing the present arrangements.

The real issue is that taxis are expensive and not as readily available as needed. Licence owners make a lot of money. Taxi drivers very little – but carry all the risk. Uber ought to be a better system but isn’t. Once again the drivers take all the risk, the company all the profit. Lots of seats in cars are empty: average occupancy of the cars on the road is around 1.4. Most cars are only in use for an hour or so each day. Much of the fleet sits idle most of the time. There are clearly opportunities to make better use of the resources tied up in private cars. The PTB and Uber are both significant blockages on the path to progress towards better, more efficient personal mobility.

Written by Stephen Rees

September 29, 2014 at 12:23 pm