An Open Letter on Banning Uber From Operating in BC

December 23, 2021
Confidence: likely

Mrs. Allevato,

I am the owner of a small, local, technology-focused business in Victoria, and was shocked and dismayed to hear your recent ruling blocking the operations of Uber in BC. The ruling is clearly anti-competitive, and reeks of rampant corruption. The meteoric rise of passengers choosing to use Uber and other ride-sharing apps is clear evidence that they prefer Uber over taxi services.

Perhaps you haven’t ridden in a taxi recently, but it is an awful experience. Last week I took a cab to the airport. The vehicle was smelly, rundown, and extremely uncomfortable due to a broken seat and seat-belt. This is not an outlier in my biweekly taxi usage. Of course taxi cabs will be in this state. They are rented by drivers who have no incentive to keep the vehicles well maintained. The cab companies have a monopoly, meaning that they can afford to keep their cab fleet in awful condition, since there is no competition to improve.

Worse, it cost $65 to get to the airport, when an Uber would have cost roughly half of that.

I can’t overstate this point: every cab ride I have ever taken in Victoria has been an awful experience. This sentiment is shared by many of my colleagues and friends.

Contrast this with ride-sharing apps, where drivers use their own vehicles, and have their cleanliness and behavior moderated by a convenient rating system. The drivers thus have an incentive to offer excellent cleanliness and service — first in that they are using their own personal property, and second in that their livelihood will be threatened by bad ratings otherwise.

None of these feedback mechanisms exist in the taxi industry.

Furthermore, not only is Uber a better experience for riders, it is also better for drivers. Your decision quotes the following passage from the report:

during an ongoing driver shortage, it is possible that taxi company margins will be squeezed by fixed meter rates to the point where they cannot retain drivers even though taxi demand justifies it. The drivers will then tend to move to TNS where the hourly earnings are higher because of the higher average rates and the high customer demand.

which makes the very clear claim that drivers would prefer to work for TNS than for taxi companies. I have lived in many cities with ride-sharing, and this sentiment resonates with my experience — every single TNS driver has told me they make much more money than they ever would working for a taxi company.

Compare this against the cab system, where drivers must rent a cab from the taxi company for a 12 hour shift at a fixed rate. A 12 hour shift is too long for any human to safely perform a high-focus activity, but the incentive structure of the taxi industry encourages drivers to work as many hours as possible, regardless of whether it’s safe to do so. My most recent cab ride to the airport was at 5am. The driver was barely awake and couldn’t keep his eyes on the road. I was genuinely afraid for my life, but, crucially, had no other alternatives.

Ride-sharing apps don’t suffer these problems. The driver rating system incentivizes safe driving, and because they work on their own schedule, drivers aren’t punished financially for stopping when they are tired.

It is clear that ride-sharing apps are better for both the rider and the driver. Your decision has thus sold out to the taxi cartels at the expense of local people on both sides who long for a better system. The decision states:

In the Board’s view, existing licensees should have the opportunity to start up and be successful in their business without additional competition which may be harmful.

The entire purpose of competition is to force better behavior from incumbents. Taxis exist to get people from one place to another. They exist to provide society a service. Society does not owe taxi companies the right to exist if they are worse on every front than a superior competitor — and taxis are.

Given these reasons, it is unconscionable to protect the taxi cartel, and corruption is the only logical explanation why the Passenger Transportation Board would do so.

I urge you to reconsider your decision to ban Uber from operating in BC. It is unconscionable and serves only to protect a parasitic drain on society.

Yours, Sandy Maguire