The committee met at 9:01 a.m.

[B. Ma in the chair.]

B. Ma (Chair): Good morning. My name is Bowinn Ma. I am the MLA for North Vancouver–Lonsdale and the Chair of the Select Standing Committee on Crown Corporations. We will be just getting started right now.

I’d like to begin with the recognition that our meeting today takes place on the traditional territories of the Musqueam, Squamish and Tsleil-Waututh peoples. We, here, are an all-party parliamentary committee of the Legislative Assembly with a mandate to examine, inquire into and make recommendations on ride-sharing in British Columbia, and we must issue a report by February 15, 2018.

The committee is meeting to hear from expert witnesses on the following questions. One, what is the impact that ride-hailing would have on different communities around the province? Two, what regulatory regime should be established to allow ride-hailing to operate in B.C.? All of the information received will be carefully considered by the committee as it prepares its report to the Legislative Assembly.

I’m going to tell you a little bit about the meeting format. In general, with the exception of the first presentation today, each meeting will consist of a 15-minute presentation, followed by 15 minutes for questions from committee members. I will give you a one-minute warning to wrap up when you’re nearing your allotted time for presentations.

Please note all meetings are recorded and transcribed by Hansard Services. A complete transcript of the proceedings will be posted on the committee’s website. These meetings are also broadcast as live audio via our website.

I’m going to now ask each member of the committee to introduce themselves. I’m going to start at this end, with Mr. Sturdy.

J. Sturdy: Jordan Sturdy, MLA, West Vancouver–Sea to Sky.

J. Johal: Jas Johal, MLA for Richmond-Queensborough.

P. Milobar: Peter Milobar, MLA for Kamloops–North Thompson.

S. Cadieux (Deputy Chair): Stephanie Cadieux, MLA, Surrey South.

S. Chandra Herbert: Spencer Chandra Herbert, MLA, Vancouver–West End, Coal Harbour.

R. Singh: Rachna Singh, MLA, Surrey–Green Timbers.

R. Kahlon: Ravi Kahlon, MLA, Delta North.

B. Ma (Chair): Fantastic. Assisting the committee today are Susan Sourial and Stephanie Raymond from the Parliamentary Committees Office. Michael Baer and Simon DeLaat, from Hansard Services, are also here to record the proceedings.

On behalf of the committee, I’d like to thank the presenters who have taken their time to be with us today. And I would like to introduce our first presenters. These are actually two presenters who are doing a joint presentation. For that reason, they will be given 30 minutes for their presentation, followed by 30 minutes for Q and A. All meetings afterwards will be 15 minutes and 15 minutes.

We have Kristin Vanderkuip, Ministry of Transportation and Infrastructure, passenger safety branch. We’ve got Steven Haywood, Ministry of Transportation and Infrastructure, commercial vehicle safety and enforcement.

Please proceed.

Presentations on Ride-sharing

MINISTRY OF TRANSPORTATION
AND INFRASTRUCTURE

K. Vanderkuip: Thank you. Just for the record, I’m from the passenger transportation branch.

B. Ma (Chair): Oh, my apologies.

K. Vanderkuip: That’s okay. Just so the record is accurate.

[9:05 a.m.]

We’ve been asked to come this morning and provide a background of information for you on the commercial transportation industry in the province, focusing on passenger-directed vehicles. That’s mainly taxis and limousines. We’ll focus primarily on the taxi background right now.

I’ll start the presentation, my colleague Steven will take over and present, and then we’ll have questions afterwards. Some questions that may come up during my presentation that Steven may answer in his, so we’ll save the questions till the end.

We’ll talk today about the current regulatory structure, some key industry information, as well as some key regulatory considerations. Now you all have the package of information before you. We will go quickly through that but feel free during the question period…. A lot of it will be review. I think I’ve presented to a number of you in the past. It will be review, so if you have any questions, we can go back into the presentation and dig a little deeper for you, if that helps.

The current laws. We understand that this is a complex industry. There are six key pieces of legislation that impact the industry. Those regulate things like business licensing, commercial licensing — so provincial licensing — the supply of vehicles, where vehicles can pick up, where they can operate in the province, vehicle safety and inspection, insurance and permitting. One of those permitting aspects that’s key is chauffer permitting. That’s the background check process, which is a municipal authority, and that’s covered in these pieces of legislation.

At a very high level, the regulatory jurisdictions that apply for an operator…. When I use the term “operator” today, I’m talking about the business that operates the service. The businesses need to apply and be deemed fit, proper and capable — that’s an assessment done by the province — and then also need a business licence from the municipality or municipalities that they work in.

In terms of vehicle, the jurisdictions for safety — that’s a provincial jurisdiction. Things like age and appearance of the vehicle are a local government jurisdiction. Then the supply, how many vehicles and the types of vehicles that are available, is actually a concurrent jurisdiction. There’s no jurisdiction that overrules the other one. They can have two different numbers between the municipality or local government and the province.

For drivers — drivers’ on-road skills — their actual driving skills and their medical fitness are a provincial jurisdiction. Hours of service, which Steven will talk a bit more about, is a provincial jurisdiction as well.

Customer service issues, in terms of the driver’s customer service skills, service to people with different needs — a municipal authority would set the training for things like that.

Then criminal record check. Background checks are done by the local government through the local police agency.

So you’ll see that there is very much overlapping of jurisdictions. Some are fairly clear. Some are concurrent and do create friction when there’s overlap there.

I just want to give you an idea of what it takes to operate in the province of B.C., just at a very high level, and some of the costs associated with that. In order to operate — we’re talking about a business operating now — first, you need to come in to the province, and you need to apply for a safety certificate. You apply to commercial vehicle safety and enforcement, you pay $200, you show that you have an understanding of the safety requirements of the national safety code requirements in the province, and if you’re successful, you are given a safety certificate in the province.

Once you have that, you can then apply for a passenger transportation licence at the provincial level. You apply through the Ministry of Transportation, but you’re actually applying to the Passenger Transportation Board, which is an independent tribunal. We’ll talk a little bit about what the board is looking for when you apply for a licence.

Should you be successful in getting a licence, you would then go to the local government and meet the local business licensing requirements for your business, and possibly for each individual vehicle as well, for your company. If you work in multiple municipalities, you would need to have multiple business licences.

[9:10 a.m.]

In terms of the provincial passenger transportation licence — and I’ll leave it to local governments to talk to you about their own business licensing — you need to show…. As an applicant, you need to prove that there’s a public need for the service — that you as a company or an individual are fit, proper and capable of providing that service. You may have heard the term “fit and proper” in London. They have a similar fit-proper test.

Sound economic conditions is the third test. That would mean that the service wouldn’t provide an unfair or destructive competition or that there would be a negative impact to the industry.

Then if the licence is approved, if you’ve been able to provide the evidence…. The board doesn’t collect evidence themselves and doesn’t say: “This is what the market needs.” They rely on the applicants to prove that there’s a need in the market. There’s no number. There’s no “this is the cap on how many licences can be issued at a provincial level.” Some municipalities do have a cap, but there isn’t one provincially. It is up to the applicant to show there is a public need.

Once a licence is approved, the board then sets the terms and conditions of a licence for a licence holder. That may include things like the fares that they can charge, how many vehicles and the types of vehicles that they can operate, the number or percentage of eco-friendly vehicles, the number or percentage of accessible vehicles that are required, where passengers can pick up and drop off. I’ll tell you. Generally, you can drop off anywhere in the province of B.C. or beyond. It tends to be for drop-off. Pickup is quite restricted. We use the term “boundaries” for that. So you’ll hear that a lot — about boundaries, cross-boundary, that sort of thing.

Then other service requirements would be set. Things like taxi cameras are set by the board — whether or not you need to have a taxi camera as well as the requirements for the taxi cameras that you install. Any signage that you need to have on the vehicle, whether you need to have a meter, whether you need to have a top light…. All of that can be set by the board. They can require any sort of information or signage available to the passenger, things like…. The taxi bill of rights is also a ministry program, but the board decides who does or doesn’t need to participate in that process.

That’s the licensing. Now, in terms of the vehicle — we’ll talk more about vehicle safety with Steven — you need to have provincial inspection on each passenger-directed vehicle operating in the province. You need to have that every six months right now. These are done by designated inspection facilities. They’re not done by the province. They’re inspection facilities that are certified by the province. Those inspection facilities can charge what they want for those inspections. So $125 to $150 is a good estimate. Canadian Tire charges $125.

Then once you’ve got an inspection and a licence, you can apply for your insurance. Now, if you don’t have a licence in a national safety code, generally ICBC can’t sell you the insurance, so they’ll sell you insurance for a taxi. An average right now is, as it says there, $7,700. That’s the average in B.C. In the GVRD, it’s $11,200. Remember that there are fleet discounts factored in there, and different companies would have different experience ratings. But we’ll let insurance talk about insurance. I’m not the expert there.

Some municipalities also have a municipal inspection. This tends to be an appearance inspection. Also a meter inspection. The local governments do the meter test. They’ll check for calibration of the meters. In my research, I couldn’t find a fee for that. It would be part of the licensing fees for the vehicles. But they would need to have that as well.

What’s needed to drive? If you want to be a driver of one of these vehicles, the first step is a full class 5 driver’s licence. You must have an unrestricted class 5 driver’s licence to even get near any of the next steps in the process. That is a challenge for people coming into the country without a history of driving experience. It does take a little longer to get through that if you need to start your graduated class 5 licence when you move to the country. If you wanted to talk about drivers, you can bring in some experts on that.

[9:15 a.m.]

The next step is a class 4 restricted driver’s licence. That does involve a medical examination. Those medical examinations happen at a regular interval, and they increase with age. The interval shortens as a driver ages. That costs about $200. That’s the cost of the driver’s licence as well as the cost of the medical. Again, your physician can charge what they wish for a medical assessment.

Customer service training. This is not a universal requirement. This would be a requirement set by the local governments. In Metro Vancouver, drivers require the TaxiHost Pro, which is through the Justice Institute. It is only a Lower Mainland course that’s available, and the cost for that course is $560.

Elsewhere there wouldn’t be a customer service training requirement. There may be a requirement for drivers to have training on accessible service through their own company. Some people use the local association to come in and do training for their drivers, but the only standard training right now is the Justice Institute TaxiHost Pro.

After that, there’s a chauffeur permit. There are about 110 municipalities that have taxis and limousines that operate in their jurisdiction. About 40 percent of those have a chauffeur permit of any type. A chauffeur permit tends to include a background check. That’s a criminal background check as well as a driving background check. That’s looking at your abstract. Time intervals for these vary between jurisdictions. They can be every two years, every three years or every one year. It varies. The standard isn’t set by anyone other than that local government or that local police. We know the cost, but the ins and outs of what each local government decides on is up to them.

In terms of safety and the regulators for safety, you’ve got the Passenger Transportation Board. I talked a little bit about requiring taxi cameras and different equipment. The Passenger Transportation Board, within their mandate, has that mandate to implement public safety policy initiatives. Then we’ve got commercial vehicle safety and enforcement. The national safety code safety certificate, which Steven will be talking about, is required by all commercial passenger vehicle operators in the province. There’s no exemption from that.

Passenger transportation registrar. That’s myself. I’m the registrar and executive director of the branch. I probably should have said that a while ago. As the registrar, I must be satisfied that vehicles operating under a licence are properly insured and inspected. We do a check once a year, when a licence is renewed. When it’s issued and then annually as it’s renewed, we make sure that there is insurance and that an inspection is done on the vehicle.

Then police. As I said, in 40 percent of the municipalities, there is a criminal record or driving record check of the driver. It is the local police that have the authority to do that under the Motor Vehicle Act.

Enforcement. Obviously, a lot of the same entities as well. Commercial vehicle safety and enforcement will talk about the compliance audits and roadside inspections. The passenger transportation branch and commercial vehicle safety and enforcement work in lockstep with this industry. We collaborate on targeted enforcement. Some examples. Before graduation season, we do some limousine checks and — I don’t tend to use this term — “party bus” checks. Then there’s also participation with local governments on rotating taxi checks as well.

Myself, as the registrar…. We have the authority to investigate complaints. I’ll talk a little bit about some of the statistics about the complaints we received in 2017 so that you have a background on that. I do have the authority to issue administrative fines and penalties. Fines go up to $1,500 — a little pitch here, $1,500 isn’t very high — and suspension. We can suspend or cancel a licence. The board also has the ability to do fitness reviews of a company if they find that they’re not fit and proper. If the registrar finds that they’re not fit and proper, we can suspend or cancel a licence for that reason as well.

[9:20 a.m.]

Police also have the authority to enforce the Passenger Transportation Act, the Liquor Control and Licensing Act, if that applies, as well as the Motor Vehicle Act. They have the ability to enforce any of that if they see issues. We do work closely with the police on investigations from time to time.

With that very quick overview of the taxi industry in British Columbia…. I know it’s review for a lot of you. As I said, about 110 municipalities in the province have taxi service. There are about 215 licensees currently in the province, and those 215 companies or individuals operate almost 3,200 taxis in the province.

In terms of a breakdown, if you look at the distribution, 65 percent of those vehicles are in Metro Vancouver, another 14 percent on Vancouver Island. Prince George and Kelowna have a 3 percent share each, and then the rest are spread through smaller communities throughout the province.

We estimate that the industry employs about 8,000 drivers. As well, there are a number of dispatch staff and office staff that work for these companies.

Now, as promised, some public feedback that we’ve received. We do receive complaints either directly to the branch or through Consumer Protection B.C. We work with Consumer Protection B.C. because they’re the conduit for all complaints through the taxi bill of rights. That number is posted in the vehicles, and individuals can call, email or submit a form with a complaint. Those are triaged through Consumer Protection and then referred on to us.

I said that there are about 3,200 vehicles operating in the province. The ones in Metro Vancouver tend to be 24-7; the ones outside tend to work shorter shifts. But we received exactly 295 taxi complaints in 2017. You see the breakdown there. I don’t think I need to go through that.

Driver behaviour and trip refusal are always the top two, year over year, and then some issues related to payments and rates. We do get some wait-time complaints, but the number is never as high as some of the behavioural ones.

Accessibility complaints. You’ll see we’ve received four. That would include a person who doesn’t feel that their chair is safely secured in the vehicle. It’s not an uncommon complaint. The other could be that a service dog is refused.

Let me just clarify some of the terms that I’ll be using. Ride-hail, for me, is a dispatch or app service — the way that an individual hails a ride now. Technically, hail means this. It means I’m putting my hand up and calling for a ride. But we’re talking about an electronic hail here.

I use “commercial ride-share” when I talk about the actual service that’s going on, just for clarity. There’s ride-share which is car pool, which is a different thing. We do have legislation around car pool. But those are the terms that I’ll be using: ride-hail service and then commercial ride-share for the actual door-to-door trip.

Ride-hail services. Our legislation currently does not regulate ride-hail or dispatch services. In other jurisdictions, you may find that the dispatch companies actually need to have a licence as well. We do not have that requirement. In places like Toronto, you need to have a dispatch licence. We do not have that here.

That’s whether I phone in, whether I use an app. That part of it is not regulated by us. We often call the apps “transportation network companies,” just to throw another term in there as well.

In terms of the use of apps, most taxi companies operating in the province have apps and have had apps in various forms for a number of years. The ride-hail part of it, the electronic-hail part, isn’t new to the province. The key with apps and the regulated piece is that you have to follow your licence. If you use an app, if you use a phone service, if you use direct contact with the driver — all of that just has to comply with the licence. You have to charge the rates that your licence says you must charge. You must only pick up in the places that your licence says that you can pick up.

[9:25 a.m.]

That is the part that we regulate about apps. Vehicles and drivers are what we regulate, not app developers, and it’s the vehicles and drivers that are subject to the enforcement if they’re operating without a licence.

Transportation network companies. These are some of the app-based services that have been in the province.

Some of the history. In 2012, Uber came to town with a black car service called UberBlack. It was a completely app-hailed luxury sedan service. The company used primarily licensed vehicles and drivers for that service. Unfortunately, the rates charged did not comply with those licensed companies’ terms and conditions on their licence. The registrar at the time and the board met with those licensed companies and advised them that they were at risk of sanctions because they were in non-compliance with their licence.

My understanding is that those companies chose to step away from their work or weren’t aware that their drivers were working with the company and chose to pull their vehicles out of being dispatched through the company. Uber voluntarily ceased operation in 2012, after that. Again, that was not an action taken against Uber. That was a voluntary ceasing of service.

In 2015, our first completely app-hailed service, passenger-directed vehicle service, started operation in British Columbia. They operated under the tradename Ripe Rides. Ripe Rides worked until 2016, and they were a black-car service operating 20 vehicles. So this company not only had an app but also owned their own vehicles and hired drivers to drive their vehicles. They did suspend service in 2016 and then voluntarily cancelled their licence in 2017. The public notice on the suspension of service was related to waiting to hear what happened with ride-hailing in the province.

Also in 2017, Ripe Rides did apply to the Passenger Transportation Board to operate an app-hailed taxi service. They wanted to add 150 vehicles that were taxis, not luxury cars but lower-cost taxis. That application was refused in 2017.

Also this year, as you know, a number of ride-hail apps are operating in the province, connecting riders with unlicensed drivers and vehicles. They are operating in the GVRD, Metro Vancouver, and CRD.

To date, we’ve issued $12,650 in fines to the drivers. I’ll reiterate that it is the drivers and the vehicles that are operating illegally, it is not the app developers themselves. So there’s not an action we can take against the app developers, but we are trying to educate the public about the risks of riding with a driver who may or may not have even a licence, in our research, and in vehicles that are not licenced or insured for commercial use. That is an ongoing investigation. So just in terms of questions, I’ll be careful on how I can respond to those ones.

The question is: why isn’t commercial ride-share here? First and foremost, we haven’t had a commercial ride-share operator apply to operate in the province of B.C. We haven’t seen somebody who wants to have people in their personal vehicles that are used as commercial vehicles part-time. That’s commercial ride-share, to me. We haven’t seen somebody apply to the board to operate that kind of service.

We’ve seen luxury cars. We’ve seen the application for a taxi service. But again, those fleets would be owned by the companies. We haven’t seen this other model apply.

Certainly, there is an understanding that the regulatory compliance and insurance costs are high to participate in this industry, and that may impact the pool of available drivers and vehicles. That could be impacting why we haven’t seen an application in the province as well, but I’ll leave that to others to comment on.

[9:30 a.m.]

Some key policy considerations that have to be looked at when looking at modernizing…. I mean, the Passenger Transportation Act dates back to 2004, and it doesn’t consider whether or not we had an app at all. These are the key policy considerations that I think are important for you to consider.

I’ll hand it over to my partner.

B. Ma (Chair): You’ve got five minutes, by the way.

S. Haywood: Five minutes? All right. I’ll be fast.

As Kristin is loading it up…. As my name tag says, I’m Steve Haywood. I’m the director of commercial vehicle safety enforcement with the Ministry of Transportation. Chair, I’d like to thank you for having us speak here today.

Commercial vehicle safety enforcement. Typically, we deal with the trucking industry for the majority of our work, but passenger transportation vehicles are a portion of the focus that we have.

I’m going to go through some details quite quickly. There’s a lot in this package that you’ll be able to look at afterwards or ask questions on, but I’m just going to skim over from a more higher level. As Kristin said, when we look at commercial passenger transportation vehicles, we’re talking taxis, limos and buses in the current regime. That’s what I’m going to talk to you about today — how we monitor those.

There are three areas of obligation and enforcement that I’m going to speak to. One is the national safety code, the next is the vehicle inspection program, and then on-road enforcement.

Each vehicle that operates in the commercial passenger transportation vehicle must have a national safety code number or certificate. That certificate is used to track, monitor and intervene. Really, what is that safety performance of that carrier? It tracks vehicles to the responsible carrier. It determines the carrier’s safety rating. Then we intervene as required with the vehicle and carrier.

Vehicles are associated to a carrier when licensed by ICBC. You can’t license a taxi without the national safety code number. That number has to be displayed on the vehicle registration, so any time there’s some enforcement completed on that vehicle, the attending officer can make sure that that number is transferred onto the enforcement action.

When determining a carrier safety rating, the profile tracks on-road performance in three key areas: at-fault crashes, which are noted as a property damage, an injury or a fatality; convicted violation tickets; and out-of-service roadside inspections completed by CVSE officers or other trained officers. It could be police. An out-of-service…. For an example, let’s say I have a vehicle with a flat tire. The vehicle would be placed out of service until that tire is then repaired.

Points are assigned based on the severity and the link to road safety. An at-fault crash that results in a fatality would garner the most points against that profile, whereas a ticket for parking in a disabled zone would have the least.

CVSE will then intervene with the national safety code carrier dependent on the established thresholds within seven different risk bands. Risk bands are set dependent on the fleet size. Then, when a threshold is reached in any of those risk bands, we’ll intervene first off, with a warning letter — it’s progressive; a compliance review, which is a way for our auditors to have a look at that carrier in an educational experience; as well as a quantifiable NSC audit. It would be the last process in the progressive discipline. We’re able to suspend or cancel a carrier’s NSC certificate dependent on the progressive discipline model.

National safety code. We also monitor the hours of service. There are some details up there we’ll skip by, but hours of service are based on the federal regulations, which B.C. has adopted, for the most part, with just some subtle differences. It’s based on the circadian rhythm, so it operates so that the driver has sufficient rest and work combined in a consistent pattern over a set period of time.

Pre-trip inspections are also an area that we look at with the national safety code. For most commercial vehicles, a written pre-trip is required. There is a modification in the regulations for taxis where they’re able to either do the written pre-trip or call in the trip inspection issues to the dispatcher for monitoring at the carrier level.

I’m sorry if I’m going quickly. I know we’re down to a few minutes.

Carrier safety plans are another area that are a requirement under the national safety code. They ensure that the carrier is tracking the individual driver records and monitoring the hours of service, the vehicle preventative maintenance plan, any disciplinary policies and records retention. For records retention, there are a number of items that the carrier is required to maintain at their place of business, including drivers’ abstracts, accident reports, vehicles inspections, and so forth.

[9:35 a.m.]

Kristin talked briefly about vehicle inspections. They’re set up through our designated inspection facilities, or DIFs. These are private facilities that are licensed by CVSE. The inspections are carried out by journeymen mechanics who have completed a training requirement to do this, and then it’s monitored by CVSE’s on-road enforcement. That’s just what you’ll see when you hop in a taxi right now. You’ll see the inspection decal on the windshield. It looks over some of the major components of that vehicle for mechanical safety.

On-road enforcement. CVSE will look at the vehicle inspections, licensing verification for both the driver and the vehicle, and the adherence to the Motor Vehicle Act and Passenger Transportation Act.

I think I met it.

B. Ma (Chair): Well done. All right. Questions from the committee.

R. Kahlon: Thank you for that, and thank you for delivering that so fast. I’ve got some questions on it. This will give you some time to fill in some of those blanks that you weren’t able to.

Some argue that we shouldn’t need a requirement to have such stringent safety on cars. They argue that because we haven’t had many accidents because of faulty issues in cars…. I guess you could do chicken and egg, right? Perhaps we’ve got the regulations in place, and that’s why we don’t have them. Has the ministry looked at those requirements and the success of those or not success of those?

S. Haywood: Just to clarify, the vehicle inspection requirements on the taxi industry?

R. Kahlon: Yeah.

S. Haywood: We have not done, to my knowledge, a recent review. But like you said, it’s hard to review something when it’s required right now, with comparing it to where it’s not required. We like to think that the vehicle inspection program has created that safety net and stops those accidents from happening.

S. Cadieux (Deputy Chair): If I could, Kristin, could you go back to your overall stats, when we talk about the number of taxis and licensees and things around the province. Obviously, from experience, I know that there are lots of accessible transportation options in the Lower Mainland, a lot of accessible taxis. We’ve got a really good fleet. What’s that like around the province and in other municipalities and so on? Is there a set percentage? Is it municipality by municipality? Are we severely lacking outside the GVRD? Can you provide any insights there?

K. Vanderkuip: It has been the board’s policy to ensure that for any municipality or local area that has eight or more taxis, there is a requirement to add accessible into that fleet. So in small centres, perhaps, where there’s a smaller fleet, there would be a challenge. We do have companies that aren’t required to have any accessible that may choose, if the market needs it, to introduce their own.

Local governments do have the authority to require accessible transportation in their local area. I’m not aware of any that do right now, but that is the set standard. There isn’t a specific percentage that the board has set as their requirement, but they do have that eight or more.

S. Cadieux (Deputy Chair): Okay. That eight or more, from a percentage perspective, makes sense if you add one to eight. But I think, without a set percentage, it would probably get out of whack pretty quick.

K. Vanderkuip: The board will ask if an application came in. In my experience, I’ve seen the board place a requirement for accessible on them.

S. Cadieux (Deputy Chair): My second question is related but on the public feedback piece and the complaints received. Would trip refusals include trip refusals where passengers with disabilities were passed over?

K. Vanderkuip: Yes.

J. Johal: The question I wanted to ask was in regards to the overlapping jurisdictions. You touched on that a little bit. There might be some areas where we could improve. I’m just curious what those would be, where you think that there might be a greater conversation and discussion in regards to that policy piece.

[9:40 a.m.]

K. Vanderkuip: Where you have two levels of government having concurrent jurisdiction, where one doesn’t supersede the other…. I think that is an area you want to look at. If I were providing policy advice, I would be recommending that that be resolved.

J. Johal: You had also raised the issue, in your presentation, in regards to fines and accountability from the industry. I’m just curious. Has a taxi licence been revoked or just taken off the road because of not following some of these issues that you’ve brought up — the licence actually being revoked?

K. Vanderkuip: By the board, limousine companies but not a taxi company to date, in my experience. In terms of national safety code?

S. Haywood: I can’t recall us suspending or cancelling one in the recent past. But there has been some voluntary surrenders, to my knowledge.

J. Johal: I just have a couple very brief other questions. You talked about, and my colleague also touched on, complaints that you received from the public. I’m going to assume that didn’t include complaints that are sent to a company or to a municipality as well. Those are just calls made specifically to government or to your department.

K. Vanderkuip: Those are calls that are referred. So Consumer Protection B.C. may refer callers. Should they have an issue with general customer service or lost items, those may be referred to the company. If it’s a municipal issue — so parking in an inappropriate area or noise complaints about taxis — those would be referred to the local government.

J. Johal: Final question. You obviously follow the industry very closely here in North America, of course. Are there jurisdictions that you see that do it well in regards to a traditional taxi industry and a ride-hailing industry as well — that have worked well together? Are there particular jurisdictions that you think have been able to weave both those entities together, where the public are being served?

K. Vanderkuip: We have been following other jurisdictions. Certainly, of benefit for British Columbia is that we have been able to see the challenge that it has created in terms of finding that perfect match. Jurisdictions have been changing significantly.

One thing that I have seen is that where there have been overlapping jurisdictions…. Looking at the United States where there have been state and local jurisdictions that conflict — those states where that’s been resolved — is one of the best approaches that I’ve seen. And we are seeing that shift in jurisdictions — where they take it to a higher level, rather than a local government by local government approach.

J. Johal: So municipal to provincial or state. In this case, the U.S.

K. Vanderkuip: The equivalent, yeah, where that was resolved. It does create challenges when a service is less restricted to boundaries.

J. Johal: May I ask one more question, one final question, just in regards to the fines that you’ve already imposed on these unregulated, I guess, leave apps that have been created. These companies that have come in…. They are illegal. Is that a significant and growing issue in the Lower Mainland here? Also, just to follow up, how many companies do you see doing that already?

K. Vanderkuip: Just to clarify, the companies are not illegal. It’s the vehicles and drivers that are illegal. We see six companies. Some of them may be related in the background, but there are six trade names out there that we are aware of in Metro Vancouver and the capital regional district.

Certainly, the popularity of the service has increased. There has been media coverage that I think has grown the interest, and we are concerned about the growth of that. It takes a lot of enforcement resources to identify and ticket those vehicles.

S. Chandra Herbert: I’ll throw two into one. One is a question around supply. The PTB has to show there’s a public need for the service. My constituents will tell me, well, on a Friday and Saturday night, that they often feel there is a need for more taxis or more ride-hail or more something. They’re often not specific on what that is.

Does the PTB, Passenger Transportation Board, do independent assessment to try and figure out what a public need really is? How do they judge that? I know some will say: “Well, X number of cabs per person. It solves the issue.” Others will say: “Give us some more here, or give a little less.” So that’s the one — how you figure out what is a public need and how you show that.

The second is…. I understand there’s a certain requirement for eco-friendly cars. I thought my colleague from the Green Party might raise the question, but he’s not able to, I guess. How does that get decided — what size and types of vehicles? What are the regulations around that?

[9:45 a.m.]

K. Vanderkuip: Those items aren’t regulated under the Passenger Transportation Act. I would recommend, for those issues, that — I don’t know if the board has been requested to attend — those questions be put to the board. I think they would be the best to answer on their policies.

P. Milobar: One assumption — I’ll hopefully get a quick answer on it — is that for any new rules or any new services coming in, the hours somebody could drive would be combined. So you can’t drive 13 hours for one company and switch around and drive another eight hours for the next company. You’d be expected, as an individual….

S. Haywood: Correct. That’s under the current regulations, as of now. If you’re driving a truck during the day, you can’t then go and drive a taxi at night.

P. Milobar: Just to follow up on the first set of questions around safety inspections. Most cab companies…. It’s like any other industry. There are very good operators, and there are some that sometimes, for whatever reason, don’t maintain some of the fleet or a couple.

Could you give a sense for everybody…? I’m fairly familiar, coming from Kamloops, with what we would have for some inspection problems with certain cabs. Could you maybe give a sense of when…? I think sometimes the public thinks it’s overkill for safety inspections. They think of it as their own personal car. Why would they let something squeak? They wouldn’t still drive it without getting it checked and fixed. Could you maybe give a sense of some of what actually does get caught that would be true safety problems on some of these vehicles, when they do get inspected, so people get the sense that it’s not an overkill reaction?

S. Haywood: Yeah, for sure. With the taxis, they operate a lot more than your regular passenger vehicle. My wife’s van…. It’s to school and back, to work and back, to the hockey rink. A taxi is going, in some cases, 18 to 24 hours every day. So there is a lot more wear and tear on those vehicles, which requires a much higher level of preventative maintenance. So yeah, the squeak here and there.

Tires, I think, are an issue that we come across. We have some issues with rebuilt-from-salvage vehicles at times. That’s a process that’s allowed in British Columbia that we work through. We make sure that those vehicles that have been written off by ICBC are repaired to the proper standard, but those can…. Again, once those repairs are made…. When they have a lot of kilometres on them, issues will develop faster than a regular vehicle.

I think lighting is something we come across quite a bit — again because it’s always in action. That vehicle is moving a lot. So it just requires that higher level of attention to the preventative maintenance.

B. Ma (Chair): I have some clarifying questions of my own, in terms of taxi licences. What I’m hearing is that taxi licences are…. Actually, I’ll ask the questions. Are taxi licences attached to a specific vehicle?

K. Vanderkuip: A taxi licence is issued to a company or individual. They may operate a large number or a small number of vehicles underneath that licence. You would have Kristin’s Cab Company. I would apply, and I’d get five vehicles. It’s one licence, technically, through us, but it’s to operate five vehicles. We issue five plates for those vehicles. In terms of the differentiation, we say licences and plates to differentiate that.

B. Ma (Chair): Okay. That helps.

In your presentation, you spoke about how ride-hailing and dispatch services are not regulated by B.C. but that it’s the actual vehicles, and the plates and the licences, that are transporting people around. Based on that, is it theoretically possible, then, for some of these app-based ride-hailing companies to legally operate if their drivers went and received licences? That’s what I’m hearing. Is that correct?

K. Vanderkuip: Yes. There are a number of services that solely are booking agents. For limousine companies, mostly, we see that. Or we see eCab, but eCab doesn’t have a licence right now. They, or Zoro, are an app that works on behalf of taxi companies. They’re connecting riders with licensed vehicles.

B. Ma (Chair): Hypothetically, ride-hailing companies can operate right now, under the current rules, if they were to go through the process that you’ve described. There’s nothing preventing them from applying and actually….

[9:50 a.m.]

K. Vanderkuip: There would be two ways to do that. One, the ride-hail company could get their own licence. Raccoon Go — one of the companies that’s connecting drivers with unlicensed vehicles and drivers right now — could apply for their licence, or the individual drivers that want to work through Raccoon Go could be applying for their own licences to operate legally.

B. Ma (Chair): Okay. Thank you very much.

R. Kahlon: Two clarifying questions. I coach soccer. I’m not allowed getting my own criminal record check to deliver it to the soccer federation. How does it work for a criminal record check? Do drivers who apply get their record checks? I think maybe you said it; maybe I missed it. If you can just clarify that.

I had one more after this.

K. Vanderkuip: That’s the jurisdiction of the local government and local police. They would set their own process for that. In my experience looking at it, the driver would go in, fill out a form and submit that to the police. The police would do the record check and check it against their standard in the background.

R. Kahlon: Then the safety requirements of a car are directly linked to the licence. Is that correct? You said the cars get checked.

S. Haywood: Yeah.

R. Kahlon: If the car is not up to maintenance, it’s directly linked to the licence — the licence is at risk of being lost?

S. Haywood: Correct.

The national safety code looks at the vehicle inspections, on-road enforcements — so tickets — and then also crashes.

R. Kahlon: Is there a way of…? I guess the challenge is this. If there’s not a licensing system, have you guys had some thought about that to ensure the cars are…? Let’s say for a ride-sharing company where a driver comes on and off. Has there been some thought or have you seen other jurisdictions that ensure maintenance of cars in that process? How do other jurisdictions look at it? Another complicated question.

S. Haywood: From the jurisdictions that I’ve seen, there are some differences in how they’re doing it. Some are having inspections at certain intervals, and some are not. From a monitoring perspective, I think something like the national safety code around that carrier would be ideal, if ride-sharing was to be brought in.

R. Singh: Just a clarification on the licensing and plates. I understand that the taxi company will have the licence, and then they give out the plates. Is there a limit on how many they can give out? Or it’s their choice, how many…?

K. Vanderkuip: A taxi company or a licence holder has an obligation of care and control of the plates. So if they are approved for 250, they can have 250 vehicles operating under their licences.

R. Singh: So they have to come to you for that approval?

K. Vanderkuip: To what we call activating a plate, getting a plate. So you’re approved for 250, you’d come to the branch, you’d provide vehicle documents, insurance documents and inspection documents and any wheelchair modification documents, if it’s an accessible taxi, you would provide that, and the branch would then issue the plate for that vehicle. You’d do that again annually for each of your vehicles to make sure that you still have that valid insurance and a valid inspection on that. Does that answer your question?

R. Singh: Yes. I’m just going after the need, like if the taxi company feels like there’s a need for more cars. Would they come to you to apply for that?

K. Vanderkuip: They would go to the passenger transportation board. And apologies. I wasn’t here in 2004 when they named us almost the same thing. But we have a branch within the ministry, and we administer the applications and issue the licences, and the board actually approves. So they would be ultimately asking the board for more vehicles.

It tends to be that that’s who gets more vehicles in the province. It tends to be established companies coming back to add vehicles to their fleet.

P. Milobar: I don’t know how best to phrase this. I’m not trying to put you guys on the spot, but since we have you here. Obviously, to try to implement something, there has to be changes to current regulations, or we’d already have an application brought forward, as you mentioned.

What would be the top “don’t go near to change” regulations, where we should be making sure that we don’t recommend massive changes within, that you see would create big public safety or transportation safety issues?

S. Haywood: Hmm. That’s an interesting question.

From my perspective, I think there has to be some sort of monitoring system just so the public knows that company A, B or C is operating safely, and that’s who they’re going to choose to ride with. Whether the national safety code system is the right one for ride-sharing, I’m not sure because we haven’t actually fit them into that yet. But that would be one.

[9:55 a.m.]

I think vehicle standards are something that I think the public really wants to rely on. They know when they get in a taxi, that taxi has been inspected and that taxi is operating as it should be. I can’t say the same for every passenger vehicle that’s out there that doesn’t go through an inspection. It’s really up to each operator how much preventative maintenance they do on that vehicle.

The last one, in my mind, is the hours of service. I think fatigue is a hard thing for the police to measure in crashes. But in a number of reports, one of the highest crash-causing factors in North America is driver fatigue. I think the hours of service are a very important process in ensuring that it doesn’t become worse.

K. Vanderkuip: From my perspective, identification of the vehicles is an issue as ride-share is introduced. These are unmarked vehicles for the most part. Certainly, limiting an unmarked vehicle from picking passengers up on the street would be…. Obviously, they have to pick them up. But not being hailed on the street, because that does create a challenge of a completely unlicensed person just pretending to be a ride-share vehicle and someone getting in real trouble.

I think identification of the vehicles is very important. I reiterate that the safety of the vehicles…. I think the province does a very good job of monitoring the safety of our commercial passenger vehicles and commercial vehicles in general.

B. Ma (Chair): Andrew, welcome.

A. Weaver: Sorry. Helijet lost a helicopter, so we’re late.

Just a comment on that. You can’t hail in ride-sharing. You can’t hail on the street, so that situation you described could not occur, because you could not hail to get in a cab. It must be app-based.

I want to get to what I see as one of the big historical problems in British Columbia and elsewhere, some other jurisdictions. What is the history as to why the person who gets the licence to have a cab…? In Victoria, it’s a plate. It’s a medallion here. I think you call it. Why is it suddenly…? They get it for $100. They walk out of the door. In Victoria, it’s worth $200,000 the second they walk out of the door. In Vancouver, it’s probably closer to half a million. I don’t know what it is now.

Why is it that we give licensee holders the licence as opposed to the province not holding onto the licence and leasing it out? Some of the resistance I’ve heard — I’ve spoken with many, many taxi drivers and taxi associations — is the fact that the value is in the medallion or the plate, and that medallion and plate someone paid a lot of money for, but it’s actually the province who gave it to them. And it costs like 100 bucks.

It seems to me like a lottery of “You suddenly earn $500,000 because you win the lottery to get 100 bucks” is a system that’s broken. What is the history in B.C. for the system we have? Do other jurisdictions have a different system? And why do we continue to issue licences in this way?

K. Vanderkuip: In the province of B.C., we don’t regulate the secondary market for passenger transportation licences. So this is the shares that are sold in a company that equate to the value of an individual vehicle operating on the road. We don’t regulate that market, but certainly, it has formed in the province for taxis and limousines, to a degree. I can’t speak to the history of how that formed. But there hasn’t been a regulation that says….

What the regulations say is that you must have care and control over any vehicle operating under your licence. So I can’t take a licence and turn around and sell a share in it in or hand a plate over to another individual and then say: “Go do whatever you like.” That must be operated, in the language of the act, by the licence holder. That’s what we regulate in the province.

A. Weaver: Are there other jurisdictions that regulate the licence after it’s been issued that we can look at or model?

K. Vanderkuip: We have seen other jurisdictions that have done a number of things, like opening up the supply, to address the secondary market. Any industry where you regulate or limit the supply of anything…. There becomes a secondary value for it, so the changing of supply has impacted that secondary market.

I know that Toronto did do some changes — and has stepped back from that but has done changes — to their ambassador plates, and differences.

J. Sturdy: My question was about supply, as well, and the definition of “public need.” Are there circumstances or perhaps you could speak to situations where the province has received applications for licences and then declined to issue them as a result of a perception of public need or a lack thereof?

[10:00 a.m.]

Also, are there circumstances where the province has issued licences and then the local government or the local authority has declined to issue their part of those licences?

K. Vanderkuip: As I said, there have been applications put before the board on a regular basis that when you read the decisions, don’t contain enough information to support that there’s a public need. That tends to be when the board declines an application.

The one that was in the presentation was Ripe Rides wanting to operate Ripe TX, which was a taxi service. That one was declined. It tends to be that the evidence put forward…. It wasn’t because the company was deemed not fit and proper, but it was deemed on the economic regulation that there wasn’t enough evidence to support it.

Now, the second part of your question was: have local governments ever declined to issue their local licence after the province has approved? That did happen with what was called the omnibus decision. That was when the board approved taxi companies from outside the four companies that have licences in the city of Vancouver to pick up.

There were 38 vehicles approved to pick up from the suburban companies, were approved to pick up in Vancouver, and there were a number of court actions. During that court action, the city of Vancouver declined to issue licences to those companies. To date, those 38 vehicles have never been allowed to operate — to pick up in the city of Vancouver.

Other than that, most local governments tend to change their number if the board approves more vehicles in their jurisdiction. Like, Prince Rupert has a number. Prince Rupert tends to increase their number if the board approves more.

J. Johal: Just to follow up on Jordan’s question there. There is this constant conversation about Friday and Saturday nights, people waiting an hour for taxis.

I’m just curious in regards to when you approve these licences. When is the last time we had a significant increase in the number? What is it, on average? Do you add every year, every two years, every three?

I’m just curious. If you’re approving them and the local government says no, there’s a challenge there. And are we really meeting those needs? I’m just curious as to how much of this comes to fruition when you say you approve these.

K. Vanderkuip: It’s the Passenger Transportation Board that approves the licences. I’m the registrar, so I issue those and enforce those licences. The board, I know, last year approved 175 additional vehicles in the city of Vancouver. There are peak-period taxis in the city of Vancouver as well as the capital regional district that operate on Friday and Saturday nights, big cruise ship days, Halloween, New Year’s, that sort of thing. So the board has implemented…. The industry has come forward with applications to try and meet some of that increased demand.

Now to the second part of your question. The only time where a city has not issued licences to vehicles that are approved by the board, that’s just the 38 that I’m aware of. That’s not an ongoing issue that we’ve seen on a regular basis.

J. Johal: So why do we still have these numbers? I know that peak-period Friday and Saturday nights gets very busy and other areas. But why do we still have this significant shortfall, it seems like, when people are waiting an hour for a cab?

K. Vanderkuip: The supply of vehicles…. Again, I think you’d want to talk to the industry about that one because they can apply at any time for additional vehicles. You’d want to talk to the board about whether or not they are approving those applications.

Certainly, I think that there is a challenge when the fleet is close in size between a Monday midday and a Friday night.

B. Ma (Chair): We’ve got about 90 seconds left. Did you want to…?

J. Johal: No.

B. Ma (Chair): You’re okay?

J. Johal: Yup. Thank you.

B. Ma (Chair): All right. That’s it for all our questions. Thank you so much for taking the time to present to the committee today.

Our next witness is Benn Proctor, who is joining us by teleconference. I believe he’s actually on the line right now and ready to go.

Benn, speaking to you right now is Bowinn Ma. I’m the Chair of the Select Standing Committee on Crown Corporations. We are going to give you 15 minutes to present, and then there will be 15 minutes for questions.

[10:05 a.m.]

BENN PROCTOR

B. Proctor: Thank you, Bowinn. Thank you for the opportunity to appear before the committee of inquiry into ride-hailing.

My name is Benn Proctor. I’m a program associate at the Wilson Center Canada Institute. It’s a think tank based in Washington, D.C. The reason I’m appearing today is because I’ve spent about a year between 2013 and 2014 intensively researching Vancouver’s taxi regulation. The results of my research led to the publication of a master’s thesis in public policy, creatively titled, I’ll say, “Assessing and Reforming Vancouver’s Taxi Regulation.”

Since then, I’ve published numerous op-eds on the topic of taxi regulation and ride-hailing in Vancouver. My expertise is on the Metro Vancouver market, but I believe that my remarks coming forward can be considered sort of a reasonable approximation for what would occur in other B.C. municipalities.

When I assessed the performance of the Metro Vancouver taxi market in 2014, it was among the worst-performing markets in North America. Service outcomes, such as passenger fares, taxi wait times and availability, and ride refusals were considerably worse in Vancouver than in other jurisdictions. Since then, Vancouver’s relative performance has deteriorated, as other Canadian cities have developed frameworks to permit significant entry of ride-hailing services, and this has been to the benefit of the passenger.

I’m certain that permitting ride-hailing under an appropriate regulatory framework is overwhelmingly in the B.C. public interest. If ride-hailing is allowed, I believe communities and stakeholders would experience the following positive benefits. Existing and, importantly, new taxi and ride-hailing passengers are the primary beneficiaries. They will see service quality improve on a number of fronts.

I estimate that taxi fares could fall by 15 to 25 percent due to the new competition from ride-hailing. So you’ll be able to get a lower-cost taxi or ride-hailing ride. Wait times would also improve significantly, with the biggest benefit coming at times of peak demand — weekend nights, holidays — when cabs are hard to come by.

The better availability will also drastically reduce ride refusal — some of you probably saw the video of a passenger who was refused a trip to New West — especially, too, if the introduction of ride-hailing also eliminates boundary restrictions, which are currently in place. These boundary restrictions forbid taxis from picking up riders outside of their home municipality. So if you’re a taxicab in Surrey and you drop off in downtown Vancouver, you can’t take a return fare home back to Surrey or anywhere else. It’s really inefficient, because you deadhead, you waste time, you waste fuel, and it’s bad for the environment.

Just on the topic of ride refusals, data from 2011 showed that about 20 percent of riders were refused rides in downtown Vancouver. The most common reason given was that they were headed to a suburban destination, where the driver would be unable to pick up a new fare.

Consumers will also benefit just from the presence of choice and competition afforded by ride-hailing, including the ability to access low-cost, shared or pooled trips, which these services offer, or, you know, ordering larger-capacity vehicles or even luxury-capacity vehicles on a night out. Choice is generally a good thing.

Importantly, since the quality of service is improving, the total pie of taxi and ride-hailing passengers will grow significantly. This phenomenon has occurred in virtually every market where ride-hailing has been permitted. This will have a number of additional benefits for B.C. communities, but the important take-away is that as the total growth in passengers grows, the new supply creates its own demand.

Some of the communities that will benefit, or stakeholder groups…. One I’ll say is that the B.C. labour market will benefit from the new employment and income opportunities in the ride-hailing sector. While these will never be high-paying jobs, a key tenet of economic analysis has revealed preferences. So if drivers are opting for the ride-hailing sector, it’s an indication that those jobs are better than the alternative available. It might be a chance to earn extra income on the side or a type of employment available if someone’s just recently lost their job. While it’s sometimes kind of in vogue to denigrate the gig economy, in reality, the benefits of flexible work arrangements is why we see so many drivers signing up for the sector.

Importantly, existing taxi drivers, those who drive right now for the Vancouver taxicabs, are unlikely to see any material declines in their incomes. That’s because they’re right now charged prohibitive lease fees by the current taxicab owners and shareholders. These lease fees, which can range from $180 to $200 on a Friday or Saturday night or a monthly lease fee for $4,000, will fall if there is any loss in taxicab passengers. Drivers consider their take-home pay, and not the amount of…. So they’ll bid accordingly.

While it’s possible that some drivers might see slight income declines overall, other drivers could benefit from greater choice and employers and utility gained from more flexible working hours.

[10:10 a.m.]

Other benefits from a growing passenger transportation market are public safety and more options to get home after public transit stops running. There have been safety dangers around Granville Street, where you’ve got lots of people milling around after the bars have closed, unable to get home. You might also have instances of reduced drinking and driving, although the data has yet to support that.

I’ll say that the availability of low cost and reliable ride-hailing will also benefit the environment, as it will reduce the need for individuals to own private automobiles. This will encourage greener trips, such as walking one way or taking public transit one way and requesting an affordable ride home at the end of your trip. I also believe that B.C. residents with disabilities, on the whole, will benefit both from the employment opportunities and greater access to rides, including the possible development of niche services under a regulatory framework that allows ride-hailing services in B.C.

I’ve listed a long list of beneficiaries from the introduction of ride-hailing. There will be one stakeholder group significantly harmed by the introduction of ride-hailing, and that is the owners of B.C. taxicabs, who will see the value of their licences or shares decline precipitously. Shareholders who bought at peak prices, possibly with financing, stand to lose a lot from the introduction of ride-hailing.

Often I’m asked by journalists to choose one statistic or indicator to sum up the deficient state of the passenger transportation market in Vancouver. Is it taxis per capita, passenger wait times or fare prices? The indicator I always point to is taxi share values, which represent the value of owning a provincial permit that authorizes you to operate a taxi vehicle. I’m certain that the topic of share values will come up throughout the inquiry, but I think it’s worth dwelling on this point for a bit.

Historically, taxi shares in Vancouver have been a great investment to make. In the 1950s, permits sold in Vancouver for, reportedly, $5,000. By 1980, we have evidence of taxi permits selling for $30,000 each. When the Motor Carrier Commission looked at this issue in 2001, they estimated that Lower Mainland taxicab company share values ranged from $120,000 to $420,000. The lower values were for regions like New West and Coquitlam, while the higher range was for the valuable Vancouver permits.

Just to cite a few more data points. A Passenger Transportation Board decision in 2007 noted that a half-share in a Richmond cab company in the year 2000 sold for $84,000. Seven years later that same share had more than doubled and sold for nearly $200,000. In 2014, I estimated that a full-share in a Yellow Cab Vancouver company retailed for about $800,000.

The best comparison I can think of to explain taxi share values is to compare it with an asset like a vacation rental property. When you operate a taxi vehicle, you have a number of costs that you need to cover: the driver’s time and wage and the costs of vehicle depreciation, maintenance, fuel, insurance, electronic dispatch. Likewise, if you own a vacation rental, you need to cover the costs associated with renting. It could be marketing the property, hiring cleaning services, taxes and paying utilities.

You don’t charge a rental price for your vacation property based on the actual costs associated with operating. You set it based on demand for its use. That demand likely varies throughout the year. Maybe it’ll be highest over the winter holiday break or in the summer, when kids are off school. You also rent it during shoulder season by dropping the price. If you’re considering selling the vacation rental, you factor in the anticipated future profits that you would earn from renting it against the price buyers are offering before making your decision to sell.

Taxi permit pricing works in a similar fashion. Because licences are restricted, drivers offer to rent the use of vehicles from licence owners — in this case, the shareholders of the taxicab companies. The rental price is based on what drivers expect to earn over the term of the lease.

Again, looking at the Vancouver market, in 2013 a B.C. Supreme Court submission by the Vancouver taxicab companies noted that the median lease fee for a 12-hour Friday night shift was $180. For a Monday night shift, which is the taxi version of shoulder season, it might only be $80. Under the daily leases, the driver is also responsible for fuel costs, but the owners supply the vehicle and dispatch services. Other lease arrangements I mention include the monthly lease for $4,000 and an annual lease for $48,000. I’m speaking about the Vancouver taxi market here.

Anyway, this high price that drivers pay for accessing the permit, just like the high price that weekenders pay to rent a vacation property, is what supports the taxi share valuation. But here it’s worth emphasizing that the vacation rental…. The shortage is because we’re not making any new beachfront property. Conversely, Metro Vancouver’s taxi shortage is an artificial one. It has been created by a deficient regulatory system.

[10:15 a.m.]

I think one of the questioners mentioned New York City, where medallions are auctioned off to the highest bidder, and the financial value of the shortage is at least captured by the public purse. In B.C., it only costs $200, plus $50 per additional vehicle, to apply for a licence. But since new licences, especially to new companies, are rarely issued, the existing permits can be bought and sold for tremendous value. When I looked at the Vancouver market, share values were more that double that of the next closest Canadian city.

Now that I’ve just explained share values, I want to explain why I believe the introduction of ride-hailing or even new taxi supply is unlikely to lower driver income. If the introduction of ride-hailing lowers the amount of revenue a taxi can earn, drivers will reduce the price that they are willing to lease a taxi. This is based, again, on their take-home pay. Instead of paying $200 for a Saturday night shift, they will offer to pay $40 for a Saturday night shift. But their take-home pay will be the same.

You don’t have to take it from me. As Dan Hara, who is the taxi expert leading the provincial review, said in a 2013 affidavit to the B.C. Supreme Court on the subject of the 37 suburban taxis that would be granted access to the Vancouver market on Friday or Saturday night: “Any lost revenue per taxi will find itself expressed in a lower willingness by taxi drivers to pay for the premium Friday and Saturday night shift lease. Licence holders receive the excess value from licence rights and bear 100 percent of the loss from any decline in the value of that right.”

In Vancouver, we have a system that has enriched a few taxicab holders at the expense of the B.C. public interest. The only explanation I can provide for this grave public policy failure is one of regulator and legislator capture by the incumbent industry. Instead of regulation that is in the public interest, we’ve got regulations that are in the taxicab shareholder interest only. This is evidenced by the lack of access to new taxi licences, fares that are set too high and originating area restrictions which disallow licences — you know the Surrey example — from picking up in Vancouver, even if they just dropped off a passenger in Gastown, forcing them to deadhead home empty, wasting fuel and time.

Please don’t take any criticism of the regulatory framework that was developed personally. I sincerely believe that being an elected politician might be one of the most difficult jobs there is. Essentially, you have to know the ins and outs of every key public policy issue important to British Columbians, be it whether or not to build Site C, how to develop solutions to the opioid addiction crisis, creating affordable child care or responding effectively to softwood lumber tariffs.

These questions are extremely challenging, to say the least. You have to grasp the intricacies of complex policy issues, all while satisfying the preferences of the electorate, and your job is on the line every four years, possibly sooner in a minority government. It’s an impossible task, but to effectively legislate, the most important input that you can have is good information — clear, honest, evidence-based information on what the likely impacts of a policy change are. Throughout the history of B.C. taxi regulation, the incumbent industry has not provided you with that. Rather, they have provided public authorities with misleading and sometimes outright false information to enrich their shareholders.

Currently they are playing a game of “heads, I win; tails, the taxpayer or the public loses.” For the last 70 years in Vancouver, the coin has been coming up heads. New competition has been restricted, and taxicab owners have profited enormously. Now, as ride-hailing threatens the profitability of their protected monopoly and the coin might possibly come up tails, they are actively obstructing the entry of these beneficial services to B.C. residents by calling for a level playing field which would make ride-hailing more expensive and remove many of the benefits I articulated earlier.

I believe reasonable disagreements regarding a prosperous British Columbia exist. Some might believe that B.C. needs a little more health care or protection of environmental services, while others might stress the benefit of lower taxes and employment opportunities in the natural resources sector. But I think everyone can agree that a prosperous British Columbia is one where citizens have access to many goods and services at a low cost. Attempts by vested interests to make taxi and ride-hailing services expensive and scarce should be rejected by politicians, as it is against the public interest.

Instead, new regulations on ride-hailing should focus on issues that the passenger can’t observe — promoting vehicle safety and driver background checks. Attempts to cap the number of vehicles or institute a minimum fare should be rejected, full stop. Importantly, as the cautionary tale of regulatory capture in B.C.’s taxi industry demonstrates, the province needs to build good, healthy institutions that will regulate ride-hailing and the taxi industry with good stewardship going forward. Right now it appears that technology innovations merit a lighter-touch regulation for both sectors, but performance outcomes should be monitored going forward.

[10:20 a.m.]

B. Ma (Chair): Perfect.

B. Proctor: That’s it for me. I want to thank you guys for the opportunity.

B. Ma (Chair): Perfect. Very well timed. I’ve already got a bit of a speakers list going.

R. Kahlon: Thank you, Mr. Proctor. I guess what I got from your presentation was that we should just flip the switch and all the problems will be solved — if it was that easy.

You mentioned Dr. Hara, who is doing the provincial review. Dr. Hara wrote a report for the city of Vancouver — I think it was a few years ago — where he said that every jurisdiction that completely deregulates has started to re-regulate. So obviously, it’s a challenge for all governments, this issue. It’s not as easy as perhaps it sounded like, the way you proposed it.

I guess what I would ask you is the reverse of what you said. What do you see as the challenges with it? I heard all the positive things that you think would come from it. What do you see as challenges, whether it’s the amount of cars on the road…? Do you see any challenges, or do you think that’s the perfect solution?

B. Proctor: I think you should focus new regulations on things that a passenger can observe before they get into a vehicle. I don’t know if a vehicle’s brakes have been checked regularly or if it’s being maintained. I also don’t know if a driver has potentially a criminal record or a background check. So these are two items that I would focus regulation on.

I’m just promoting that information for passengers — so not allowing drivers who’ve had a criminal record or not allowing vehicles that can’t pass the safety inspection on the road. That’s where I would focus the regulation.

Going back historically, there has been some mixed results around taxi deregulation. But recently, with the technological innovations in GPS and cell phone technology, it’s basically solved a lot of the trust problems and the pricing problems that existed in those instances.

Vancouver, as many folks cite, is one of the largest North American jurisdictions without ride-hailing. Areas like California have had ride-hailing regulations since 2012. That’s now six years ago. It really does seem like the proof is in the quality of the service and the fact that passengers and drivers are flocking to this service.

It doesn’t seem like the claims…. I know Hara’s report was from two or three years ago, but I just don’t believe those claims are valid — that we’ll need to re-regulate the ride-hailing industry. But I think it’s important to have a good framework in place, in case, ten or 12 years down the road, we notice that Uber and Lyft might be a duopoly. They might be charging customers a little more.

It’s important that you have really good staff who are in place who can say: “Hey, look. We’re noticing some problems in this market. Let’s amend and adjust.” It’s sort of performance-based regulation.

R. Kahlon: Just a follow-up question to that. I got that you disagree with Dr. Hara on that portion, which is okay. People disagree on things.

I guess my other question would be…. Obviously, you’ve looked at all that other jurisdictions — say, London or San Francisco. All the government agencies that oversee it, all the regulations are always moving, it feels like. I feel like every time I go on I hear about a jurisdiction now making another change, another jurisdiction making another change. San Francisco, I think, was the earliest adopter, and they’ve made tons of changes.

Do you see, now, that there’s a consistency in jurisdictions, or do you still see that jurisdictions are struggling with the challenge and adapting and moving overall?

B. Proctor: I think it’s a new issue, and I agree that they are adapting and moving. I think that’s what you should…. We should view regulation as a living document with the goal of promoting the B.C. public interest. But I think, generally, it’s accepted now in the community that these ride-hailing services are delivering significant benefits for urban municipalities around the world, and we need to think about how best to continue to integrate them.

R. Singh: Thank you, Mr. Proctor. My question is about wages. For a long time, the taxi industry has been known for decent wages and what the taxi drivers have been making.

What I get from your presentation, with the ride-sharing coming in…. Do you think it would bring in more precarious work and a loss in a decent wage or minimum wage for the workers?

[10:25 a.m.]

B. Proctor: No. I would quibble with the fact that the Vancouver taxi industry pays a decent wage. When I looked at it, historically, wages in B.C. for drivers are much lower than the general economy.

To use the example of a Friday and Saturday night shift, when I looked at 2014, drivers had to bid anywhere from $180 to $200 to get access to a vehicle for that Friday night. In addition, they had to bring the taxi vehicle back full of gas. So you could say maybe $50 for a gas tank. That meant, really, they needed to earn in excess of $400 in fares just to accumulate minimum wage over a 12-hour shift.

I’ll also add that those working conditions are highly stressful for drivers, because if you don’t get a trip somewhere or, in fact, you get a bad trip out to an area where you can’t pick up, you might not make enough to cover the lease for that night. So I would say the existing work environment for a taxi driver is unenviable to begin with. The introduction of ride-hailing will create some new opportunities for these drivers.

I don’t think taxi driving will ever be a really high-paying-wage job, unless you actually own the permit that allows you to enter the market. That’s because, basically, the pool of people who can drive a taxi, especially with GPS phones nowadays, is essentially quite large. It’s anyone with a driver’s licence and a vehicle on hand with these ride-hailing services. So if the wage of a taxi driver ever got up to, say, $25 an hour, a lot of people would volunteer and say: “Okay, I’ll drive that.” This big supply of potential drivers creates a downward pressure on wages. Unfortunately, it’s kind of a market where it’s tough to really earn significant incomes.

S. Chandra Herbert: Thank you, Mr. Proctor. You mentioned questions around boundaries — of eliminating all boundaries so that you could stop what you called deadheading. It’s certainly been an issue that I’ve noticed.

My question is related more to…. On the boundary issue, it certainly could help my constituents. I live in downtown Vancouver. There’s a lot of business downtown, and I understood boundaries were created to ensure that suburban communities also were well served on, say, a Friday or a Saturday night.

If you eliminated boundaries, do you have any concern that communities which may not be as dense, which may not have as much business, would see a reduction in service as business flocked to the area where I live, where there is a lot of business, with the clubs, the downtown scene? You might see a reduction in service in some communities. Is that an issue?

B. Proctor: Yeah.

S. Chandra Herbert: Sorry. I’ll just give you one more question, if that’s okay. It’s just the question of pricing. You suggested that pricing for customers would be reduced. One of the things you see in the news around ride-hailing is that on certain evenings and for certain events, pricing, of course, goes through the roof. I think one of the stories I read was about New Year’s Eve, a night when we often hear concerns about lack of taxis. They had enough ride-hailing services, but one gentleman ended up paying $1,000 that night because of surge pricing. So you might have the service. It just costs a lot more. Is that an issue as well?

B. Proctor: Sure. Let me start with the first question. I think that’s a great question, the issue of: will certain areas be underserved?

I would say that if we kept the really lousy regulations in place, which have sort of capped the number of taxis in the area, yes, there is a risk that taxis in Coquitlam would leave that area and spend most of their time picking up passengers in Vancouver. But it’s sort of a catch-22. Are they picking up…? If they’re operating in the area with the most demand, they’re certainly providing a service to passengers.

The idea that certain jurisdictions won’t be served in the future could be resolved completely by loosening and opening up the sector to more taxi vehicles and ride-hailing. As we’ve looked at the introduction of ride-hailing, we see, especially in New York City, that the outlying areas in New York got much better service in the boroughs because there were more vehicles available.

The problem is with the cap on licences. You should not restrict the total number of vehicles. Unfortunately, that’s what they do in B.C. So I would say that is kind of the issue.

[10:30 a.m.]

On the issue of surge pricing, first I’ll say this. There’s a benchmarking report that looked at the cost of Uber and Lyft in 20 U.S. cities. It found that in 39 out of 40 instances, ride-hailing was the cheaper option for passengers. I think, overwhelmingly…. Because there’s now no shortage of taxi licences and drivers don’t have to pay that high overhead in terms of a lease to the shareholder or owner, you see fares drop. There’s now no longer this pointless sort of artificial shortage of licences.

I will say that in some instances, I think it might be appropriate to put a maximum cap on the charge and include regulations for really good transparency so that passengers know what they’re paying the ride-hailing companies. You’re right. You hear these media stories where someone has paid $10,000 for a ride home on New Year’s Eve or something. I think they’re eventually refunded, and stuff like that. That might be a question for regulators going forward: should we set a very high cap to prevent any price-gouging?

Tentatively right now, I don’t think you should. I think these problems will work themselves out in the market. I think having the ability to increase your prices by 25 percent or something can get a lot of drivers on the road and can benefit drivers’ pocketbooks. Additionally, it can ensure that passengers are being served. If someone is willing to pay a bit of a surge price to get home, that’s a good service to have.

B. Ma (Chair): Mr. Proctor, we’ve got two more questions here, and about four minutes. I’m going to go to Stephanie, and I’ll ask you to keep your answers a little bit shorter so that we can make sure Andrew gets his question in as well.

S. Cadieux (Deputy Chair): Hi, Benn. A question for you. You made a statement about believing that there is opportunity to increase service for people with disabilities through the introduction of ride-hailing. Can you explain where that has happened, and how?

Certainly, from my perspective — and I use a wheelchair, Benn — while service has not always met a terrific standard here with the taxis, we do have a good fleet and a lot of very, very good drivers and operators. I personally can’t see how any expansion of ride-hailing would improve that. I can’t see that there’ll be drivers with accessible vehicles, given the cost, and I see the increase in competition actually encouraging the drivers of accessible cabs to pass on the more expensive, more difficult, accessible fares.

B. Proctor: Sure. That’s a good question. I know I’ve been told to keep my answers short.

B. Ma (Chair): Mr. Proctor, I’m going to interrupt you for a second. Sorry, just one second. We’re going to switch it up a bit. We’re going to hear Andrew’s question and Jas’s question, and I’m going to ask you to answer all three at once.

A. Weaver: First off, I wanted to thank you, Mr. Proctor, for your exceptional presentation, where you dealt with many of the misconceptions that are out there — the issue of a decent wage, the issue of the effect of ride-hailing on the taxi industry globally and, in particular, taking head-on the claim that somehow we have to create a level playing field.

Why that’s a critical point that you raised is because we’re not playing the same game. You create a level playing field if both teams are playing baseball together, but if one team is playing football and the other is playing baseball, it doesn’t make sense to talk about creating a level playing field. So I do very much appreciate that.

My question is very simple and very straightforward. It follows up on what my colleague from Vancouver–West End here is…. Do you know a jurisdiction out there, anywhere in the world, that has put in place a surge pricing max-cap regulation? In particular, are you able to tell what that surge max-cap regulation looks like and what it does in terms of how to determine what the max is?

J. Johal: Mine is also a very simple question. Andrew brought up the issue of surge pricing. We’ve talked about some of the challenges that jurisdictions like Austin or London have had. Could you, Mr. Proctor, tell us of a jurisdiction or jurisdictions that have done this well, where they’ve merged the traditional taxi industry with ride-hailing as well, on the public policy side. It’s so that we can take a look at — whether it’s maybe in this country, in the U.S. or in Europe — where they have done it well.

[10:35 a.m.]

B. Proctor: Okay, great. Thanks a lot. I’ll tackle the question on disabilities first. I appreciate, and the questioner is right, that operating a taxi vehicle with a lift to allow wheelchair access is more expensive.

When I said that allowing ride-hailing will benefit persons with disabilities, I’m taking a broader view of disabilities. Right now lots of people might not be able to drive — could be due to an eyesight condition, due to a heart condition or might just need to take taxis or ride-hailing vehicles more frequently because they walk with a cane. In these instances, the greater supply of ride-hailing vehicles is a very good benefit to them.

In other jurisdictions, you’ve seen Lyft, I think it is, that operates a service where you get a text in advance. These are employment opportunities. We have drivers who might be deaf or unable to communicate verbally, and they have employment opportunities to drive the vehicle. So there are those benefits there.

I think the thing I would say to regulators is to monitor the issue of service for persons with wheelchairs closely. If you see it falling, institute some requirements to resolve the problem and to actually make the service better. You might say that for every 65 ride-hailing vehicles on the road, they have to have one car with a wheelchair accessible thing. I don’t know what the exact number is. But there’d be ways to resolve it. The key is to have good regulation and close monitoring to make sure that service outcomes for persons with disability are continuously improving.

To Andrew’s question, I apologize. I actually don’t know if I could name a regulation that’s successfully instituted a cap on surge pricing. I know you’ve got three days of hearings, so I hope that someone else will be able to address that question.

Then I think it was Jas’s question on what jurisdictions that I point to. California was an early adopter, in 2012. I think they’ve developed a really good regulatory framework.

Just recently, Calgary. One thing that I commend them for doing — and it might be my bias as a researcher — is they’ve checked the data quite closely and monitored the number of rides. One of the things you see in the Calgary area is while taxi rides slightly decreased under the first year of ride-hailing, there were 1.4 million trips generated through ride-hailing and only a very small decrease in taxi trips. So you really see the market growing.

I think it makes sense to have good indicators and to follow them closely. That way, B.C. can continuously track the performance of the market and ensure that ride-hailing is in the public interest in B.C., which I think it is.

S. Cadieux (Deputy Chair): Thank you, Benn. I just want to say thank you for your expansion on your comment there. That was appreciated.

I don’t disagree with your commentary about the added benefits for a large portion of people with a variety of disabilities. I just wanted to highlight the issue related to wheelchair accessibility and the additional costs that are incurred by companies that are required to maintain those vehicles. So thank you very much.

B. Proctor: No, thank you. It was a great question.

S. Cadieux (Deputy Chair): I think Bowinn is going to end our session.

B. Ma (Chair): That’s right. Thank you so much, Mr. Proctor. We are going to let you off the line now. I do appreciate you taking the time to speak with the committee. Have a wonderful day.

B. Proctor: Hey, I really appreciate it. I’ll be watching and listening to the hearing on line. Have a nice day.

B. Ma (Chair): Wonderful.

Our next witnesses are from the Vancouver Taxi Association. Please come up to the table. We’ll ive you a minute to get settled in.

[10:40 a.m.]

Thank you so much for being here today. For your presentation, I’m going to give you 15 minutes and turn my iPad around so you have a sense of where you are. Then we’ll have 15 minutes for questions. We will do one question, one answer. We’re going to try it out and see how that goes. We might switch it up for future witnesses. But for now, we’re going to do one question, one answer. Provided the answers are short enough, then we can get a lot of questions in.

I’m going to start the button, and then you may proceed. Go ahead.

VANCOUVER TAXI ASSOCIATION

C. Bauer: Thank you very much for providing the Vancouver Taxi Association the opportunity to discuss its proposed solution for the lack of timely and convenient taxi service in Vancouver and elsewhere in the province. Our proposed solution also has the support of the B.C. Taxi Association, who you’ll be hearing from later this afternoon.

I want to start by saying we’re not here to defend the current situation. We know that the needs of the public are not being met and that frequently people are waiting far too long for taxi service. We need improved access and a payment system based on the latest and best technologies to provide the public with the taxi service it rightfully is demanding and deserves. But the solution here is not to allow anyone with a car or an app to enter the taxi market. That will destroy the existing taxi industry and, as a result, have other harmful consequences contrary to the public interest.

I have provided you with a recent New York Times article noting that the entry of Uber, Lyft and others into the market in New York has actually resulted in much greater traffic congestion. A study found that, at any given time, more than a third of the taxi providers are riding empty on New York streets, causing traffic to crawl at an average of 4.7 miles per hour, down from 6.5 miles per hour five years ago. That’s, obviously, not in the public interest.

There is no public interest in having an oversupply of taxis, which will occur in an unregulated market. Not only will that cause traffic congestion, but it will also lead to destructive competition between taxi providers, where it is difficult, if not impossible, for anyone in the industry to make a reasonable living. That is not a problem for taxi providers; it’s a problem for the public as well and as a whole.

In a regime that promotes destructive competition, there is no economic incentive for any taxi provider to incur the additional costs of providing taxis for disabled customers or to spend the time and money to work with industry groups and government to achieve broader public goals in terms of the efficient and environmentally conscious transportation of passengers. In our view, this can’t be addressed through public subsidies, which would be very costly and extremely difficult to administer.

We’re not saying that the existing regulatory system should be maintained. It has proven to be unable to provide sufficient supply to meet demand. But we believe there is a way to implement a performance-based regulation ensuring that there will be a sufficient supply of taxi providers at any given time to provide timely service while, at the same time, meeting other important public policy objectives such as the prevention of destructive competition. That is by granting the authority for a single B.C.-based umbrella entity to provide an integrated taxi service and combining an app-based service with existing taxi dispatch and hailing services within each existing municipal boundary.

[10:45 a.m.]

The interests of the public as well as the existing industry can both fully be met in this integrated system using a common app shared by all taxi providers as a complement to the existing taxi dispatch and ride-hailing model. There will be a mixture, in our proposal, of the existing taxi licence holders operating under both the common app and through the existing taxi dispatch and street-hailing model, supplemented by people providing taxi service through the use of their own vehicles and operating exclusively under the common app. The operation of the common app, which will be jointly owned by all participants on a voluntary basis, will be charged with recruiting, training and generally overseeing app-based taxi providers.

There will also be a splitting of taxi licences, which will double the number of taxis so that vehicle shift changes will not be necessary. Through sophisticated algorithms and constant monitoring of demand and performance, the coordinating entity will be able to ensure that there is a sufficient supply of taxi providers at any given time to provide taxi service within five minutes to all taxi users. At the same time, there would be no surplus supply clogging up streets, leading to a situation where taxi providers aren’t busy and, therefore, not able to make an income.

In this way, the investments and livelihoods of the existing taxi industry are preserved while, at the same time, allowing for newcomers with their own vehicles to participate in an industry in a way that is economically viable for them as well. This homegrown, made-in-B.C. solution will also facilitate common regulatory standards, including insurance, to be applied to all taxi providers.

After consulting many technology companies — including Uber, Lyft, Piccolo and Ripe — we decided that a local company by the name of Kater would be best able and suited to provide the common app to be used by all taxi providers in the province and to engage and manage the new entrants into the industry in a manner that ensures a sufficient supply of taxi providers to meet demand in a timely manner at all times.

This made-in-B.C. solution avoids all the problems that have accompanied a deregulated industry, where different app-based taxi services have been allowed to participate freely, regardless of the consequences. We understand that there may be questions on whether this one-app solution will work. We welcome the opportunity to prove that it will work.

The app will be made available in a convenient manner to everyone, including all visitors to the province. We will work collaboratively with all parties to ensure that public policy goals are being met, and it will be a system where taxi providers can make a reasonable living and not be exploited.

In summary, the problem is not that there is no longer a need to control the number of taxi providers. Rather, it is that the existing regulatory system has not been flexible enough to ensure that supply will always be able to meet demand. Our new made-in-B.C. one-app system will be able to do that while, at the same time, fully protecting the public interest in all respects: timely service; fair prices; public safety; full and equitable service to all persons with disability, who we have worked very closely with for the last five or six years; and the achievement of overall transportation and environmental goals by providing timely and efficient services that meet the needs of all segments of the public.

Finally, to summarize the response to the two questions that we were posed, for the committee:

(1) Our integrated model would apply to the entire province. No communities would be left out. That will not be the case in a deregulated system which allows the Ubers and the Lyfts to enter and exit at will. They will only choose to service highly populated areas, leaving a number of communities without an app-based taxi service.

[10:50 a.m.]

(2) There would still be a role for the Passenger Transportation Board in ensuring that safety and other requirements, such as fair pricing of taxi services and performance standards, are being met. However, the board would no longer have the authority to control supply. That would be handled entirely by the local umbrella entity given the authority to coordinate taxi service throughout the province.

Thank you very much.

B. Ma (Chair): Fantastic.

A. Weaver: Thank you for your presentation. While it was innovative, I will say I do not think government should be in the business of picking individual companies as winners or losers. I think it would be inappropriate for government to pick a particular company like Kater to put a one-size-fit-all model. Fundamentally, it goes against everything I believe in, which is the need for competition in the marketplace. This would actually take competition out of the marketplace.

While I think it’s innovative, I’ll tell you up front I can’t support this one-size-fit-all solution because it strikes me as…. You know, if I want to take Black Top or Yellow Cab, I’d choose that. If there’s a one-size app, it knocks the competition out.

I want to come to something that you said and ask a specific question. You said here: “But the solution here is not to allow anyone with a car or an app to enter the taxi market. That will destroy the existing taxi industry and, as a result, have other harmful consequences contrary to the public interest.”

Now, I would argue that’s an assertion without evidence to support it. Can you provide an example or examples of jurisdictions around the world where the taxi industry “has been destroyed” through the introduction of ride-hailing. That’s inflammatory rhetoric that I think needs to be justified.

C. Bauer: I can answer to our friends back in Calgary, two companies in particular: Checker Cabs and Associated Cabs. Uber was allowed to operate in Calgary. They started with a few hundred cars and have now gone up to between 3,500 to 5,000 Uber vehicles operating there.

The cost to operate a taxi in Calgary is $600 per week. That’s insurance and maintenance and fuel. The drivers now…. Because of the likes of Uber, many have parked their vehicles. Most of them are making just what it takes to make that living — $120 a day. That’s the experience I have. I have spoken with several cities across Canada, several cities across North America, on the destruction of their industries and people having the opportunity to earn a fair wage.

A. Weaver: A follow-up question is: why have I not read a single story in any newspaper anywhere in the world on any taxi company being destroyed by the introduction of ride-hailing?

C. Bauer: Maybe “destroyed” was not the right word to use, but it has definitely caused a destruction to their industry, absolutely, and the right for them to earn the proper living and take money home to their families.

R. Kahlon: I guess the part I’ll agree with my colleague here on is that this is innovative. I’m glad to hear from you that you acknowledge some of the challenges that the public is facing at this time. I have a couple of questions, but I’m going to let everybody ask a question. I’ll come back for the rest later.

Earlier we had the public transportation ministry staff here. There were some questions posed around…. We know that there’s more demand than supply on the road. So my question is, and it was posed by…. I can’t remember who, but someone posed the question. Have you applied for more licences in the past to meet that demand?

C. Bauer: For the last five years, we’ve been applying for licences with the Passenger Transportation Board. We have not been successful. The application that we received approval on earlier this year was sitting with the Passenger Transportation Board for, I believe, 18 months. We couldn’t get a decision out of that.

We had an application before the Passenger Transportation Board for 85 accessible vehicles, of which we were only granted 20 of those vehicles. And those vehicles, or 20 percent of our fleet, had to come off of the road during peak times. Again, it goes back to the omnibus decision, where the 38 was held in abeyance by the City of Vancouver.

[10:55 a.m.]

R. Singh: My question is about the innovation that you are talking about, like a central system. Have they already done their work? Do we have it; how it will operate? Secondly, do we have any examples of any other municipalities where this has worked — the taxi industry working with the ride-hailing?

C. Bauer: I can’t speak for Kater. I will let Kater speak for them. But I have seen their platform. As I said, we’ve met with several — Uber, Lyft — and asked if we could come with them and participate in this. We were declined on that. Kater’s platform and what they have is fantastic. When they do their presentation, you will be very impressed with it. I’m sure you will. So we feel comfortable enough to go with that.

I’m sorry. What was your second question?

R. Singh: Do you know of any other where this has worked, as a central…? Where the taxi industry and the ride-hailing have worked together.

C. Bauer: I do know, in some cities around the world, Uber has chosen…. I’m not sure what those cities are, and I’m sure Uber will speak to that this afternoon. I do know, in some cities around the world, where Uber has chosen one taxi company to work with.

No. This is the first of its kind, which is why it makes it a made-in-B.C., homegrown solution. It would set a precedent, and it would set an example for the rest of the world to say that B.C. has come up with a platform that works for everyone.

J. Johal: Thank you, Carolyn, for your presentation today. It’s important. I’m glad that you acknowledged that there is a problem and that the public’s needs are not being met with the present system.

Andrew raised the issue in regards to government picking winners. In this case, it would be Kater. Let’s just say we went down that road. Are you saying that they should be given a monopoly? If so, how long would that monopoly last? Are you saying that this is a system that would be baked in and stays for a year, two years, and that other ride-hailing services would not be allowed to operate in the Lower Mainland?

C. Bauer: Well, I have to ask you, first of all: what is a monopoly? I have to question that. What is a monopoly? The taxi industry is a no-profit-on-every-ride cooperative, yet we get categorized as a monopoly. In some respects, it’s the elimination of the supply that has created the word “monopoly.” But if we use the word “monopoly,” then we should be using the word “monopoly” also for Uber because that is a monopoly. That is one that is coming in. It’s taking over. It’s controlling all cities, controlling all….

I do not believe that the Kater app, with the connection to each dispatch company to allow us to know where our fleet is, where our passengers are, using this app, is a monopoly at all. I believe, given the opportunity to put this platform forward, this homegrown solution for B.C., and giving us the time to show you that it can work, you will be pleasantly surprised, and you will be the first province in Canada to do this.

J. Johal: I understand what you’re saying. I understand that they’re local, and you’ve created this app. It’s all easy to say: “Well, Uber, Lyft, some of these larger companies from outside of Canada coming in…. They’re the big bad bullies.” But at the same time, you’re also saying that local apps that could be created within this market if we kept it open…. We’re also saying to them: “You’re not going to get access to this market. Only one company is.”

C. Bauer: Well, that’s not true. I’m sure that if the committee voted or decided that our solution was the best, what would stop Uber or Lyft from going under the umbrella of the Kater app?

J. Johal: In regards to choosing supply, you’re saying that this entity, which you supply…. That’s a big leap for a government to take. Could you elaborate on that — why you think we should be doing that and handing over that responsibility?

C. Bauer: The Passenger Transportation Board itself, and the Motor Carrier Commission prior to, has regulated this industry long enough. It’s easy to talk and look at numbers and say, “There’s not enough supply,” or “You haven’t given enough information to show that there is public need for this supply, and therefore you’re declined.” It’s time that we own it. We’re the ones that are receiving the complaints. We’re the ones that are being screamed at. We’re the ones where the drivers aren’t arriving, and people can’t get that timely service.

We need to take control of our industry. We need to be responsible for our own industry. It’s not up to government to be responsible for our own industry. This is why we’ve come with this one homegrown solution that will allow the one-app solution for the taxis as well as anybody that wants to bring their own vehicle on.

[11:00 a.m.]

P. Milobar: Just so I understand this completely, you’re saying the Vancouver Taxi Association, with this proposal, is fine with boundaries being wiped out and Burnaby taxis picking up fares in Vancouver and people not having to deadhead back and forth. Boundaries are no longer an issue?

C. Bauer: No, I’m not saying that, sir. I said existing municipal boundaries should be kept in place — but using the one app and using the new technology that is available to us. If a taxi in the Vancouver area is not available, that app can direct it to the closest vehicle, whether it’s Richmond, Whistler, Surrey, if they’re travelling through that jurisdiction. That’s what I’m saying.

Opening municipal boundaries…. The word “deadheading” that I’ve heard, to me, is an irresponsible word to say. The vehicle that is picking up that passenger from downtown Vancouver, a Surrey vehicle…. They have no way of knowing that that vehicle is actually going to go back to Surrey. With this one-based app, they will know that.

P. Milobar: Just so I’m clear. The app’s intention would be…. A Surrey taxi drives someone into Vancouver. It would be able to pick up someone in Vancouver if they were seeking out another ride back out to Surrey.

C. Bauer: Absolutely. If there were no Vancouver taxi companies available, none available for the app, within a split second, it goes to the closest vehicle, whether it’s Surrey, North Shore, Burnaby, Richmond. It goes to the closest vehicle.

E. Bari: If I could add a little bit on that. It’s not only the passengers who are going back to Surrey. It could be anybody who’s waiting for a vehicle longer than our waiting time, which is five to ten minutes. So, basically, if someone is looking for a vehicle and all the Vancouver-based or the local companies are busy, whichever vehicle is available in that area will be able to pick up that fare. It means it could go anywhere.

Again, deadheading, in a taxi…. There’s no way we can find out where that passenger is going unless the driver turns around his meter and talks to the passenger: “Okay. Which way should I go?” That means it will resolve the issue of people waiting for a longer time, especially on weekend nights, especially on special event days. So that’s what it means.

P. Milobar: Can I just clarify? I could have sworn in here — I’m trying to find it — it said a guaranteed five minutes, and you said five to ten minutes. So which is it?

C. Bauer: It’s five minutes, sir. It’s five minutes what we’ve set up with the Kater company — five minutes with the Kater platform.

A. Weaver: I have a follow-up again. With Kater, right now — as a Vancouver-based, I believe, app-based solution — what’s stopping you from working with them today? What’s stopping other taxi associations from working with them today? Are you expecting government to pay for the development of some kind of big, monster, provincewide thing?

I’m trying to get some more info. I just don’t see why we would need…. We are talking about enabling ride-hailing. I’d be excited if Kater were to come in, because there’s a B.C. solution that I would use. Actually, I would stay with taxis, but people would use it. I’m a taxi guy. I don’t get in ride-hail, right? My generation is not going to fuss around with apps. I just want to get in a cab.

What’s stopping Kater from just working now with you, and are you expecting the province to fund this massive kind of one solution?

C. Bauer: Let me answer that question. Absolutely, no way. There is no money expected from government whatsoever to set this up.

The Monark Group, Kater, has been working diligently to put this app in place. It is in place. We just need the approval to see if we can run with our homegrown solution. Once we have that…. I mean, there’s nothing stopping us from integrating in this system at this point — with the exception of if other ride-hailing services, such as Uber and Lyft, are able to operate here. Then we will be overwhelmed with too many companies out there operating. It will just turn into, I think, a free-for-all, at that point, for taxis.

And no, it’s not going to cost the government a dime.

[11:05 a.m.]

S. Chandra Herbert: Thank you for the presentation. I think there are two ideas in here, which I’m trying to separate, but maybe they can’t be separated. I’m not sure. One is the Kater app for all taxis in B.C. — and, potentially, ride-hailing companies, if they wanted to be part of it. The second solution, or proposed, is to take the decision around how many licences come from the Passenger Transportation Board and give it to some other umbrella association to make that decision.

I’m trying to understand that part of it. Who’s on that umbrella body? How is it different from the Passenger Transportation Board? And what would stop…?

My understanding is that the taxi and ride-hail companies run that other body now, instead of the Passenger Transportation Board. If so, where would the public interest, versus the private interest, be represented in such a body? Obviously, there are commercial interests for the taxi industry that they would want to have represented at such a body. Our job is to ensure not just that private interests are successful but that the public interest is too. So how would that work?

C. Bauer: It wouldn’t be to take away from the Passenger Transportation Board. The Passenger Transportation Board still needs to remain in effect for policy, procedures, certain regulations, criminal background checks. To actually take the Kater app itself and to develop it, using the technology that they know how to use….

Believe me, when Dr. Weaver speaks of…. He’s not an app person; neither am I. So I really can’t speak to algorithms and how they work. But technology is out there now to be able to predetermine where your trips are, how they’re going to wait, how long they’re waiting for, and hot spot so many areas.

With this predetermination and these algorithms that Kater’s young team have been able to put together and will be able to present to you, I believe, tomorrow, they’ll be able to determine how many vehicles are needed, subsequently being able to provide the Passenger Transportation Board with enough data and information so that they will be able to see. And the data will be open for viewing by any government official.

S. Chandra Herbert: The Passenger Transportation Board would still be responsible for the decisions around how many licences, or is that left up to…?

C. Bauer: No, that would be left up to the algorithms, and that would be left up to the control of the entity that has the app. We would know…. As an example, if we have a football game that’s breaking and a concert breaking, the app could be opened up immediately to say: “Okay. Right now we need 5,000 drivers on the road.” That’s what we need, and that app would open up and allow the drivers to get on the road.

P. Milobar: Along those lines, then, just so I get a better understanding. I’m sure we’ll hear from Kater as well.

It opens up for 5,000 drivers, we’ll say. Does it give preference? Let’s say Uber and Lyft decide to join in to be a part of this app. Does it take the first 5,000 drivers that come along, or does it prioritize for the remaining 1,000 taxi licences that haven’t been put on the road yet that day and then start to fill with Uber and Lyft and other companies?

C. Bauer: It’s my understanding, in meetings with the Kater group, that once the app is open, it’s whoever actually signs on to the app. In a lot of cases in the ride-hailing industry, they log on or log off when they choose to come in and drive. So most of them…. I can’t quote myself on that, but I’ve heard that a lot will just sign on when it is peak time to come in, because they know there’s business out there.

B. Ma (Chair): That concludes my speakers list. Were there any other last-minute items? No.

Thank you so much for your presentation. We really appreciate you coming out here today.

Our schedule is getting a little bit mixed up. We’re very, very grateful to have the B.C. Taxi Association willing to help accommodate the mixup in our schedule.

I am going to be recessing the committee for, let’s say, six or seven minutes. Let’s reconvene at 11:15 to give the B.C. Taxi Association a little bit of time to get set up. They are doing us a favour in jumping up ahead of schedule.

The committee recessed from 11:09 a.m. to 11:17 a.m.

[B. Ma in the chair.]

B. Ma (Chair): Our next witness is the B.C. Taxi Association. Thank you again for accommodating this short notice change and coming up an hour ahead of schedule. Thank you so much for being accommodating.

Like the previous presenters, I will put 15 minutes on my iPad. When it is finished, we will have 15 minutes for questions. Please go ahead and proceed.

B.C. TAXI ASSOCIATION

M. Kang: Hon. Chair, Deputy Chair and Members, my name is Manmohan. I am commonly known as Mohan Kang. I am appearing before this committee in my capacity as the president of the B.C. Taxi Association, which is a non-profit organization currently representing approximately 80 percent of the taxi licensees in the province with the authority to operate 1,871 taxis.

Our membership is from one end of the province to the other end, from Fort Nelson to Prince Rupert, Penticton, Whistler, Tofino, Port Hardy and in between. There are 13 duly elected directors who represent all the regions of the province, and I have had the honour and privilege to be elected president, unanimously, for the last 19 terms. I have been involved with the taxi industry for four decades or so.

What is the impact the ride-hailing would have on different communities across the province? The association has brought the concerns and issues of all the small and large taxi companies to the table, as all of you are well aware that these mom-and-pop operations and small taxi companies have limited time, money and professional help.

In a civilized society, their rights and well-being are very important, and to be taken care of, the association has filled that gap for the last 19 years. They deserve the fairness and equality before justice — which, in the current scenario, is your committee.

The impact of TNCs would be different in different localities. It is our understanding from statements made by the Uber management that they are financially and practically viable in bigger cities which have highly dense population.

Recently I attended the new mobility workshop conducted by TransLink on December 4, 2017, in Vancouver. I met with Mr. Michael van Hemmen, manager of Uber, to clarify, asking: “What is the population base where it is financially viable for Uber to operate?” Mr. van Hemmen stated three places: Metro Vancouver, Victoria region and Kelowna. He also stated that they work better in a dense population. Note that I did not ask that question to quote in this public hearing, as at that time nobody knew if we would be permitted to appear before this committee.

[11:20 a.m.]

It is a fact that in a number of small places in the province, the mom-and-pop taxi operations and small taxi companies have become the de facto essential service to their localities upon which residents depend on a 24-7 basis. They operate and survive on very thin margins of financial viability. The general notion that allowing ride-sharing in those places will enhance the available transportation services for the residents is a far-fetched and short-term impractical idea, as, at the end of the day, the residents of those places will ultimately suffer from such decisions.

Many of the taxi companies in the smaller population centres will not survive and will essentially be replaced by ride-sharing companies with lower overhead costs but with no reliability. The ride-sharing concept is mainly based on part-time drivers. Who is going to hold them responsible when, in the middle of the night, at 2 or 3 a.m., somebody wants to go to the hospital or some other emergency and no ride-sharing driver is available to take that call? The maximum penalty to the driver is that he may get deactivated, but that is after the fact.

If there was a taxi company available, then, on a 24-7 basis, the customer would have proper treatment from the hospital in a timely fashion, and the taxi company would have taken care of their emergency calls too. Furthermore, there are taxi companies in Fort St. John and Williams Lake providing heavily subsidized, accessible service to their communities, despite only having, on average, eight to ten accessible cabs in a week.

The association very strongly opposes implementing ride-sharing with a blanket rule all over the province. It sincerely believes that it will destroy the essential type taxi operations who were providing a safe, professional and courteous taxi service to customers in a responsible manner. By replacing those taxi operators with the TNC, the real loser will be the general public and the taxi drivers whose livelihood and families depend on their job.

What regulatory regime should be established to allow ride-hailing to operate in B.C.? TNCs are taxi companies. The association has previously stated that Uber is nothing but a taxi company in disguise. Accordingly, TNCs should be regulated the same way as taxi companies. Very recently the European Court of Justice ruled that Uber is a transport service company, requiring it to accept the strict regulations and licensing within the EU as a taxi operator. The link is below there.

Safety standards. Any entrant should be at the level that the taxi industry already has — full police criminal background checks, including biometric fingerprinting, and proper training to ensure public safety. The taxi industry is highly regulated in B.C., and for good reason: to protect drivers and, most importantly, to protect the general public.

Currently taxi drivers in B.C. require a class 4 licence; a chauffeur permit issued from law enforcement in the city they operate in, which includes a thorough police background check; commercial insurance; a licence approved by B.C.’s transportation board; and a national safety code safety certificate.

The B.C. Taxi Association believes that any process to eliminate any of these basic requirements will result in lowering the safety standards currently in place. Any background check requirement should require full biometric fingerprint and police background checks. Many TNCs’ background checks, such as Uber’s, are also sent to third parties and are not full police background checks. This has left gaps in the background check process which we had and has led to some drivers with serious criminal backgrounds being allowed to drive.

Taxi drivers also currently require training such as that conducted by the Justice Institute of B.C. We believe that safety could be compromised if training requirements are eliminated by the government.

While the B.C. government has proposed that the taxi and ride-sharing providers require the same safety standards, TNCs should be required to meet the current standards. The B.C. Taxi Association does not support lowering those standards. A few months back Uber was stripped of their licence in London due to lack of corporate responsibility. We would not want the same behaviour to occur in B.C. The link is there.

[11:25 a.m.]

The national safety code. In respect to regular inspections, they are currently conducted under the national safety code. TNCs should be required to have the same mechanical inspection as taxis, conducted by the national safety code every six months. The national safety code prohibits taxi drivers from working more than 70 hours per week. The same rule should apply to both the taxis and the TNCs. We look forward to learning how the government will monitor the number of hours the TNCs operate to prevent a safety hazard to the general public.

The insurance coverage for the TNCs should be the same as the top taxis; that is, they should be charged commercial rates. A level playing field would obviously adhere to the same rules. Taxis and TNCs should be charged the same rate, and any extra liability insurance required by taxis should likewise be required by the TNCs. It would be unfair for the general public to subsidize auto insurance for the TNCs.

Accessible vehicles. Currently B.C. has one of the largest accessible taxi fleets. Unfortunately, operating accessible vehicles is far more expensive than regular taxis, and current operations have been subsidizing the accessible fleet operations. If TNCs are allowed access to the market, taxi companies are simply not going to be able to afford putting the far more expensive accessible vehicles on the road. The B.C. Taxi Association suggests that the government should require a certain percentage of TNC vehicles on the road at any time be accessible to ensure service to the community that requires it.

Fair pricing. We propose that consumers are protected from unreasonable surge pricing as well as protection for the taxi industry against predatory pricing. The B.C. Taxi Association strongly believes that there should be the same base rate for both TNCs and taxis — an even playing field.

The association strongly believes that all the commercial carriers, like taxis and TNCs, must have an even playing field. As much for that reason, we also would implore that red tape in Metro Vancouver be reduced or eliminated to address the conflicting regulations and to ensure that the current taxi fleet in the Metro Vancouver region is better and fully utilized to improve the customer service.

The geographical boundaries system needs to be overhauled to meet the current need of the general public, which would at the same time, also address the public safety issue. It would create a compatible ground to compete with the TNCs, and it would also help our equipment to reduce the greenhouse gas emissions.

Taxis. The TNCs must collect, submit and pay appropriate taxes — local, provincial and federal — the same way the taxis do.

Safeguarding employees. The taxi drivers’ rights are fully safeguarded in B.C. — minimum wages. No driver can be let go without due process. The TNC drivers should have the same type of protection.

Single app. We support the development of a single taxi and ride-sharing app. Kater has proposed an app to achieve this concept.

Safety. The B.C. Taxi Association supports measures aimed at improving safety. It has already installed other technologies to help improve public safety, like safety cameras. Recently the association was instrumental in getting safety cameras installed in the Fraser Valley for seven companies, in June 2017, when there was so much uncertainty.

Passenger Transportation Board. The B.C. Taxi Association is fully supportive of the Passenger Transportation Board. We believe there needs to be some government regulatory body to ensure that the taxis and any new entrants such as TNCs adhere to rules and regulations. There needs to be proper enforcement for both the taxis and the TNCs. The Passenger Transportation Act needs tweaking to moderate it to meet the needs of the passenger-directed vehicle companies in a more streamlined manner, as they have done in the case of faster temporary operating permits.

[11:30 a.m.]

Giving the authority to the municipal governments to issue taxi licences has been counterproductive. That was the reason the exemption was taken away in 2000 by the ruling party at that time, for justifiable reasons. The B.C. Taxi Association also believes that there should be control of the number of taxis and TNCs. Currently two transit agencies in San Francisco are asking for data from TNCs. They’re looking at how to control taxi issues.

The San Francisco Municipal Transit authority was quoted in a letter as saying: “Much of the increase San Francisco has experienced in vehicular traffic can be attributed to the huge increase in the number of ride-hail vehicles operating on city streets. The commission’s prior and current rule-making process clearly has a significant environmental impact.”

The link is there. Not having a cap on the number of vehicles does not help drivers or consumers. The B.C. government should look at the experience of other jurisdictions, such as San Francisco and Ireland, and consider a control on the number of taxis and TNCs. Through the central transportation board there should be assurances and/or regulations that smaller companies will not lose their service to the larger communities and the smaller communities do not lose taxi service due to unfair competition from the TNCs.

B.C. Taxi is working to ensure the economic viability of the taxi industry and its investors, while continuously improving on its customer service and public safety. This is respectfully submitted by the association.

B. Ma (Chair): Thank you so much. Questions?

R. Kahlon: I’ll summarize a little bit of both, and you can tell me if this captures some of it. You’ve mentioned having some sort of cap on how many TNCs. The terminologies are all different from everyone, so let’s just say TNCs. You recommended in your submission that there should be some sort of cap on that, and then you mentioned some sort of common pricing. Is that correct?

M. Kang: Yes. The reason why we said about the cap is that if there’s an unlimited number of TNC vehicles or taxis, it is counterproductive in the sense that nobody is going to make a living. Secondly, we are defeating the purpose when we talk about the Paris Agreement, which Canada signed. We said that we would reduce the greenhouse gas emissions. Here what we are doing is putting more vehicles on the road and doing vice versa.

R. Kahlon: Sorry, just to clarify the question. You’ve got members in Victoria, in the suburbs and then in the Interior as well.

M. Kang: Right from top to bottom. If I start counting, my time will be up.

R. Kahlon: No, that’s okay.

M. Kang: Right from Fort Nelson…

R. Kahlon: Small towns.

M. Kang: …you can count down anywhere — Kelowna, Penticton, Princeton.

R. Kahlon: That’s okay. I don’t need you to go through all of them. I’ll let everyone ask a question. I’ll ask my follow-up one after.

A. Weaver: I detect resistance, obviously, from your organization to the introduction of ride-hailing. You’re doing your service to your members. My question to you is: why do you think that this is not actually good for the taxi industry?

Let me give you an example. To me, the most innovative taxi organization or taxi company in British Columbia is in Kelowna. They have Current Taxi. It’s a fleet of Teslas. Now, I can tell you that Tesla is a go-to car. They’re going great guns, because they recognize that they need to be innovative to compete in the modern economy, and they were innovative. That’s the cab I take every time I get there, because of their innovation. They realized a niche in the market. They responded. The market has responded to support them.

My concern with your resistance to ride-hailing is that it actually clamps down on innovation in British Columbia. I’ve seen some really interesting developments in the B.C. taxi sector as a direct consequence of fear that some of these ride-hailings will come. Apps are beginning to emerge, whether it be in Burnaby or Vancouver and elsewhere, and that is really healthy.

I’m wondering: what is the fear? I’m trying to get a sense of what the fear is, because I see innovation. I look at jurisdictions around the world where they work side to side, and I see a lot of…. I’ve spoken to taxi…. There are people in the Kootenays. There are people elsewhere that actually want this in, because they’re losing money. They have to rent the car from somebody who owns the licence or the medallion or the plate, whatever you call it, and there are days they lose money.

This is about pushing our society to be more innovative, and I don’t understand the fear. Maybe you can clarify that.

[11:35 a.m.]

D. Guilbault: I’m not sure if it’s a fear, Mr. Weaver. Back when the B.C. government dismantled the Motor Carrier Commission, as taxi people, we lobbied very hard to keep us regulated. We know our industry better than anybody, and we knew if we were in a deregulated environment, the losers would be the public. There would be no need to check your cars. There would be no need to upgrade your cars. There would be no need to have your drivers go to any kind of education facilities. All that would be out the window. Just jump in the car and do what you want to do.

We saw the same thing at the airport, where the airport said: “Your cars can only be this old. Your drivers have to do this.” The airport was the first one to say: “Level 2, or you’re not driving here.” The Vancouver Airport is the proudest airport in the world, by saying: “We have world-class taxi service. Nobody can compare.” They went around the world, taking a look at other taxi programs, and said, coming back: “Hey, we’re the best.”

It’s not the fear as much as there’s a front door and there’s a back door. What I would concede is you can’t mix oil and water. Our cargo isn’t packages and parcels; it’s flesh and blood. If there is a disparity in safety standards…. Don’t need a national safety code. It is a federal law that a background check be done for the vulnerable persons part of the law. I haven’t heard that said yet. That’s a requirement. It’s not a suggestion.

I embrace the new technology. We’ve heard our friend from Vancouver here talk about the new technology. We embrace it. I know that when the Vancouver company put their application in, which they said took 18 months, they had approached Tesla. Their application said they were putting Teslas on the road. But it was a two-year delivery until they could get them. The need is now; the need isn’t two years from now.

A. Weaver: Just a quick follow-up. I do appreciate that. I forgot what I was going to…. I was listening. Can I come back?

B. Ma (Chair): We can come back.

S. Chandra Herbert: To go back to the boundary issue, I just wondered. You suggested boundaries needed an overhaul in order to make it competitive with transportation network companies. You’re not against transportation network companies being in B.C.; it’s just trying to make sure that there are adequate ways to work together. What would an overhaul of that kind look like? I know it is frustrating for people to see a Burnaby cab and not be able to get one if they’re in downtown Vancouver, for example.

M. Kang: Well, the boundaries were put in there for good reasons for a long, long time. Since then I have grown old, not wiser but old. I have seen the difference. When we are in the present situation, we need to serve the general public, the customers. That’s the cardinal rule. If we are going to break that cardinal rule and just think about ourselves, we are doing something which we call sacrilege. So why, when they say the overhaul of the boundaries…. When we’ve got so many cars in Metro Vancouver, why can we not make the best use of them, because it is going to be a win-win situation for everybody?

I hear the question asked: “All the other suburban places will lose the service.” The thing which we don’t discuss or we don’t bring it up…. Since 2007, it started, since the Olympics. The downtown has become a hub for entertainment. Everybody rushes. That’s where the action is. I’ll give you a figure. From October 2014 till September 2015 — at that time, we had 426 companies working there. We had the majority. Out of 525, 426 were our members. We drove over 421,000 trips, keeping the figure at 52 percent. Normally, they call it up to 50 or 60 percent. The suburban taxi companies drove 460,000 trips into downtown in that one year. Those were the stats given to me, which can be verified.

[11:40 a.m.]

When you’re taking all the people there, then we all know for a fact that there’s a problem for the people who use those. Why not use something which you have in hand and simply…? We don’t want to take the first step, a baby step. That’s the reason why I said the boundaries need to be overhauled.

The government has to do something. The red tape must go. Since 2012, only bad decisions. Thirty-eight cabs, suburban taxi companies, are unable, first due to legal, then due to city hall…. Moratorium, moratorium, moratorium — then the bylaw change on April 12, 2017.

If they were going to pick up only 20 trips within that seven hours, they would have served more than probably close to 200,000 people within that period when…. When you need something, why pretend? When you’ve got something, use it. Where is the public safety?

B. Ma (Chair): We’ve got Mr. Milobar, followed by Mr. Weaver.

P. Milobar: It got covered off. Thanks.

A. Weaver: I just wanted to follow up…. I knew what I was going to say. Everything you said I think we’re hearing today not only from you but from others, with respect to the importance of safety — safety of vehicles, safety for passengers. Talking about this regulatory regime is precisely why we’re here: to understand what the regulatory regime is that needs to be introduced.

I think you’re getting a broad consensus. I would expect that people recognize that you can’t just have anybody on the street driving anyone any time they want. That, I think, is off the table.

Again, I think it’s important that we…. We had a presentation from Vancouver Taxi Association. They talked about Kater. That’s really exciting. Why would we want to try to stop Kater working with Burnaby cabs and Vancouver cabs and North Shore cabs and Delta so that they have an app where it allows the person to drop down in Burnaby, to actually pick someone to go back to Burnaby but not to pick someone to go around downtown. There’s a really exciting option there. I suspect that this is where the innovation is, but if we proscribe everything and say, “No, we’ve got to do more of the same, and no one else can play this game,” it strikes me that it’s holding back. I say that with respect.

I know that many people come to British Columbia. The first thing they do when they get out of the airport is they pull out their app. They come here from Silicon Valley and from elsewhere because they’re inspired by the innovation that we offer. Then they wonder why we’re not doing it. Why are we the one jurisdiction in North America that does not have ride-hailing? We’re the only one of any size. We’re one of the only ones in the world — major capitals.

The purpose of this committee is to ensure that we hear the issues that need to be incorporated. But I think the boat has passed, in my view. We need to embrace this here, but we need to do so in a manner that protects people — the taxi industry and the passengers — at all times.

I just wanted to say that with respect to your regulations, I completely agree.

D. Guilbault: I think, as well, we should have no embarrassment that we don’t have ride-sourcing available yet. I think there should be some pride that our government here has taken a long hard look. They’ve watched the failures of ride-sourcing throughout the world, and hopefully, we’ve learned from that.

My fears are subtle, and they’re blatant. One of the subtle fears I have is terminology. If you look at the news and you see the pictures of people waving their hands for taxis, that is ride-hailing. Nobody else can hail a ride except a taxi. If you open Craigslist and you take a look, there are people in there offering ride services: “I’m going this route. Pay me money, and I’ll take you.” That is ride-sharing. Illegal as it is, that’s what’s happening.

Last week, a four-day week, I had nine applicants come looking to change taxi companies, to come and drive with our company out in Surrey-Delta. Four of them were from Richmond. Five were from Vancouver. I’ve been doing this for 22 years, and I always want to know why. “Why are you here? There are six companies in Surrey. Why do you want to come and drive with me?” The four boys from Richmond all had the same answer. What they told me was: “We now have five illegal operators in Richmond. We have families to feed. All we know is taxi. Our business has been killed.”

[11:45 a.m.]

From that perspective of being in a regulatory environment, it appears that we can’t stop them. So what’s going to happen when we allow somebody to come?

S. Chandra Herbert: A question I asked earlier — I think you were here — was around eco-friendly. Priuses, I think, are common in the taxi world right now, and maybe it’s Tesla next. Is that required through the Passenger Transportation Board, or does that increase your opportunity to get a licence, if you show that you’re going greener? How does that work?

M. Kang: Well, since 2007, it has sort of become the Passenger Transportation Board policy that any new vehicle or any additional vehicle should be eco-friendly. That’s why most of the cabs that you see in B.C. — especially in Metro Vancouver, CRD and, quite a bit, most of them in Kelowna and maybe not all in Kamloops — are eco-friendly.

D. Guilbault: There is economics involved in that as well. There’s nowhere else in the world right now where you’re paying $1.40 for a litre of gas. It’s very expensive to fuel your vehicles. To the side of it being expensive here for taxis, we have been under the taxi cost index in the PTB’s regulations and their formulas as to how and when we can raise…. Once a year it’s reviewed. Last year the industry took a look at the increase. They said: “You know what? We’re not going to push it. We’ll leave it status quo.” The prices have remained the same for two years.

B. Ma (Chair): I’m going to allow two more questions, just questions. Mr. Johal and then Mr. Weaver, you’re going to ask them one after the other.

J. Johal: I just was reading your presentation here. Thank you so much for coming in today. You’re talking about how there needs to be a control on the number of taxis and TNCs, as you call them. You refer to two transit agencies in San Francisco asking for data regarding TNCs. The basic assessment here is that it’s leading to extra congestion on the streets of San Francisco. I think one of our previous folks that spoke said there are about 3,200 taxis in B.C., roughly. If ride-sharing were to move forward, what kind of number do you think would be appropriate? Do you think the industry…? If we agree on rules and regulations, what would be appropriate in regards to allowing ride-hailing?

B. Ma (Chair): Before you begin, we’ll ask Mr. Weaver’s question.

A. Weaver: My question with Richmond…. I wanted to follow up on that because that’s really important. There are four companies; I know of two of them. The question is enforcement. What lack do you see in the area of enforcement? Frankly, somebody regulating should be ordering these cabs and fining them $1,000 each time somebody picks up. The app producer is not the person who gets fined; it’s the driver. Are you seeing a lack of enforcement there?

D. Guilbault: I think the passenger transportation branch is doing what they can. They have been issuing a number of, I think, $1,150 tickets. But these ride-share companies have said, straight up and blatantly: “We’re not going to stop. We’ll gladly pay those tickets. We’re not stopping.”

B. Ma (Chair): Would you be able to answer Mr. Johal’s question as well?

M. Kang: Mr. Johal, at this stage, I can’t give you the figure of what number would be the proper number. What we said in the submission was that also tweaking the Passenger Transportation Act would make it much easier for the taxi company to get it faster to meet the need. Their biggest complaint has been, so far: “Oh, the PTB is not giving us the…. It takes a long time.” Their hands are tied, with the regulations.

You’ve got the authority to untie those things, especially concerning section 28(1)(a), the public need. If you tweak it, if you can make it much faster, then there won’t be any complaints, and probably we’ll find something else to complain about.

B. Ma (Chair): All right. That concludes our time for this. Thank you so much, again, for coming up an hour early. We appreciate your time here.

M. Kang: We are grateful we were given the opportunity to appear and, especially, to talk face to face with Dr. Weaver.

[11:50 a.m.]

B. Ma (Chair): Our next witness is Sumeet Gulati.

Mr. Gulati, you had sent something in to us as well, right? I think that it might be in our package. Like previous presenters, I’m going to put a 15-minute clock on my iPad, and then you’ll have 15 minutes for questions as well.

SUMEET GULATI

S. Gulati: Firstly, thank you for inviting me here. I think it’s an honour for me to be an expert witness to your committee. I am an economics professor at UBC. I specialize in environmental economics. Over the last ten years I’ve been studying urban transportation and its impact on our environment, so some of the comments here would be related to what I have experienced in the way our transportation systems affect our environment.

You asked me about the impact of ride-hailing on different communities and about the regulatory systems that we should probably think about. When it comes to impacts, I want to start with an assumption which I think is….

You will see a slide there that says it lowers the price per chauffeured trip. That’s the primary assumption which I think has been borne out by data for ride-hailing across different jurisdictions. What it does is it lowers the price per trip that someone drives you, from point A to point B. I think that’s well accepted. What that also does is it reduces not just the monetary price but the ability for you to find a ride quickly and get somewhere quickly. So it’s also the question of reducing the time that’s available, and that’s needed. In the literature, in transportation, especially in developed countries, your real value is not the $20 or the $30 you pay, but the cost of time, and that’s very crucial.

That’s, I think, a big deal which has resulted, then, in fairly large impacts across different jurisdictions. Here is an example. And thank you for introducing the concept of TNCs, with TNCs being transportation network corporations. It seems, in San Francisco, that the data says that 20 percent of all local vehicle miles travelled within a week are from transportation network corporations. So I think the impact is huge.

What that does is that once you’ve lowered the cost of transportation services, especially when someone’s driving you, which lowers the cost of taking a trip somewhere quite significantly, you will expect a significant uptick in economic activity. That’s indisputable. You’ll see people having greater access to work, to recreation, to retail, etc.

What you also need to recognize is if you are going to have an uptick in economic activity from transportation services, from vehicle miles travelled, you will see, obviously, more vehicle miles travelled. In fact, that San Francisco study and some other studies have found that at least up to 50 percent of those extra trips are new trips. They’re not trips that would have happened if these transportation network corporations weren’t around, if the prices weren’t lowered.

[11:55 a.m.]

I think the impact would be significant economically, but what that means is that if we have more vehicle miles, we’ll also have more congestion. We’ll also have more accidents. We’ll also have more pollution. Because I care about those things, I’m going to try and talk about how we can help make these things more amenable to the environment as we lower the costs of transportation.

Now, the other thing is that some of these studies have looked at how this interacts with public transit. It is clear that in the short run there is some substitution away from public transit. Now, it’s not always that, right? If you get the conditions right…. I think it’s really important to get the conditions right, especially as we look into the future, where it’s not just Uber and Lyft and other corporations that offer you riding through someone driving you.

Way out in the future, when we have self-driving cars, the cost per trip is going to fall even more. As those fall, we need to recognize that we need to make the conditions to make people not want to own vehicles in the long run. That’ll reduce the number of overall trips, and people will still get to places they want to as they like.

What it does, the big value from introducing something like ride-hailing, is it reduces our underused capital. There are a whole lot of cars that sit around in parking lots every day and on weekends which aren’t doing a lot. Once you look way out into the future, if you get the conditions right, you get more of this underused capital into our economy, working as it can. So what it also does is it can, if you get the conditions right, reduce the need for parking in dense neighbourhoods.

You can increase ride-sharing. It’s a lot harder for me to find a person who’s going to UBC every day and get them to drive with me. But if there’s a high density of ride-hailing, the apps can connect these people really efficiently and do a whole lot more ride-sharing.

In terms of regulation, before I get to how to make these things more complementary, I’ll just pay a little bit of, I guess, attention to why we have traditional taxi regulation. I think some of this was brought up just recently. We have traditional taxi regulation because the regulators were concerned about ride quality.

Ride quality is not just about how the car is and how the driver drives, but it’s also about safety. That was an issue traditionally, because there’s a locational monopoly. Once you negotiate with someone, you’re really at their mercy. There are not a whole lot of cars with which you can start negotiating. Once you’re in a car, you’re in that car. That locational monopoly required a government oversight, which needed, then, a regulation of quality.

The other thing that you needed regulation for was it’s hard to match riders and drivers because there were few cars in a large, sometimes not very dense neighbourhood. It was hard to find people to get on, so you needed some sort of central agency which cleared riders and drivers and got them to connect in a thin market. And then, regulators are concerned about there being meaningful employment. You want to keep a taxi service going, and you want to make sure that the drivers want to stay as drivers, so you want make sure they have meaningful employment.

Now, as technology changes, all this changes quite significantly. I think technology allows, as long as you have full information…. If you have full information about the kind of driver who’s coming and the kind of car that you’re getting, you can easily regulate quality through people adding their own, in a way, ratings to what their ride quality was. Again, the important thing here is full information.

The other one is that apps are very efficient, much more efficient than traditional clearing houses where you call up someone and try and connect riders and drivers. App technology is much more efficient at connecting drivers in a thin market with their passengers.

Finally, once — as the New Yorker calls it — the gig economy is taking off, the flexible working atmosphere that is being created is reducing the need for us to focus on one type of employment as being your primary gainful means of employment. So flexibility might change the need for us to regulate whether this is meaningful or not.

Before I stress too much on that, I think it’s important to focus on labour conditions, not just on the environmental conditions.

[12:00 p.m.]

This is not my area of expertise, but I did a survey of jurisdictions across North America. I think it’s fairly common to have background regulation checks. In my mind, as an economist, it’s not about reducing the number of drivers that are on the road, but it’s about making sure the passenger who gets offered a ride by a certain driver knows whether this driver has any background that is a problem, and then let the market deal with that. Clearly, there’ll be some criminal things that should be regulated, but otherwise , you want to make sure everyone has access to that information.

I think we need to be worried about labour issues like workers compensation. Like I said, you need to have full information. So you want full disclosure on the driver and the vehicle information that shows up on the app, and this has been regulated in certain places. You want to make sure that if there are any traffic violations by the driver, that shows up on the information of the driver that is coming to pick you up. And you need some sort of minimum mandated insurance coverage.

Now, related to this, is that it’s not just about ride-hailing. The gig economy is TaskRabbit. It’s Airbnb. A lot of this gig economy is sort of, in a way that I think is not appropriate, going underground. I’m not one to recommend that we start imposing regulations left, right and centre, but I think what’s really crucial is that we need to somehow be able to evaluate whether this gig economy is working for the kind of ethics that we care about for our labour market.

How you do that is not by the government going out and measuring it or, I think, putting in a lot of regulations but actually making sure that there is data for us to evaluate this. Data disclosure by all of these network kinds of corporations that are coming into B.C. should be mandatory — not just mandatory to the people who are responsible to regulate this but also force them to make anonymized data publicly available so that someone like me and my students can go download the data. Or someone sitting out in India or China can go out and download the data and see what the impact of these new corporations is for our economy and for our labour standards.

Now going back to the complementarities. I have about five minutes. The complementarities of making sure ride-sharing and the future transportation network of our province is good for the environment. I think, from my experience, the cost per trip that we spend already is too low. There’s a whole bunch of externalities — pollution, noise, open access to roads — that have not been priced.

It’s not just about ride-hailing. I think it’ll help make ride-hailing more environmentally friendly, but I think, generally, you want to think hard about congestion pricing when you start thinking about the future of low-priced transportation trips. That’ll reduce congestion. That’ll also make people do more ride-sharing within ride-hailing, which is something that we can’t do personally through the ownership of cars.

I think parking fees are too low. I don’t see any reason why I should have access to a free parking spot outside my house. It’s a costly thing, in terms of…. I’m taking away good, clean, possible green space from the society. It’s also another open-access problem which makes people…. Especially in high-density areas, it makes the whole idea of looking for parking spots another reason to impose externalities on others. I think we should raise parking fees.

We should be concerned about our fleet being too big, and we should be concerned about ride-hailing and then future self-driving cars being too big. We should target large vehicles, which cause bigger damage when they have accidents, which use too much greenhouse gas. We should target them further with things like weight-based road access or gasoline taxes. This will also encourage ride-hailing to purchase more fuel-efficient light vehicles.

As we want to make this more complementary with our transit infrastructure, we need to think about making sure there’s infrastructure so that there is a pickup or a waiting infrastructure around transit. So people can use transit for their predictable trips and, for the last mile of connectivity, use something like a ride-hailing app.

Lastly, I think one of the things that Uber has been in the news for is the fact that there was a data breach which was not revealed for a while. This is going to be true for all our gig economy operators. There is a federal law which, from what I’ve understood, does not have a time limit on breach disclosures. If we have the ability in British Columbia to tighten that law and go beyond the federal law, I don’t see why….

[12:05 p.m.]

B. Ma (Chair): Wonderful. Thank you so much. We have a speakers list, beginning with Mr. Chandra Herbert.

S. Chandra Herbert: Thank you for the presentation. You’ve helped draw attention to some areas that I think we may not have considered.

Downtown Vancouver is getting more and more congested. It seems there are more vehicles all the time. I’ve been reading that transportation network companies have led to what they argue is a 3 to 4 percent jump in traffic in downtown New York, so congestion has gone up, as opposed to going down. They thought they were going to pull cars off the road, but in fact, they have put a whole lot of cars on the road, with subway ridership declining rather than growing.

What should we do to deal with that issue? Obviously, if we were to add more supply, as people seem to be arguing we should, through ride-hailing, more taxis, etc…. Is it simply congestion pricing that would reduce that? I don’t want to go backwards when we’ve been making forward movement to reduce the amount of single-car usership in downtown Vancouver.

S. Gulati: That’s exactly right. I don’t think we should be focusing on a ride-hailing company, in particular, or just ride-hailing trips, in particular. I think lowering the cost per trip is a good thing for the economy, if you want economic growth. But the fact is that there are externalities associated with every trip, and we should just target those. If it’s pollution, we need to target it. If it’s congestion….

Congestion is a huge externality, what we call open access in economics, because everyone will drive till their average benefit of being on the road is equal to their average cost. I’ll drive, and I’m putting an externality on all of you who are also on the road. But I don’t care about it, because I’m not charged it. So I think we need to do that, and that’ll also help make ride-hailing more efficient. It will also make our general transportation system more efficient.

I think congestion pricing, parking fees…. We need to address the externalities that are associated with transportation.

R. Singh: My question is about…. You talked about the flexible working conditions. I had asked this question before too. Does your research show that where Uber has come, where ride-hailing has come, it has created more precarious work conditions?

S. Gulati: I don’t know if I can target Uber or ride-hailing alone. It’s a whole new way of working now, which is like TaskRabbit, Airbnb…. Everything is being done through these apps. I mean, not everything, but a whole lot of things. I’m not sure the data is being made available for people to actually answer your question adequately.

I think there’s suspicion. When I went to Atlanta, when I go to the U.S., I like to talk to the Uber drivers. I recognize that a lot of them don’t make a lot of money. I lot of them don’t even understand that they’re not making a lot of money. Sometimes I worry if they’re making…. If they were in B.C., I’d worry if they were making their minimum wage for those trips. But I think the data is not available for us to answer that adequately.

R. Kahlon: Sorry. The leader of the Green Party is throwing me off here.

Actually, I was really intrigued by your comments around the pricing. I’m hoping you can elaborate a little bit more, because I kind of heard two things. I heard you saying that there’s value in lowering the price, but I also heard you saying that we need to increase the price, that the values are not high enough. Can you clarify that?

There’s been an interesting suggestion on common pricing for industry now — the current taxi industry and ride-sharing. Whatever thoughts you have on that would be great.

S. Gulati: I think the two reasons why prices are what they are when it comes to chauffeured trips in B.C…. One is that there’s a monopoly. We have a restricted supply, and that’s raised the price. But then, pricing is the way it is, especially when I drive, because I don’t pay for the externalities I generate. I mean, that’s true for the taxis as well. I generate externalities, like, I generate pollution. When I’m on the street, which is publicly funded, I’m not paying for access, so get into those streets not caring how someone else will be affected by my being on that street.

I think those two reasons generate the prices the way they are. I’m suggesting that it’s true we should allow the monopolies to go away, so pricing can be the way it can be through a perfectly competitive market — not necessarily perfectly competitive but as competitive as we can make it. I think we should also recognize that every transportation trip generates externalities like pollution, congestion and accidents, and we should price that appropriately. So it can lower and raise.

[12:10 p.m.]

What I was trying to say was that lowering increases economic activity, but as we increase the economic activity, we need to be cognizant of the fact that, if it’s coming from vehicle miles travelled, those have costs associated.

B. Ma (Chair): All right. I have myself, Dr. Weaver and then Mr. Johal.

My question is…. I’ve read some of your…. You’ve been outspoken in the past about labour rights and labour protections for drivers of these ride-hailing apps. Do you believe that drivers for ride-hailing apps should be protected under the Employment Standards Act?

S. Gulati: I’m not a legal expert. I think it’s a little bit complicated because these drivers are not qualified to be part of the labour force. They are contractors. They are making money as a business, in a way. So the regular labour regulations don’t apply to them, as far as I understand. But I’m not exactly sure.

I don’t know how to get around that. That’s why I think we need to also do a good evaluation to see if that’s an issue. With the way apps are changing our labour force, we might need to think about how to come up with new labour laws that allow someone who is not truly a businessman to be regulated in that.

B. Ma (Chair): Yeah. I’m thinking of…. For instance, over in the U.K., they recently ruled that Uber drivers are employees, as opposed to independent contractors. I believe that there’s actually an appeal going on, on that. So those sorts of questions have come up elsewhere. But it sounds like your response is that we simply don’t have enough data to show whether or not it is necessary to intervene on that.

S. Gulati: It’s confusing to me when I look at the literature whether…. I cannot give you a clear answer.

A. Weaver: Thanks for your presentation. I thought it was wonderful.

I just had a question to you. Have you presented to the Mobility Pricing Independent Commission? Joy MacPhail is heading up a study right now about mobility pricing in the Metro Vancouver region. I think it’s very timely. I agree with everything you say, particularly about internalizing the externalities associated with using the single passenger vehicle. So I’d just encourage you to get in touch with Joy MacPhail about this because you have a lot to offer.

J. Johal: I have a very simple question. This is in regards to data. Has there been any other jurisdiction that has had access to any of this data from these ride-sharing companies? I’m thinking of the EU, specifically. But is there any jurisdiction that has been able to get any sort of information, with a sense of labour standards, in regards to what they’re getting paid but also surge pricing and just movement around cities — any of that?

S. Gulati: As far as I know, the only jurisdiction that has strict data disclosure laws is New York. I haven’t seen those exactly, what they are, but other researchers who study this area say New York is the place where everyone is studying Uber and ride-hailing because that’s the jurisdiction requiring data to be disclosed. I think if we have a model to follow, it might be them.

S. Chandra Herbert: If you can’t answer the question, no problem. I’ll keep asking it until I find someone who can.

One of the concerns that constituents have raised with me is the question of taxation of ride-hail companies, particularly if they’re not British Columbia–based, making the claim that…. The drivers get taxed on their incomes here, but the company may be based elsewhere and not get any taxation on its operations, on its commissions, on its profit. Have you looked at that issue?

S. Gulati: No, I have not. But I can say what I would instinctively say as an economist. I think if we allow more competition in the ride-hailing app or the network corporation, that’s better. I think if we have rules around foreign corporations operating in British Columbia, those should apply to ride-hailing as they apply to other corporations. I don’t see why we should do anything separate for ride-hailing.

B. Ma (Chair): Any other questions for Mr. Gulati? Looks like not.

All right. Thank you so much for being here.

Our next expert witness is the city of Enderby.

CITY OF ENDERBY

B. Schreiner: My name is Brian Schreiner. I’m a councillor for the city of Enderby. I also have with me our CAO, Tate Bengtson. Unfortunately, our mayor is ill today. He can’t join us, so it’s just the two of us.

[12:15 p.m.]

B. Ma (Chair): All right. I am going to set the timer on 15 minutes. You’ll have 15 minutes to speak, and then we will have 15 minutes for questions. Did you send any materials in, or are we…?

T. Bengtson: We advanced some materials, but it was only earlier this morning.

B. Ma (Chair): I’m being told that it has been pushed to our iPads. So those members with iPads…. Oh, there’s no Wi-Fi. Okay. We will listen to your presentation very intently, and then we’ll take a look at the materials when they become available afterwards.

B. Schreiner: First of all, we’d like to thank the committee for the privilege of speaking with you today about this very important topic. We know that you recognize that ride-sharing is a unique and even disruptive entry on the transit market. We also know that you recognize that disruption can spawn innovation and competitiveness. This is why we’re all here today. We all want to answer the question of how this technology fits into our transportation system in a way that is safe, reliable and fair. That is the big question and one that we cannot answer in full.

What we want to do today is inject what Enderby city council feels is a vital consideration, and that would be the role and viability of free ride-sharing in small, rural, remote and First Nations communities. The city of Enderby supports regulations that will foster new solutions to old problems in small, rural, remote and First Nations communities.

We have a concern that a one-size-fits-all approach to regulations prevents small markets from using ride-sharing technology to help solve these old problems. A small market presents unique challenges in terms of supply and demand. The regulations must take this into account if ride-sharing is going to be viable outside of the major urban centres. We strongly feel that flexibility must be built into these regulations.

We’ll explain shortly what these old problems are and how ride-sharing will help us to respond with the solutions. We will then explain our vision for how the province’s regulatory regime can help small communities like Enderby turn its old challenges into new opportunities.

First, we just want to tell you a little bit more about our community, Enderby. The city of Enderby is a small, tight-knit community. We’re in the Okanagan, where the Okanagan meets the Shuswap. We have a population of about 3,000 people. It’s surrounded by a large unincorporated area and a reserve, which adds another 4,000 people to the tourist population.

Now, 20 percent of our population in the city of Enderby is over the age of 65. That’s about 10 percent higher than the provincial average. We don’t have a taxi service. We haven’t had one since 2015. By all accounts, our small market is just not viable for a taxi service.

Enderby does participate in a public transit service. We have a bus that leaves for Vernon. It’s a large urban centre, 25 minutes south of us. It goes four times per day on weekdays. There’s no Saturday service. A bus leaves for Salmon Arm, which is another larger urban community about 20 minutes north of us, and that goes two times per day but only on Wednesdays. So if an Enderby resident needs to access services to Salmon Arm at any other time than that, they must rely upon friends, family, churches, service clubs or the good graces of strangers who might pick up a hitchhiker.

Our age demographics show that the demand for medical services is only going to increase. However, with the exception of general health services and limited access to medical practitioners, all specialized services occur in other larger communities. These communities have more robust transportation options than are available in Enderby. Due to our small size and proximity to other urban centres, we have few social services and specialized medical services right here in our own community. We are within the catchment area of other larger communities, so our citizens must travel to access services that are otherwise commonly available.

[12:20 p.m.]

That is a fact of rural living, and Enderby is not alone. Our citizens generally own their own vehicles unless or until they can’t. At that point, we have a problem that rips up the fabric of our small community. Our citizens can no longer age in place. They must either relocate or go unsupported. Many choose to forgo support in favour of the quality of life that comes with living in their home community. This has real consequences for people and for our community.

When our citizens do choose to relocate, they must move to unfamiliar settings, leaving their familiar social circles and small-town lifestyle behind. For many, this starts a spiral of mental and physical health ailments that stop our health care system. In fact, the provincial government has invested considerable funds in making small communities more age-friendly for precisely this reason. Ride-sharing needs to be looked at in this context. They are profound human values which are at stake.

I just want to emphasize our point. In small communities where there is less access to services, there is the greatest need for transportation options. However, these small markets are less likely to attract alternative transportation options under an erroneous regulatory regime.

We know that ride-sharing is entirely a new form of transportation. It evolved by mixing crowdsourcing technology, which has been a long-standing part of the informal economy, which is colloquially known as borrowing a ride. Borrowing a ride is not new. One of the first recorded instances of ride-sharing in popular culture occurred in the 1934 film Bright Eyes, where five-year-old Shirley Temple hitchhiked a ride to the airport.

Obviously, times have changed, but the point remains the same. The disruptive part of ride-sharing is the technology, an app, and not the method of transportation itself — a method that has been occurring since the Model-T Ford, if not when the horse first met the buggy. The reality is that ride-sharing exists in Enderby right now. It just doesn’t have an app. It’s under-regulated. Individuals volunteer, and service groups offer service informally because the need is there. This springs from necessity. There are no other options.

Would it not be better if this fact of rural living was regulated to ensure safety and reliability, as well as improving accessibility? The reality is that erroneous regulations will only see these informal services continue in an under-regulated and unpredictable manner.

We would strongly encourage the committee to look at provincial regulations as a way to add legitimacy, safety and reliability to something that is already occurring in small-town B.C. It will continue to occur. It is to our collective benefit to make it better.

We know that demand borne of necessity cannot be eliminated, but it can be managed. We also know that supply solutions are limited, but they can be nurtured. We, as a small city of limited means, lack the tax base to provide a public sector cure. We ask you not to regulate regulations that are tantamount to a ride-sharing prohibition in small communities.

So the question begs: how can a community ensure that the ride-sharing has the best shot at small-town viabilities? Here are some of our recommendations. One, provide regulations that are flexible — perhaps a two-tiered system or an alternate opt-in system — to reflect the uniqueness of small rural and remote communities where taxi services may not exist. The demand may be lower and drivers more likely to participate on a casual basis, meaning that barriers to entry must be lower.

The second recommendation. These small community regulations should consider the following:

(a) On the assumption that service is provided more casually, require insurance similar to personal insurance, rather than commercial, or otherwise create a second threshold of insurance that increases based on anticipated hours of service per year so that casual drivers are not faced with a costly barrier to entry.

(b) As the vehicle type and average vehicle age in small communities are often different than in more urban centres, provide flexibility in the regulations or otherwise allow ride-sharing services to determine an appropriate vehicle standard.

[12:25 p.m.]

(c) Ensure that the required level of vehicle inspection is reasonably available at garages in small and remote communities and that the inspections are not cost-prohibitive to casual drivers.

(d) Ensure that background checks can be attained from either local RCMP detachments or directly through ride-sharing service providers.

(e) This is a case with public transit. Support programs to provide ride credit to residents who are most in need of access to services in communities underserved by other forms of transportation, as this has proven to be more cost-effective and offers an improved service level versus small-town public transit.

Now, as we have mentioned at the start of our presentation, ride-sharing is disruptive technology that can be the catalyst for new solutions to old problems. The old problem is that of transportation in rural and remote communities where transit service is limited. We think that all of us in or near to government would agree that new solutions is an exciting, market-driven, private sector solution to a public sector challenge. Now, how rare is that?

We conclude our presentation with the following. If there is a private sector initiative that improves social levels to our most vulnerable citizens living in small, remote and First Nations communities and if this same private sector can crowdsource a solution that is more efficient and effective than the public sector and if we accept these conditions as true, it only makes sense that we, as government, should focus on creating a flexible regulatory environment that enables all communities in B.C., regardless of size or location, to benefit from ride-sharing in a way that is equitable.

I would just like to thank the committee for your time today and the opportunity, I guess, to answer any questions.

B. Ma (Chair): Thank you so much for that. That gives us the remaining time, plus 15 minutes for questions. First up is Mr. Kahlon.

R. Kahlon: I think your perspective, especially from a smaller town, is important for this committee to hear, and I want to thank you for finding the time to come and share that with us.

Most ride-sharing companies usually go into areas where there are higher populations — it’s easier to make money, and so on — and smaller communities usually get a little bit left behind. With your proposal, are you aware of any ride-hailing or ride-sharing service that is available in small towns in other jurisdictions?

T. Bengtson: We are aware that Lyft, for instance, has recently gone out into a number of rural states, including all the rural areas in those states, and seems to be making a lot of progress in that respect. We’re optimistic we might do something similar from either Lyft or a made-in-B.C. solution.

B. Ma (Chair): Are there any other questions?

S. Chandra Herbert: I just wanted to ask: are there any holdups on the question of car-pooling or the other side, maybe not financial but other means that your community would see useful as well — not just a private sector company but more cooperative solutions that the provincial government could help support to create as well?

B. Schreiner: That’s a great point and, certainly, another component to it that is worth exploring. We do have a variety of [audio interrupted].

S. Chandra Herbert: We’ll come back to that one.

B. Ma (Chair): I just have myself on the speakers list. Are there any other committee members with any other…? I believe this might be our only presentation from a small community.

S. Chandra Herbert: They’re coming back.

B. Ma (Chair): Hello, are you there?

B. Schreiner: Yes, we’re here.

B. Ma (Chair): Oh, excellent. Let’s try that again, because we lost you. You were just about to answer Mr. Chandra Herbert’s question.

[12:30 p.m.]

B. Schreiner: Yes, thank you. That was a great question that spoke, I think, to a lot of the other ways people are getting around in town. Ways like car pooling are very useful, particularly for people if they have fixed times and places that they need to be. But we do feel that ride-sharing would respond to another set where there needs to be more flexibility in terms of people being able to provide such a service.

B. Ma (Chair): I have a question for….

Did you have a follow-up?

S. Chandra Herbert: It was just another question to that. Are you hearing similar concerns from other small municipalities across B.C.? Are there other communities that have come to you and seen Enderby as a bit of a leader on this file that they’re hoping to…?

B. Schreiner: Yes. We actually did a presentation of our resolutions at UBCM this past fall.

S. Chandra Herbert: Right. Okay. I thought it sounded familiar. Thank you.

B. Ma (Chair): Wonderful. My question is about regulation and which jurisdiction should be responsible for what, given your perspective as a small community.

For instance, what we heard earlier today was that in municipalities like Vancouver, the municipality will actually be responsible for dictating whether or not taxi drivers, as an example of a ride-hailing type of service, go through certain types of training, for instance. I heard that licences are also municipally driven, if I have that correct. So there are, in the Metro Vancouver region, in the capital region district…. Did I say that backwards?

The municipalities do play a substantial regulatory role. What sort of role do you think is appropriate for a town like Enderby to take on?

T. Bengtson: That’s a great question. Within smaller communities like Enderby, we tend to be less involved in terms of regulating other forms of transit, including taxis, simply because we’re in a case, often, of “beggars can’t be choosers,” and we need to take almost anything. So in terms of the role of many of these small communities, often it will be determined more by the need of our constituents. That will often determine what kind of regulatory expectations we have at the local government level.

If you look at it more broadly, I view it almost, with small communities, as an opportunity for a partnership between the province and local government, in terms of if we approach a two-tier regulation that could be opted into. One good example out there would be the bylaw notice of enforcement regulation, which is an alternative to municipal tickets. Under that one, how it works is that you need to be added in by regulation, subject to adopting a model bylaw. That would be maybe the balance we could look for here to ensure that we’re balancing fairness in larger urban centres over and against the need to attract in smaller communities like Enderby.

B. Ma (Chair): Are there certain regulatory requirements that you would insist that the province take on, as opposed to allowing the municipalities to…?

T. Bengtson: That’s probably a little bit beyond the scope of what we’re capable of answering right now, except that we welcome the opportunity to have that conversation further.

S. Cadieux (Deputy Chair): One of the challenges I’m wondering about with the size of the opportunity or the likely uptake of the opportunity of an app-based ride-hail, ride-share — whatever we ultimately land on in terms of the terminology — in smaller communities outside of the major urban centres is the reliability of cellular and Internet service.

How realistic is it to expect that outside of the Lower Mainland or outside of the larger urban centres around British Columbia, or that folks who go one way to a location that may be further out from town…? How likely is it that service levels are adequate to support a service that is based solely by hailing via an app?

T. Bengtson: That’s a great question. Certainly, much of the province now does have that connectivity, although there are still a lot of areas that don’t. Within Enderby, for cell, for instance, we have excellent cell phone and Internet availability, and many areas of the province, including the rural areas, are now seeing fibre extended as well.

[12:35 p.m.]

We see these as things that are really helping to level the playing field on that front, although we recognize that it’s a work in progress. And we think that even though there may not be 100 percent availability, it can still help with many small communities and more as connectivity is extended.

A. Weaver: I just wanted to thank you for bringing this. It’s a really important addition to our people presenting to the committee. I think you’ve nailed an exciting opportunity for innovation in B.C. You’ve identified a market. You’re not alone. We have rural communities across British Columbia, and I’m convinced that a B.C.-based company would rise to the challenge.

Let me see if I’ve got this. If I take a take-home message from your presentation, you’re looking marginally for…. I mean, you have an aging demographic, and that aging demographic is looking, perhaps, for some ability to access, not exclusively, rides to, say, Vernon or some nearby town where they can get medical service or whatever, and you’re looking for a regulatory regime to exist that’s not as onerous as perhaps a regulatory regime might be in Metro Vancouver or Victoria region. Is that sort of summarizing it?

B. Schreiner: Exactly, Dr. Weaver. That’s exactly what we’re trying to emphasize today.

B. Ma (Chair): Would the gentlemen on the phone please remind us of which voice is whose, just for our Hansard?

B. Schreiner: The gentleman that has been answering most of the questions is our CAO, Tate Bengtson.

B. Ma (Chair): And you’re Mr. Schreiner. All right. Fantastic.

P. Milobar: As the only member on this committee that’s not from the CRD or Metro, I’m going to pick your brain here for what you’re talking about when it comes to…. Just so we get it on the record.

A. Weaver: You have thrown, under the bus there, Pemberton.

P. Milobar: Well, in the Interior, we still consider you Metro. You’re only 45 minutes away. So I forgot. Yeah, that’s right. Mr. Sturdy is Pemberton. I keep thinking you’re more Whistler.

Just on behalf of Mr. Sturdy and myself, then, just to get a better sense on the record of what you’re talking about…. Of a potential two-tier system, as it relates to size of community, do you have any thoughts?

I’m willing to bet that most people in Enderby would consider myself, from Kamloops, from a big centre, and people in Metro think I’m from a small city. Everyone has a different view of what they consider to be a large urban centre. What are you talking about, if we were to try to come up with some sort of two-tier? Is it the number of cabs within a community that would be the trigger? Is it the size of community, based on population? Have you given any thought to how we would define what large or small community where these tiers would potentially come into effect?

T. Bengtson: Thank you for your question. Just for the record here, I work in Enderby, which is a community of 3,000, but I grew up in Lumby, which is a village of 1,800. So this is a metropolis for me.

Kidding aside, I guess how we’d look at it is that we recognize there’s more to do to figure out what the right level or threshold is to trigger eligibility to a two-tiered system. That would be somewhere we’d want to see some conversation with other established firms, such as taxicabs, happening.

Obviously, a key trigger here would be if there was an absence of cab service in the community. That would be an obvious point where it would make a lot of sense to start having a conversation about ensuring, for ride-hails that are originating from within the community, that another system might be appropriate in order to help facilitate that — meaning that there’s obviously not sufficient demand to generate that kind of supply, within the market itself, for a taxicab.

J. Johal: I just have a quick question in regards to what’s happening in Ontario. I think, earlier this year, there was a community there that dealt directly with Uber. They couldn’t, or didn’t want, to pay, I think, $250,000 a year for a transit bus, because it wouldn’t be used that much. But they’re setting aside $100,000 towards Uber, I think it was, in that particular case.

Have you had any conversations with Lyft, Uber or any other ride-hailing company in regard to perhaps subsidizing some of those rides for your residents so that you could have, perhaps, a flexible transportation system? I’m just curious if you’ve had any sort of conversation with them.

[12:40 p.m.]

T. Bengtson: That’s a great question. We have had a preliminary discussion with Lyft around what level they’ve seen work in some their other small communities they’re servicing in the United States right now. They have reported that there are a lot of cases down there where ride credits are essentially provided by local governments. Those credits are used in lieu of these other forms of public transportation that could be quite expensive and often not provide a more customized service level. That is something, I think, that we are certainly looking at.

Prior to exploring this model, we’ve been exploring very consistently how we can improve our public transit systems or buses. There simply is no feasible way, given our tax base, to make that occur in a way that’s meaningful for our population.

J. Johal: Thank you.

B. Ma (Chair): Any other questions for the gentlemen from Enderby? Looks like our list is exhausted.

Thank you so much for taking the time to call in today.

B. Schreiner: Thank you so much for inviting us. It’s really awesome. We look forward to the progress on this important topic.

B. Ma (Chair): Have a wonderful day.

We’re running a few minutes behind, so we’re going to try to catch up this afternoon. The committee will be taking a recess now, and we will reconvene at 1:30 this afternoon.

The committee recessed from 12:41 p.m. to 1:34 p.m.

[B. Ma in the chair.]

B. Ma (Chair): The committee is reconvened for the afternoon session.

[1:35 p.m.]

Our next presentation is from Mr. Val Litwin from the B.C. Chamber of Commerce. Like previous presentations, I’m going to set up a 15-minute timer for you, and then afterwards, whatever time is left over plus 15 minutes for Q and A.

V. Litwin: Is it accompanied with a buzzer as well, for dramatic effect?

B. Ma (Chair): Well, you know what? It might have a little tune. I’m not sure which one I set it up to, but there’s a little, gentle tune to lull you to sleep. Go ahead.

B.C. CHAMBER OF COMMERCE

V. Litwin: Well, the clock is ticking, so thank you to the Standing Committee on Crown Corporations for allowing the B.C. Chamber of Commerce to offer a presentation today. I am Val Litwin, the president and CEO of the B.C. chamber. I imagine you’ve had a lot of testimonies already. I will be reading my testimony. I’ll do my best to inflect and bring my best dramatic stage voice to make it interesting, but I will be reading from my testimony today.

The B.C. chamber is B.C.’s biggest and broadest business network, with 120 chambers and boards of trade at the regional level representing over 36,000 businesses of every size from every sector of the B.C. economy.

British Columbians are looking for more transportation options and ways to increase the affordability of living throughout the province. What our members are telling us is that B.C. needs to introduce a provincewide ride-sharing legislative and regulatory framework and remove red tape on our taxi industry to improve transportation affordability and flexibility.

What the B.C. chamber refers to as ride-sharing — the ability of an average driver like any member of the committee or myself who has been through appropriate safety screening to use their personal vehicle to connect with a rider via a smartphone application — is a key part of the emerging sharing economy.

Ride-sharing is currently available, as I’m sure you know, in hundreds of jurisdictions around the world, including Edmonton, Toronto, Ottawa, Hamilton, Calgary and the province of Quebec, right here in Canada. This is providing new transportation options and flexible income opportunities for those wanting to drive.

The sharing economy is providing new economic and business opportunities for individuals to increase the utilization of their assets by connecting with new, potential customers via technology, whether it’s supporting a thriving tourism economy in Vancouver or Victoria or providing additional transportation service in rural communities that see declining Greyhound options. Ride-sharing is needed in this 21st-century economy.

Ride-sharing has shown tremendous opportunity to grow the number of rides in a city, decrease impaired driving, complement existing public transit, reduce car ownership and encourage passengers to share rides and reduce congestion. It’s important to note that ride-sharing and traditional transportation models can complement each other to better serve British Columbians, just as they do in communities across Canada and around the world.

Rather than competing with taxi companies, ride-sharing services like Uber and Lyft can grow the overall transportation industry. As just a quick side example, according to the Portland regulator, the total number of taxi and ride-sharing trips in the city grew by more than 40 percent in the first three months after Uber and Lyft’s arrival.

Now, let me just walk you through a few key elements we feel are what are needed to make ride-sharing a reality here in B.C. Ride-sharing regulations should be distinct from existing transportation modes — such as limousines, taxis and car-pooling — because, while it has similarities with each mode, ride-sharing is fundamentally different.

Some key components of an appropriate regulatory regime should include: ride-sharing companies must obtain a provincial licence and pay all necessary fees; ride-sharing drivers must have a valid class 5 driver’s licence issued by the province; to be allowed on the platform, ride-sharing drivers must pass a criminal background check for relevant convictions, pass a vehicle inspection by a certified mechanic, have valid insurance that meets the requirements established by the province and have a safe driving record.

Ride-sharing drivers can only provide service through the use of an app, and the app must provide the customer with the name and photo of the driver, make and model of the vehicle and licence plate number prior to the trip commencing. This means that no ride is anonymous and provides assurance to the passenger that the driver has been authorized to be on the digital platform.

The app must provide GPS tracking. Passengers must be provided the fare rate in the app and have the ability to estimate the cost of their fare. The passenger must have the ability to provide feedback for each ride to help ensure high quality and safe service. Ride-sharing drivers would not be permitted to accept street hails, leaving this market to the exclusive domain of taxi companies. Finally, cities should be restricted from applying business licences or other requirements that would create additional barriers beyond the provincial requirements.

You all have the presentation in front of you, so I’ll just go through some of our key points here. Regarding the licence class, any driver with a safe driving record should be able to utilize a class 5 licence to drive a taxi or a ride-share vehicle.

[1:40 p.m.]

Currently taxi drivers are required to hold a special class 4 driver’s licence, even though they are driving standard passenger vehicles like Toyota Priuses or Dodge Grand Caravans. A class 4 licence requires a one-time written test and driver’s test and an occasional medical check. It represents an unnecessary additional cost in red tape for drivers without a material increase in safety. Safety is often used as a reason why a class 4 licence is required. However, a one-time written test and driver’s test only captures a snapshot in time. It doesn’t provide materially different knowledge for driving the same vehicle she is already permitted to drive.

With regards to medical checks, B.C. has a mandatory reporting framework whereby doctors are compelled to inform RoadSafetyBC when a driver has a medical condition that could impact his or her driving. Appropriate requirements or restrictions are then placed on the physical licence. Mississauga was the only major Ontario city that required mandatory medical checks for drivers. However, after a safety review, the city decided to remove that requirement for taxi drivers as there was no safety benefit to be found.

The solution. To maintain the high levels of safety, the province should require drivers to have a full class 5 licence and a safe-driving record check. A driver’s safety record is a much stronger determinant of future driving behaviour. Medical restrictions on the class 5 driver’s licence must be adhered to for ride-sharing or taxi.

As a side note, there will be more opportunities for rural British Columbians, as I noted in the beginning, who have less access to government services and other mobility options, such as we discussed, like Greyhound in some of the rural communities around B.C. So it does open up more options there.

Regarding taxi zones of operation, taxis are and should be the only personal transportation mode permitted to accept street hails. As such, there is a public good to establishing set zones of operation to ensure access throughout populated regions. Ride-sharing does not operate in the same manner and should not have set zones of operation.

Currently the Passenger Transportation Board authorizes the area of operation for a taxi. In addition, municipalities have separate and concurrent authority over the number of taxi licences issued in their jurisdictions. This has led to a system where a taxi from Surrey dropping off a passenger in Vancouver must return to Surrey empty, increasing congestion, pollution and customer and driver frustration. This situation can be avoided through technology.

The solution. In the future, only one order of government should have the authority to determine the supply of taxis permitted to operate. The responsibility should default to the province, but if a city has the capacity and chooses to take that overall responsibility, it could be permitted.

Taxis should be required to operate in their home area to service local demand. However, if a taxi drops off a fare outside of its home area, it should be permitted to pick up a fare if the destination is its home area and it starts within 30 minutes — or a predetermined appropriate time — after the original drop-off.

Only taxi companies who have invested in GPS technology that tracks origin, destination, fares and time would be authorized to engage in this activity. Moreover, there would be severe penalties for drivers who disregard the rules. Periodic audits of travel logs would also provide accountability. The province would have the authority to authorize or restrict this activity, and cities would be unable to block it.

Regarding insurance, British Columbia has high insurance rates, and it is a significant business cost for transportation. Oddly, there is no difference in the insurance rate for temporary operating permits — taxis that are only permitted to operate on weekends — compared to those which are permitted to operate all week long.

New technology, namely telematics, is enabling insurance companies to lower rates for safe drivers. New South Wales, as an example, has implemented a swath of reforms, including a reduction in annual premiums for taxi owners by up to 40 percent and allowing taxis to use telematics to more accurately price insurance premiums.

In other Canadian and international jurisdictions, regulations have been updated to allow ride-sharing companies to purchase blanket coverage while ride-share drivers who use their personal vehicles are connected to its digital network. Pricing is determined on a per-trip or per-kilometre basis commensurate with the determined price of the ride-sharing risk of a ride-sharing company’s associated driver partners.

The solution. Empower ICBC to reduce rates for safe taxi drivers by using telematics to help price the insurance, allow taxi owners to only pay pro-rated insurance coverage for vehicles that are only permitted by the Passenger Transportation Board to be operated during select times during the week and allow ride-sharing companies to purchase or top-up a driver’s basic Autoplan coverage based on per-kilometre or per-trip usage, while ride-share drivers are connected to its digital network.

Regarding vehicle inspections, a vehicle inspection regime should be in place, but it’s important to utilize common sense. The vast majority of vehicle accidents are not due to mechanical defects. Comprehensive data for the cause of light-vehicle accidents is not available in Canada, unfortunately. However, the United States National Highway Traffic Safety Administration did an analysis that found only 6.9 percent of light-vehicle accidents were due to “adverse vehicle conditions”. Of those incidents, 72 percent were related to tire condition.

[1:45 p.m.]

The current vehicle inspection regime in B.C. requires taxi owners to comply with the national safety code. This national code is only legally enforced in B.C. and should be reconsidered. It requires all commercial light vehicles, taxis, to undergo the same stringent inspection regime every six months. This does not make sense as the risk across the province in my industry varies greatly. For example, a taxi in Vancouver that drives 100,000 kilometres a year is given the same scrutiny as a taxi in a smaller community that drives less than 30,000 kilometres a year.

Moreover, these inspections can only be performed by provincially certified garages. Rural communities may not have a registered facility, forcing transportation providers to travel to other communities to complete the inspection, which leads to more congestion and pollution.

The solution. The province should institute a standard inspection regime for taxis and ride-sharing based upon usage. Drivers would not be required to get an inspection for vehicles that travel less than 30,000 kilometres. This is similar to how personal cars are currently on the road but does not require an inspection. Vehicles that travel between 30,000 and 60,000 a year would be required to undergo a streamlined inspection that focused only on the most likely problem areas, such as tires, brakes and lighting. Vehicles that travel over 60,000 a year would be required to undergo the current taxi inspection every six months, and all inspections could be performed by any certified auto mechanic service technician.

Regarding driver quality…. I’m almost at the finish line here. Driver safety is important, of course. The province should establish a provincial safety framework for driver history and criminal conviction background checks, which cities cannot amend, to hamper barriers to cross-municipal travel.

Ride-sharing vehicles should be banned from accepting street hails. Companies should be forced to have GPS tracking and transmit the driver and vehicle information to the passenger in advance of the trip occurring.

The government should be cautious about mandating customer service, however, and quality provisions for ride-sharing companies. In an open system where companies are able to enter and exit competition and choice, this will lead to a better consumer outcome than restrictive government requirements.

Customer service and the ability to attract business is the responsibility of the driver and the ride-sharing company. Ride-sharing companies can keep a focus on customer service through their rating systems and a 24-7 customer service approach. Independent studies by the city of Ottawa and city of Calgary have found consumers prefer ride-sharing for higher levels of safety and customer service, despite a lack of regulatory requirements prescribing training.

The insurance consultancy Aite Group found that ride-sharing drivers were safer than average American drivers. Moreover, Chicago has released data that introduction of ride-sharing companies also encouraged traditional transportation providers to improve customer service, as reflected in a decrease in rider-taxi complaints to the regulator. When consumers have more choice, they are typically served better.

In conclusion, our members are excited about the opportunity for British Columbia to institute smart regulation for private transportation, and these regulations should respect different business models and work well across all areas of the province. Our recommendations, we think, do just that.

B. Ma (Chair): All right. Wonderful. Thank you so much.

Our first question comes from Dr. Weaver.

A. Weaver: Thanks. That was very comprehensive and, I must say, compelling. Much of what you said…. As you know, I’ve put in a private member’s bill three times before. Much of that was embodied in exactly what you were saying about the importance of a regulatory regime.

One of the things that you didn’t mention. I’m wondering if you gave some thought to this. In speaking with local taxi drivers in Victoria, one of the things that concerns them is that there has been a requirement — it’s probably the same here — for rather expensive cameras to be installed in their cars for security reasons. That came at the request of police and their city there.

Have you considered that as also being a requirement? It is something that is required, at least in Victoria. I believe in Vancouver…. Do you require it here in Vancouver as well? But you don’t in other places — the safety security cameras.

V. Litwin: While our presentation was comprehensive, it obviously doesn’t envision the full extent and the detail that a full regulatory regime might encompass. We actually haven’t discussed that. I think we’d be open to it, but right now, our position…. Because we are a grassroots organization, we sort of lever from the policy that comes up from the grass roots. We haven’t considered that, but we’d be open to it.

R. Kahlon: Thank you for that. A couple of things, I guess, jumped out at me.

One was the idea of reducing rates. Everybody wants their rates reduced. I don’t know if you read the headlines, but we’re $1 billion in the hole. I appreciate that would be a nice solution — to just start reducing rates. I just know there are some challenges there.

Two main things I have questions on. One is that I know the chamber is quite active on what happens with congestion and economic activity due to congestion and the challenges that many businesses face because of that.

[1:50 p.m.]

Have you thought about, with the increased amount of cars on the roads, especially in the downtown core, what that might mean for many of the members that you represent? Have you thought about how you think that might be able to be managed? That’s my first question.

The second is that you are the first person to say that we shouldn’t follow the national code as far as safety goes for cars — car inspections, and so on. I read in your summary here…. You talk about how well we do in B.C. in not having accidents. Well, we do have strict rules around protecting the public with cars and safety and so on. Perhaps there’s a correlation between the two. I was hoping that you could maybe explain a little bit more on that, since I think it’s fair to say that most members of this group want to ensure that safety is at the forefront. So those two questions.

V. Litwin: Absolutely. Maybe I’ll start with the second one first.

Regarding safety, nothing could be more important. I think the distinction we’re trying to make here is that it’s more about the safe driving record of the individual behind the wheel as it is the mechanical defects or the opportunity for the car to have an accident due to a mechanical defect. The emphasis we’re putting on here, in terms of streamlining legislation, is: let’s make sure we’ve got a really tight regime and a robust process around ensuring that we’ve got great drivers with great driving records. Let’s turn to the science and see what that says about defects in cars.

Like I said, I think about 6.2 percent of accidents happen due to a material defect in the car, which speaks to safety. And 72 percent — again, it’s in the report — are due to issues just with the tire. So let’s let data drive the way to approach the safety regime.

Regarding congestion, your first question I think is a very fair comment. If we thought we were up here today advocating for ride-sharing and that it would lead to more congestion, I would retract my submission immediately. What we see from some of the data in jurisdictions like Portland, Oregon, is that riders and drivers are making the choice to go into more ride-sharing options or use more taxis. They saw that 40 percent lift.

It’s not like the population of Portland changed or increased by 40 percent overnight, and therefore the market increased by 40 percent. There was a migration from people using their own cars to ride-sharing options and taxis.

R. Kahlon: Just a follow-up. We’ve heard from experts this morning — various professors, and so on — who say, actually, at least for the early days, that they’ve seen the result that there actually isn’t a decrease in the amount of cars on the road. In fact, they’ve seen people moving away from public transit, as well, and moving towards this. I appreciate that every jurisdiction will have different data, but I just want to make sure you were aware that we have heard from experts that say that as well.

V. Litwin: Am I allowed just one follow-up comment? I think when you’re talking about a new industry, a new sector that hasn’t existed before, and all of a sudden it appears, and now it’s an option for consumers, we would find correlations between people moving to that new sector to experiment and try it for the first time. So it wouldn’t surprise me that, in the introduction of a new industry, in the beginning, you would have a rush of cars and users initially. What I suspect will be interesting is to see now what the long-term data says for those communities over the medium and long term.

S. Chandra Herbert: Just to follow up on that question, on congestion in particular. Sorry to get focused on it, but I live in a neighbourhood which is very congested.

I think New York and San Francisco, which was an early adopter, both have said that they’re actually increasing congestion. So it’s not, in San Francisco, the case of it being a new community but actually people changing their ride habits — instead of taking the subway, shifting to ride-sharing with a friend. It’s slightly more expensive, but they like it. It’s a bit more convenient, they think, until it becomes so congested that it’s not convenient anymore.

If you could share the information you have from Portland, I’d love to see it. I’d just be interested, because I think if we’re moving in this direction, we have be aware of congestion and not make it worse, because it’s already really choking the economy and making people’s lives not so pleasant.

The question I had was…. In your submission, you talk about driver quality, suggesting by mandating customer service and quality provisions for ride-sharing companies — that we should be cautious about doing that. When I talk to folks in the tourism industry, many of them will say they’re quite happy that we have a TaxiHost program. Taxi drivers have to get trained up on local geography, working with people from different cultures, working with people with different disabilities — how to do that effectively and respectfully. People are actually quite proud of the taxi system in terms of how it relates to tourism.

[1:55 p.m.]

I’m just curious why the chamber would be advocating, if I understand this correctly, that ride-hailing companies should not require their drivers to have training to deal in the same way with disability, local tourism issues or other things. It would seem to me to be a step backwards.

V. Litwin: That’s a fair question. I don’t think we’re advocating that they shouldn’t take training. We’re suggesting that government shouldn’t mandate that they do.

Before I was working with B.C. Chamber of Commerce, I was the CEO of the Whistler Chamber of Commerce, a town that lives and breathes by the quality of its customer service. As the chamber up there, we invested hundreds of thousands of dollars into community-wide training. We trained about 6,000 people a year. I can absolutely appreciate the competitive edge and the opportunity to create an amazing experience when our tourists come here, whether it’s to hop in a ride-sharing vehicle or visit a community like Whistler.

What we would suggest, though, as a business organization, is the free market should determine who survives because they’ve actually made a discipline out of understanding the positive ramifications of investing in customer service. So instead of mandating it, I would suggest one of the ways the market will ensure that the best people stay on the road is they’re out there delivering the best service possible.

It’s a bit of a free market approach, and it’s also not to suggest that we shouldn’t always pursue to deliver great customer service.

S. Chandra Herbert: Thank you for that. If I can just follow up. The question of, say, somebody with a disability…. It has come up, the question of accessible taxis, accessible ride-share. Does the chamber have any position around — should we allow ride-sharing into B.C., ride-hailing into B.C. — requiring a set number of accessible vehicles?

Letting the free market decide, if you’re somebody stranded on the side of the road, is not exactly a good solution. I think we actually do need to be involved as a government to ensure that folks that are often marginalized by society have their interests represented as well.

V. Litwin: Actually, that’s a terrific distinction. So I think maybe I can nuance my response that I just gave you. I would also look at that as actually good operational training, not necessarily customer service training. I think there’s a baseline understanding that people should have when they’re in that industry. So I probably conflated the two. I might actually make a distinction.

I think it’s a conversation we should have, around how to serve folks with disabilities. It’s just one example of a sector that might have a different sort of need with that service.

B. Ma (Chair): I do want to echo, again, the concerns I have around increased congestion. We do have a number of transportation engineering experts who will be presenting to the committee over the next couple of days, and this topic will likely come up again.

I, of course, represent a riding on the North Shore, and we’re already being suffocated by congestion, and it’s having an extremely negative impact on our local businesses, our services and quality of life for residents. So, absolutely, that’s something that I’m also concerned about.

My question for you, however, is…. You had mentioned earlier that you believe that ride-hailing services are fundamentally different from other…. So ride-hailing right now…. We have ride-hailing services that are called taxis. Through this new app technology, we also have what we are referring to as ride-hailing services. You’ve mentioned that you believe that they are fundamentally different and require different regulatory regimes.

I’m wondering whether you can elaborate on why you believe that those services are so different. In particular, you had also mentioned that the free market will basically decide what companies succeed and which companies fail, but I’m not sure how the free market comes into play when we’re actually applying two different regulatory regimes to those companies. Can you elaborate on that, please?

V. Litwin: In a way, your question gets to the core of the whole presentation I just gave, which I won’t repeat, even in summary.

What might be helpful…. On page 3 of the submission, you’ll see that brief matrix we built to categorize and define the different modes — from ride-sharing, car-pooling, taxi and limos. So I might refer to that for how we define that they’re different models.

I think, given the time that we have here, that would be the best sort of response I could give you, because when I get into how I think they’re fundamentally different, we get back into every aspect of the presentation again. So enumerated here, we have: from payment to supply, personal vehicles, the ordering of the trip, frequency of driving. Those are sort of the parameters we see that are vastly different.

[2:00 p.m.]

B. Ma (Chair): I understand that some companies are offering different, I guess, options in terms of being able to estimate the amount of fare for your trip, and so forth. But the actual fundamental service is driving somebody from point A to point B, and that’s the service that, I think, we’re talking about right now.

The remainder of these distinctions that you’re providing here seem more to be a function of what technology and the app provides but the app itself isn’t actually what’s being regulated. It’s the delivery of the service. That’s, I guess, where my question came from. If you wanted to leave it at that, I’ll just go to Mr. Johal’s question.

J. Johal: I just have one question, really, in regards to complaints that you’ve heard in the past about surge pricing. New Year’s Eve, Christmas party season, rush hour — there have been complaints about ride-sharing companies charging more in those hours.

Do you think we should be regulating those rates, if they were to come in?

V. Litwin: I mean, that’s not within the scope of our submission. Having said that, I think we would certainly be advocates for a system and a regulatory framework that protects consumers from being, for lack of a better phrase, scalped in those situations where they’re being exploited during peak hours.

I’m not a technology expert. I’m not an expert on the app itself. But we’ve heard complaints. We’ve heard stories, and I don’t think that’s the right way to go.

S. Chandra Herbert: One of the solutions proposed is by changing the licensing requirements to a class 5 from a class 4. The argument for it was that it would allow taxi companies in rural B.C. greater access to inspection facilities.

Is that an issue that members have raised? I just did a quick look on what number of inspection facilities we have in B.C., and there’s about 187 pages of them. Now, they may not all meet all the needs. I’m just curious where that suggestion came from.

V. Litwin: I couldn’t tell you of a specific community where that came up as a concern. What we do hear in rural British Columbia is there are services, government and otherwise, that are often inaccessible in particular regions. I was just up in Fort Nelson. They don’t actually have 911 service on the road between Fort Nelson and other communities. This is more just a heads-up consideration as we roll out the legislation.

A. Weaver: I wanted to follow up on that because it’s something that I had heard repeatedly too. My understanding — correct me if I’m wrong — is that class 4 is basically class 5 with a written test and a little bit of a medical. It seems like a hurdle that the taxi drivers are being put through that is not really making a difference in terms of safety.

Would that be a correct interpretation, do you think?

V. Litwin: Indeed. That’s what we’re saying in the submission here. Ride-sharing drivers and taxi drivers should all just have a class 5 licence.

B. Ma (Chair): Wonderful. Thank you so much for coming out — really appreciate you taking the time to present to the committee.

Our next presenter is Uber Canada. We will start that presentation at 2:05. It’s currently 2:03. You’ve got a couple of minutes to set up.

[2:05 p.m.]

We’re going to move forward with our next and final presentation for today — Uber Canada. Mr. van Hemmen, I am setting you on a 15-minute timer. Of course, afterwards there’s another 15 minutes for Q and A. I’m sure you’re familiar with the process by now.

UBER

M. van Hemmen: Just so I can help stick to time, I’ll be reading most of my presentation. Then I’ll be a bit more engaging and dynamic, hopefully, as we get to Q and A.

Yes, my name is Michael van Hemmen, and I am Uber’s local public policy manager, based here in Vancouver. It’s a pleasure to be with you. I plan to quickly take you through the transportation opportunity, the benefits of ride-sharing and ride-sharing regulation best practices.

To start, it’s easy to demonize the car. There are over 1.3 billion in the world today, but the problem is not so much cars in themselves; it’s how we use them individually. In Metro Vancouver, 93 percent of commuters who drive, drive alone. Of course, all this individual car use comes at considerable public cost. In Los Angeles and Vancouver, people lose two whole working weeks each year stuck in traffic. It’s even worse in Mexico City, at five weeks per commuter. That’s a whole lot of stress that no one needs.

What’s more, congestion increases pollution, and today 22 percent of carbon dioxide emissions globally comes from transportation. Sadly, that’s just 5 percent of the problem, because cars sit idle 95 percent of the time. As a result, up to a fifth of the land in some cities is used to store cars. There’s a tremendous opportunity cost to parking, though it’s something we often don’t count. It’s space that could otherwise be used for bike lanes, parks and more affordable housing. This is the challenge of the way we design cities today.

Too many people have no choice but to go with the car ownership route. Even in a city with great public transit, like New York, the subway doesn’t get to everyone’s front door. In fact, 2.7 million cars drive into Manhattan every day, because as great as the public transit is, it doesn’t work for every trip. And once families have bought a car or bought cars, they’re more likely to use them.

What is ride-sharing, and how can it help address congestion, pollution and the need for parking? First, ride-sharing is the ability of a driver to use a personal vehicle to provide rides for a profit, matched through a smartphone app. There are no limits on the number of people who can earn money driving, and prices are low and flexible.

Recent Uber drivers of mine include Bethia, a dance teacher; Allan, a logging truck driver; and Navdip, a construction worker. Drivers have the ability to drive when, where and for how long they want, with the majority driving less than ten hours a week, in a week that they choose to drive.

The use of mobile technology allows the driver to accept a trip request from the rider, encouraging efficiency. Riders get many benefits, including seeing the price of the trip in advance so that there are no surprises.

Through new technology, we’ve also been able to expand the safety systems in place. From solely relying upon historical background checks and one-time or infrequent tests, it’s now utilizing technology to enhance rider and driver safety through new features, including real-time GPS tracking, upfront disclosure of who your driver is and what car she is driving, the ability to contact that driver via a scrambled phone number, the ability to share your estimated time of arrival and real-time location with a friend or family member and real-time customer feedback with 24-7 customer support systems.

We’ve also been able to take the technology a step further by utilizing the telematics data available from a smartphone to enhance safety feedback loops. The end result is that regulators across Canada and North America have confirmed that relying on Uber’s safety systems has provided enhanced safety and service outcomes for the general public.

Due to these innovations, for riders and drivers, ride-sharing and Uber have become a part of everyday life around the globe and across Canada. Here in Canada, more than 2.3 million people have taken an Uber trip in the past three months, and since 2015, over half a million residents and tourists have downloaded or opened the app here in British Columbia.

Why are we seeing people adopt ride-sharing as a transportation mode instead of driving their own car? It’s because it’s reliable and affordable. Let’s start with reliability. This time-lapse map of trip request growth in Toronto highlights how Uber is able to reliably provide service from downtown to agrarian hamlets further away from downtown Toronto than Abbotsford is to downtown Vancouver. Push a button and a ride is likely no more than five minutes away, because there are no limits on the number of people that can earn money from driving, and price can incentivize drivers to serve peak periods of demand at any time of day.

This flexible supply and price enables Uber to reliably serve its busiest hours. Our rush hour, as shown on the chart on the right, is typically later at night when bars close. That’s when public transit is limited and alternatives are hard to find. It’s definitely when a lot of people should not be behind the wheel, and it’s why Mothers Against Drunk Driving Canada has partnered with Uber to help fight impaired driving.

[2:10 p.m.]

Ride-sharing is not going to be a pure substitute for personal automobiles on its own. Rather, it will only be one of several transportation options, including public transit, that people can readily use to help reduce their reliance on single-occupancy vehicles.

The American Public Transportation Association did a study and found that ride-sharing through Uber is complementary to transit, due to our ability to serve these off-peak transit times, first- and last-mile solutions to transit hubs, our ability to better serve less dense areas in a cost-effective manner and also to assist with paratransit. That’s why Uber has been able to form transit partnerships around the world. These partnerships have enabled municipalities as diverse as the Tampa Bay region and the city of Boston to improve access to their transportation systems and find significant savings.

Partnerships are even working in smaller rural communities. Last year Innisville, Ontario, approached Uber about a transportation partnership. The town is relatively small and spread out, and it had no business case for a bus system to get to the regional train station. A pilot project was launched with Uber connecting their community to the regional rail and offering affordable service throughout the community. To date, the pilot has been a great success, providing more rides at a lower cost than the town’s forecast.

Beyond extending the reach of transit, people will only give up their personal vehicle if they have an affordable alternative to individual ownership for point-to-point trips where transit may not make sense. Ride-sharing is already generally an affordable means of transportation, but we had another breakthrough a few years ago when our engineers observed that Uber had a lot of duplicate rides — people travelling along a similar route at the same time.

We asked the question: could we use mobile technology to match these people up in real time? If we could do this, it would be good for passengers because a shared ride is a cheaper ride, good for drivers because they would have more time with a paying passenger in the back seat and good for cities because we would be getting more people in fewer cars. The question was: would people choose to carpool with strangers for a discount? Well, the answer was a resounding yes, because sharing isn’t the issue. It’s price and convenience that matter most to people.

This is San Francisco, or two images of downtown San Francisco, where people are choosing to pool up to 50 percent of the time. On the left is what traffic volume would have looked like if people were riding solo in their individual Ubers rather than sharing a ride, which is displayed on the right. The actual data is on the right.

In cities like Toronto that have UberPool today, over 20 percent of passengers are choosing to pool — that is, to share their ride with another rider. In the first seven months of 2016, UberPool removed 500 million kilometres from the road.

Independent research is also beginning to see a shift in traveller behaviour, with ride-sharing users being much less likely to own or drive a car and much more likely to use public transit or active transportation. When people are given an affordable, reliable alternative, they’re happy to take it. The fact that ride-sharing is an alternative to owning your car is borne out in cities across North America, where data shows that taxis and ride-sharing coexist, even though they have unique rules for their different business models. In some cities, Uber even has partnerships with taxis to increase their utilization.

To wrap up this section. Uber has only been around for seven years, and more benefits are being found every day. At the American Economic Association this week, there’s a paper being presented on less crime against persons during weekend and late night hours, when rides used to be less available. The other week there was a paper on less misuse of ambulance requests because now you have a reliable alternative, in addition to the labour and economic opportunities that ride-sharing creates.

That’s just a glimpse of the potential. An OECD study found that with autonomous vehicles and shared rides, up to nine in ten vehicles could be removed from a city’s streets. By updating regulations, these benefits can be experienced here in British Columbia as well. It’s important to remember that carpooling, ride-sharing, taxi and limo all involve a car, a driver and a paying passenger, yet there are many differences. That’s why for each load, there generally are some distinct rules.

For example, taxis are the only ones allowed to do street hails, and they often rely upon commercial vehicles that are rented out to drivers in 12-hour shifts, 24-7. As we discussed, 50 percent of ride-sharing drivers in Canada operate less than ten hours a week in a week that they choose to drive. The primary use of the vehicle is personal, so regulatory rules have to allow for that accommodation where a vehicle is being used for both purposes.

Moreover, ride-sharing is regional in nature. You aren’t restricted to a city or a county, because that’s not how we live our lives. Drive ride-share on your way home from work, while your spouse is doing errands or if you just need to get out of the house. It’s a great way to make some income. In short, rules can be fair while, at the same time, being different to enable all modes.

[2:15 p.m.]

What about B.C.? We’re asking all B.C. political parties to work together to bring ride-sharing to our province in 2018 under a provincial framework similar to legislation proposed by MLA Weaver. A provincial framework is key. There is no reason there should be different safety rules or restrictions in each of the 20-plus municipalities across Metro Vancouver, the dozen municipalities in the capital region or the half-dozen municipalities in the Okanagan.

On this slide, these are the key components of ride-sharing regulations that focus on safety and consumer rights and that are adhered to by companies like Uber and its competitors across North America.

License the ride-sharing company. Require it to only allow drivers who meet safe driving and criminal record criteria to access the app. Allow standard drivers’ licences, similar to other provinces and states which have found no safety reason for requiring a special licence for ride-sharing or taxi, which are effectively driving the same vehicles that they do to drive their families. Provide consumer protection by ensuring pricing transparency, preventing municipal barriers that create deadheading and other inefficiencies, and allowing anyone who is qualified to participate.

In addition, ride-sharing won’t happen unless there’s a workable insurance product. Effective ride-sharing insurance ensures that there are no gaps between personal insurance for the vehicle and commercial insurance for the ride-sharing time period. Blanket coverage, purchased by the ride-sharing company for all trips taken through the app, facilitates compliance and consistency by ensuring that every trip is covered by appropriate insurance.

In B.C., vehicle owners are able to switch insurance daily. If ride-sharing insurance is just left to the individual driver, there is no streamlined way to ensure compliance. This is why there are challenges with Manitoba’s recent proposal, while Ontario, Quebec and Alberta — which all have enacted blanket policies — have found a solution. Blanket coverage recognizes that most of the time, drivers will continue to use their vehicle for personal uses and keeps that coverage in place for that time period.

Blanket coverage also minimizes the friction for drivers and the workload for the insurer. Since many drivers are trying out ride-sharing for the first time, it avoids them having to make changes to their insurance, back and forth, and it doesn’t mean that the insurer has to deal with 10,000 potential policies for individuals, as opposed to one policy per company with which the drivers are affiliated. Allowing the ride-sharing company to buy insurance for the commercial activity also provides certainty to all parties in a potential accident.

This diagram shows how standard blanket coverage works across North America. During phases zero and 1, a driver is driving but has not accepted a trip. The personal coverage then applies. Once a drive has accepted a trip request in the app, that’s the start of phase 2. The blanket coverage purchased by the ride-sharing company becomes the primary coverage until the last passenger associated with that trip is dropped off at their destination, which is the end of phase 3. This model would guarantee that all standard ICBC Autoplan coverages would apply at all times, when driving for personal use and when driving for ride-sharing. It’s easy to distinguish between the phases of operations, and seamless for all parties.

Finally, ride-sharing companies would purchase this insurance, and it would be based upon how much it is used; i.e., the distance driven by the drivers on their way to pick up a rider and when the rider is in the car. This way it does not impact the driver’s personal insurance policy, and ICBC is able to collect the correct amount of premiums for the risk. The rate for the premiums would be actuarially determined by ICBC actuaries to ensure that they will cover the risk, and companies would pay based upon their claim history. ICBC would apply to the BCUC for the per-kilometre rate to be determined, and the ride-sharing company would make those appropriate payments.

A couple of tweaks are needed to legislation to allow ICBC to sell insurance to a third party in this manner, but similar changes were made in other jurisdictions. It can easily be accomplished in B.C., as well, protecting the taxpayers and riders.

In conclusion, if there are two recommendations that we hope will come out of your report, it’s to (1) have the Legislature pass legislation to enable ride-sharing and (2) create an insurance product to allow that to happen in 2018.

I’d be happy to take your questions. Thank you for listening.

B. Ma (Chair): All right. Thank you so much. Our first question is from Ms. Singh.

R. Singh: Thank you so much for the presentation. My question is…. The way you were explaining it, anybody who owns a car, if they have an app, can use it. How is their relationship with the company? Do they have to pay Uber something for this thing? My second question is also related to the wages. Do the drivers make minimum wage when they are driving?

[2:20 p.m.]

M. van Hemmen: The way that the payment process works is a little bit different than a taxi company, if that’s kind of where your frame of mind is at. In the ride-sharing business model, we’re a service provider to the driver. The driver is operating their own business, and we’re helping to connect them to people who want to access their service. There’s a service fee that’s generally around 25 percent of the rate, which is charged to the driver.

R. Singh: Is it per trip?

M. van Hemmen: A percentage of the fare is the way to think of it. What would happen, in that instance, would be that if you’re going to drive, and you get a $10 fare, we would charge you $2.50 of that. From that, we’re paying for the insurance, the payment processing, the background check, that’s going on, and then marketing and people like myself, as well.

R. Singh: Do they make minimum wage? The research that you have. You have a lot of people….

M. van Hemmen: They’re operating their own business, so it’s slightly different than looking at it as just straight minimum wage. But there’s been research done by Professor Krueger, which is from Princeton, which looked at the wage that Uber drivers earn versus what taxi drivers earn in similar jurisdictions, because labour market dynamics matter a lot. He found that, across the board, Uber drivers were making as much or more than the alternative. I’d be happy to forward that paper on to the committee.

R. Singh: That would be great. Thank you.

J. Johal: Thank you for your presentation, Michael. It was very good.

Have you had any preliminary discussions or just broad conversations with ICBC in regards to setting up this framework?

M. van Hemmen: Yeah. Like probably every MLA on the committee, I’ve shared a lot of information with ICBC, as well, so that they have the information that we believe that they would need in order to make the determination on the products that would be needed to make.

J. Johal: What kind of liability are we talking about when we talk about insurance? What kind of coverage do you think, generally, you see in North America?

M. van Hemmen: Looking at the U.S. on coverage amounts really isn’t the best case, because they’re often quite a bit lower than what we are used to here in Canada. Here in British Columbia, a taxi is required to have a minimum of $1 million. I know MLA Weaver’s bill, I think, said $2 million was the coverage minimum. That type of ballpark is what we see across the rest of Canada.

J. Johal: We had this question earlier, already. Just in regards to wages, is there a broad number you can give us, an hourly wage — what that would be for an Uber driver, what they would make?

M. van Hemmen: It really depends upon the city, the jurisdiction and the labour dynamics of each market where it happens. There are a bunch of different examples, which I can’t remember off the top of my head, that are in Professor Krueger’s paper. I’m happy to forward that, because that does include some numbers for cities in the United States on that.

J. Johal: A couple more questions. I brought this up earlier: surge pricing. It’s not specific to this, but I was just curious. Is it company policy? If so, why do you do it?

M. van Hemmen: Surge pricing is very important for reliability. Different business models look at business different ways. Some say: “We’re going to charge you just one price. If you can find us, great. You’ll get that price. If you can’t find us, sorry, you didn’t get service at this time.” What surge pricing or variable pricing allows is that it incentivizes drivers to come on and serve those peak periods of time.

When you’re an Uber driver, and there’s a price going up in one part of the city, you actually are notified which specific part of the city that is in, so you can go there. As more drivers go to that location, the price actually decreases, because the ratio of people looking at the app to drivers in their region able to serve demand goes down, so it’s able to balance itself out.

In addition, it’s important to point out that now — it was a little different a few years ago — every rider sees the price up front. You know exactly what you’re paying and exactly what you’re going to be getting for the service, so there are no surprises.

J. Johal: Final question here. Are we looking at an unlimited amount of drivers, of what you’d like to see, in regards to people being able to drive and be available, with the taxi industry as well? Number one.

Just to follow up on that, would you have a local office? The other complaint you hear is: “These are foreign companies — the bigger ones. Part of the fee goes to San Francisco or wherever it may be.” Will you have a local office, beyond just yourself at a local office?

M. van Hemmen: To answer the first question, we have a local office already. We actually have UberEats live here in the city. So we have an office already in the city of Vancouver. And yeah, I’m based here as well. I wasn’t going to move. This is the best city to be in.

J. Johal: But there will be a complaint. If someone’s going to complain…. I can call up these taxi companies. Can I call somebody at Uber if I’ve got complaint, beyond what I can do on the app?

M. van Hemmen: Yes, absolutely. The best way for customer service is still to go through the app, but for regulators and things like that, definitely, contact us. We’re here. We’re in the flesh. We’re going to help you get what you need.

R. Kahlon: Thank you, Mr. van Hemmen. I’ve got a couple of questions. I’ll just go one by one on them. The first one is more about your company, because you’re presenting as a company. The next few questions are more about what you think about the regulations here that we have, and so on.

[2:25 p.m.]

My first question is…. There have been some questions around wages that have come up. Uber has had strikes happening in Seattle, New York, France — I can go on; the list is huge — workers not feeling they’re getting treated well and not being paid enough to provide a living for their families. I guess my question to you would be how do you see that? Why would it be different here? What are you thinking that you can do here for labour rights and workers’ rights that perhaps is not happening in other jurisdictions?

That’s my first one. I’ll give the first one. I’ll give the rest after.

M. van Hemmen: What I’d say to that is I think it’s very important for all companies to treat both drivers and riders equally and with respect. I think as a company sometimes as a company we too often erred on the side of the rider and not as much on the side of the driver.

I think one of the important points about competition is that what competition does is it puts in the incentive for you, if you’ve got an imbalance, to correct it because our business doesn’t operate unless there are drivers willing to drive, right?

We’re providing a service to drivers, primarily, that they are the ones who the money flows through. So if we’re not treating them with respect and working hard to ensure that we are the best option for them, then they won’t drive for us. They’ll drive for our competitors. So we need to act appropriately, and we need to keep taking corrective actions where we’ve got deficiencies in order to make that a reality.

R. Kahlon: In all fairness, often the most vulnerable workers are the ones who search for that work, right? Sometimes they feel like they’re stuck and there’s no hope. But I assume some of those regulations will have to come through from the province.

I guess my second question is around wheelchair accessibility and wheelchair-access cars. Does Uber provide that service? I think that we heard from an earlier testimony if a company gets issued a certain amount of licences, one in eight have to be wheelchair-accessible. Is that something that Uber could live with in Canada?

M. van Hemmen: To answer the question in two ways. One, where possible, we actually like to provide service to everyone we can. That includes providing wheelchair-accessible service.

As an example, in Toronto, we actually do have wheelchair-accessible service, and our hope and aspiration would be that we’d be able to find a solution for that as well here in British Columbia. To that end, we obviously don’t own personal vehicles, right? So the base ride-sharing model doesn’t actually factor that in. So what we do, as I mentioned with doing different partnerships with taxi and with other organizations that have those wheelchair-accessible vehicles, is how can we increase the utilization of those vehicles so that they’re doing more wheelchair-accessible trips and fewer trips taking bags to and from….

You know, cruise ship passengers with lots of bags to and from the airport. There are ways that we can actually work together to incentivize that to happen. We’ve been really excited to hold a number of workshops here in Vancouver with Spinal Cord Injury B.C. and a number of other stakeholders to get a good sense of what the groundwork is here in the province so that once we’re up and running, we can start making steps on that as well.

R. Kahlon: I guess, perhaps, one of the challenges was raised earlier by one of the members here — which is, essentially, you leave the trips that become a little bit more challenging to the taxi industry while you don’t provide the service.

I guess my question, back to the point, is: if the transport company has eight, ten, 20 licences, would you be willing to have some sort of ratio where you have a certain amount of cars on the road within that ratio that provides wheelchair-accessible services? That’s what I’m getting at.

M. van Hemmen: Nowhere in North America is ride-sharing regulated based upon like a ratio formula. There are a variety of different ways that have been put in place by regulators to incentivize both finances and better service for wheelchair-accessible vehicles. But nowhere for ride-sharing is off of a ratio.

R. Kahlon: As far as criminal checks go, if we in B.C. had a system where criminal checks were done independently — so every driver has to get a criminal check done independently, not through me taking it in — that would be not a problem for your company as well.

M. van Hemmen: The system that we generally like…. Again, people seem used to the United States, so they compare us to the ones like that. The situation in Canada is actually quite different.

The RCMP has frameworks in place. You mentioned B.C. Soccer, right? Organizations like that are actually able to provide a portal that goes through to RCMP or other police forces that do the check based upon RCMP standards and guidelines. It’s like the B.C. Soccer example that you gave. One of our background check providers is the same one that does B.C. Soccer.

R. Kahlon: So no issue.

M. van Hemmen: The process by which it’s done, in bulk and electronically, is the process that we prefer.

[2:30 p.m.]

R. Kahlon: I apologize to my colleagues. I’ve got one more. Looking through your report that you just handed in to us, it says provincial ride-sharing framework. You recommend or you ask that we have a single safety standard across the entire province. Well, we have one. We have one across the country, right?

M. van Hemmen: No, we actually don’t. In B.C., they talk about the national safety code. B.C. is the only province in the country that actually has the national safety code as described here in the province. We’re the only ones that went through to that implementation. And on driver background checks, there actually are no provincial standards. So some municipalities have no requirement for taxi drivers to actually have a background check. In other jurisdictions, like City of Vancouver, Victoria, they obviously do have that.

There actually isn’t consistency across the province at all. Again, with the national safety code standard for vehicle inspections…. One of the things that we’ve been looking at is to say it doesn’t have to be within kind of the confines of the code.

There absolutely should be an inspection. There are other jurisdictions that have figured this out. I think, to what the minister was saying, they want to see an inspection in place. But if it’s a little bit different than what the system has currently in place, if it can be improved for everyone, I think everyone should be open to that.

R. Kahlon: Yes. Sorry. I should clarify. I meant both the national auto inspection policy that we follow….

M. van Hemmen: Again, that’s just in B.C.

R. Kahlon: It’s just in B.C. So you said some jurisdictions have gotten that right. Can you give me an example?

M. van Hemmen: For sure. An example would be Edmonton or Toronto, where it’s much more streamlined to go through than it would be here. But all the inspections are still being done by provincially certified mechanics. It’s a simple form. They know what to do. Records are maintained, so the regulator can check at any time.

R. Kahlon: Okay. Thanks.

S. Cadieux (Deputy Chair): I’m going to follow up on Ravi’s questions around wheelchair access and wheelchairs. I am concerned that a ride-sharing company like yours can’t provide and won’t provide adequate equitable access, because cars are more expensive. The amount of money it would cost to invest in a wheelchair-accessible vehicle to provide ride-share service couldn’t be made up, unless you are working about an 80-hour week. I just can’t see how that can work.

How would your company, in this jurisdiction, suggest that we could enhance service without off-loading the cost of that service onto your competition, the taxi industry?

M. van Hemmen: Yep. Absolutely. What we have done elsewhere…. I’ll look at Toronto as an example.

S. Cadieux (Deputy Chair): It’s not a good example. No. I’m going to give this context. There is almost no jurisdiction in North America where they have better accessible service than British Columbia, especially if you look at Vancouver.

We’re actually looking at a possibility of going backwards from a percentage of available transportation. I’m concerned that you’re going to incentivize service not being provided, by adding the competition to the marketplace.

M. van Hemmen: The reason I was starting with Toronto…. I agree that there are absolutely differences.

One, we’re talking about a province as opposed to a city, which I think is obviously the biggest distinction. But the reason I was going to start with Toronto is that one of the things that we found is that, actually, there are wheelchair-accessible vehicles out there, but one of the biggest challenges we found in service levels is, actually, that they’re not always being used for wheelchair-accessible service. They’re being used for other trips as well.

What we have done in Toronto is we’ve actually done partnerships with a variety of different owners of wheelchair-accessible vehicles. Actually, some companies have started up in order to be able to partner with us on this. What we do is we provide financial incentives in order for them to accept those wheelchair-accessible trips. The feedback that we’ve heard initially has been very positive. I think there is still a lot more work to do, but the situation is getting better from where it’s been.

Another way that we can talk about improving the asset utilization is through partnerships with transit. In Boston, we have a partnership with the metro Boston transit authority.

One of the things that they’ve found is that, like our handyDART service…. Actually, I talked to TransLink here. It’s the same here. Eighty percent of the trips that are done by handyDART aren’t actually taken by people who are in fixed wheelchairs. They’re people who have other point-to-point transit needs. They require some additional service and help for one thing or another.

If we can help move those people from handyDART — the actual minibus fixed-wheelchair service — and move them to alternatives, whether it be taxi or whether it be ride-sharing companies, like we are in Boston, then you’re able to provide that same existing asset.

[2:35 p.m.]

Now, 80 percent of its passengers have been moved to modes that make more sense for them. They’re better served. At the same time, you can have some better wheelchair-accessible service.

S. Cadieux (Deputy Chair): I don’t disagree with you, except for the fact that most of the people who would use an accessible taxi service would never use an accessible handyDART service. They’re completely different services. The people who would be using the taxi service would not even be eligible to partake in a public transit or paratransit service.

M. van Hemmen: Yes, I think more what I was trying to say is there’s two different….

S. Cadieux (Deputy Chair): I’m comfortable with your answer about providing a subsidy or such arrangement to potentially ensure that that service doesn’t decline.

My second and very quick follow-up is also to a question raised by Ravi. That’s around the employment relationship. This is new territory for governments, and certainly for government and law in British Columbia, I think. The more we look at some of the things that are necessary, like insurance coverage and these sorts of things…. The more we look at that being provided in a fashion, via the ride-sharing company, global coverage for our users, we’re more likely to find that the law will find that drivers are not independent contractors, and they are, in fact, employees.

We’ve got some things to work through as governors, over time, as these things evolve. I don’t think there’s any argument from around the table that ride-sharing is something that’s coming. It’s now how we’re going to do that.

I am curious about how we will manage those issues, because the more that is provided by the parent company, the fewer arguments that can be made that people are independent contractors.

M. van Hemmen: I think that’s absolutely correct. This is one of the areas where, actually, ride-sharing and taxi are very similar. Taxi drivers in Vancouver today are independent contractors, right? Each driver is a small business. They’re going and they’re paying the owner of the vehicle a fee up front in order to be able to provide the service. The expenses are actually their own, with the exception of the insurance, which is purchased by the vehicle owner, as is the rule in B.C.

B.C. is a little bit different in the sense, as well, that we actually have fairly progressive labour rules already. As an example, I saw workers compensation up on the screen. There’s actually a model that already exists for drivers to participate in that. In the same way, nationally, with employment insurance, we have a framework in place that independent contractors can already participate in EI and CPP, which doesn’t exist in the United States and in other jurisdictions. One of the ways that my job is a lot easier is because we live in a country that actually is fairly progressive and has those structures in place. There aren’t the same types of questions or gaps that might be occurring in other jurisdictions.

S. Chandra Herbert: Thanks for this.

Surge pricing. We’ve talked about it. It’s one of those easy things to understand, particularly when it involves horrific events, unfortunately. Those are the ones that hit the news — where the price jumps through the roof when people are trying to escape horrible things. I know Uber apologizes every time it happens, but it seems to keep happening. I just wonder about it. I don’t…. It just seems unethical to me in some ways.

M. van Hemmen: For sure. Do you want me to address that?

S. Chandra Herbert: I will just finish, if I could. Is it something that you think that a cap could be put on? Or are you looking at addressing a cap so that it really doesn’t move into the realm of price gouging beyond a certain extent, I suppose? The reason I ask…. Edmonton — I think it was $1,000 taxi ride on New Year’s Eve. Everyone says: “I need a cab on New Year’s Eve.” People wouldn’t want a cab on New Year’s Eve if they knew it would cost a thousand bucks — most people, anyways.

Can you tell me about that? It is a concern of mine.

M. van Hemmen: Yeah, sure. I think that’s a great point.

One of the most important points is that the consumer actually have the information up front. When you’re going to order a ride, you know exactly how much it’s going to cost at that time. That’s one of the mechanisms that has been put in place now. I don’t know if you’ve ever taken an Uber, but if you do that now, you’ll see a variety of options on the bottom of different types of services, and you’ll see the price associated with that service.

As I mentioned before, the reason surge pricing exists is that even in different areas of the city, there might be events happening at different times with different levels of trip demand. By having variability in price…. Even if it might seem odd, but between…. If it’s, overall, already elevating, and we’re trying to get more drivers in general, trying to send them to one part of the city or encourage them to go to one part of the city as opposed to going to another is important.

[2:40 p.m.]

Then I think on your natural disaster point, that is, absolutely, point taken. The algorithms run automatically. As soon as we’re able to identify that something has happened like that, there are absolutely refunds that take place. There’s no need or no desire to make money off of those types of events. At the same time, you want to have a service available for people to get reliably where they need to go, especially during those scariest moments that we, unfortunately, have to experience.

S. Chandra Herbert: Right. Thank you.

It’s not quite the same question, but in B.C., the Passenger Transportation Board requires, to an extent, “eco-friendly cars,” they say. So the Prius. It obviously makes sense for a business reason as well.

How could we be assured, should ride-sharing come to B.C., that we’re actually going to be driving down carbon emissions, not increasing them? Certainly, some studies I’ve read have suggested that in New York, 3 percent to 4 percent of the new traffic has come because of ride-sharing. It’s actually not reducing congestion. It’s actually increased congestion because people…. In the case, I guess, of the UberPool example, instead of the two of them getting on a bus and taking the bus, they get in the same car together. So you’ve got a new car on the road that didn’t exist before.

Now, that’s a New York example that I’m talking about. It may work differently. I don’t see why it would in B.C., or Vancouver, specifically.

M. van Hemmen: I think fuel efficiency is a really important thing to touch on. On the first side, you see it’s in the driver’s economic self-interest as well to have the most fuel-efficient vehicle possible. Now, of course, most people are using their personal vehicles to do this, so they won’t see that over time.

One of the exciting things that we’ve done in other jurisdictions that especially have low electricity prices — of which B.C. is one; the example would be Portland — is by actually doing partnerships, again, with the utility provider, who sees a certain level of incentive of using electricity demand during off-peak hours — so at night when you’re charging a car — and actually helping provide and encourage the use of electric vehicles on the roads. I’d be happy to share more information about our Portland partnership, as well, that we have to encourage electric vehicle usage.

B. Ma (Chair): Fantastic. I have on my list Ma, Milobar, Sturdy, Weaver. So Ma — that’s me.

I’m going to start with a few small questions. I have a question forming, but I need to understand a little bit more about your perspective before I can actually ask it.

M. van Hemmen: All right. Yeah.

B. Ma (Chair): Do you believe that taxi drivers should be able to drive personal vehicles when driving passengers around?

M. van Hemmen: I’m not sure I understand the question.

B. Ma (Chair): Hypothetically, in terms of the types of…. Sorry, I didn’t mean for that to be so leading.

What I’m struggling with understanding is…. From a regulatory perspective, my understanding is that your app is not regulated. You can use your app…. It’s completely legal for the app to be used in B.C., but what is currently being reviewed is how the drivers who are using that app — how their vehicles and how their service — are regulated. As far as I understand, that….

M. van Hemmen: Are you looking for what’s stopping us from providing service now?

B. Ma (Chair): Yeah. I guess I’m trying to understand where the fundamental difference is between a ride-hailing service through your app and a ride-hailing service through a taxi company — recognizing, of course, there are technology advances in terms of the app.

The door-to-door service. I’m wondering: what is the difference? Why do you believe that there should be a…? I’m not saying that there shouldn’t. I just want to understand what you believe is the fundamental difference.

M. van Hemmen: The biggest and most obvious would be that you’re using a personal vehicle that the vast majority of time is just for personal purposes. So you have personal insurance on that vehicle. The vast majority of your kilometres on that vehicle are going to be personal usage.

What we’re asking for is a regulatory framework that says that that is okay to use that for personal purposes and okay to use it for commercial purposes, as long as these rules are followed when you’re going to be using it for commercial purposes. That would be things such as the usage-based, kilometre-based, commercial insurance, right? That would be something like that. That would be as well as saying that as long as you’ve done an inspection, but with the caveat that if you’re driving this, your personal vehicle and — guess what — you decide to drive it, like, 50,000 kilometres because you’re ride-sharing full-time, well then, yeah, your inspection should be treated the same as a taxi that’s driven that many kilometres.

[2:45 p.m.]

The difference is that the vast majority aren’t. So if you were to look at a Vancouver taxi…. I’m sure the people behind me could speak better to how many kilometres are put on them, but I’m guessing it’s close to 100,000 or more, right? For that level of activity, there’s a certain amount of wear and tear that is very different than for a personal vehicle that’s used most of the time to drive around, you know, my kids to their soccer and their dance in Port Moody.

It’s just creating flexibility to allow that other use. That’s the biggest difference. Then also, by doing that, creating a framework that ensures reliability. Right now what we have is a framework that provides certainty on price, but it doesn’t provide you certainty that you’re going to get a ride.

The inverse is that with ride-sharing, you have a bit of variability with price. The vast majority of time, we’re a cheaper option, but sometimes we’re not. At that point in time, you have a choice, right? Take a taxi, if you see one. I still do. In Edmonton, occasionally I’ll take a taxi. It’s not the end of the world. I want to get to where I want to go. I want to have choice. But if one’s right out the door, then you can do that.

B. Ma (Chair): Thank you. That was very helpful, and it definitely got to the question I was attempting to ask.

I do want to talk a little bit about public safety, because, of course, public safety is absolutely paramount, especially for a government to look after. Whether an injury happens in a personal vehicle or a commercial vehicle, it doesn’t really make a difference to the person who’s been injured or assaulted or so forth. I am very concerned by some of the reports that have come out over the last several years about Uber’s record on public safety.

I’m not trying to…. Well, I guess you are on the spot because you’re presenting here.

M. van Hemmen: I’d love to address any questions you have.

B. Ma (Chair): I do appreciate what you’ve mentioned in terms of a safety standard across B.C. I guess my question for you, at this point, is about enforcement. What do you think a regulatory regime put together in B.C. could do to ensure that enforcement is done properly and effectively in order to assure that public safety is always held paramount?

For instance, we have a backgrounder here that tells us that in Colorado, the Public Utilities Commission did have a regulatory structure for on-demand transportation network companies, which your company was found to be in violation of. They fined the company $2,500 per day for every day a disqualified driver was found to have worked, a disqualified driver being a person with a previous felony conviction, a previous alcohol- or drug-related offence or somebody who didn’t even have drivers’ licences at all.

Uber ended up being fined $8.9 million, but then your company went back to contest it. I guess, as a legislator, that really concerns me. It’s really important that a regulator body is able to enforce properly and ensure that service providers who are providing the service in the province are following the rules.

Can you maybe tell me a little bit about your experience on that and what you would recommend to us?

M. van Hemmen: For sure. I think it’s absolutely important, to not just regulators but to the general public, that rules are put in place and that then the rules are followed. Here in Canada — as I’m part of the Canadian team, I can speak most definitively about that — we work very hard to not just work with legislators but to work with people like Kristin, who presented, and other regulators to ensure that they have access to the information that they need to do their jobs correctly and that we can build a relationship of trust.

If you look across Canada at different regulators, whether it be the city of Ottawa or the city of Toronto, that have put out reports about Uber’s compliance here in Canada, we have made it a high, high, high priority to follow the rules that are put forth, especially when those rules were created, basically, specifically to allow businesses like ours to operate. They were put in place very recently.

B. Ma (Chair): In terms of the regulatory, like a legislative, framework, placing fines on those sorts of violations…. Do you believe that that’s an effective way to go? How did you feel about the $2,500 a day? Do you have any framework for…?

M. van Hemmen: The way that I would answer that is that I think most jurisdictions have monetary penalties as a part of an administrative enforcement regime. That’s not unusual.

[2:50 p.m.]

P. Milobar: I have a bit of a hotelier background, and we do have surge pricing protections in place in B.C. already. So I wouldn’t think it would be that big. That’s why, in every hotel room you go to, you see a maximum-daily-rate card, either on the back of the door or in a closet. That’s by law. It has to be there. It tells you the max that the room can be rented for on a daily basis.

M. van Hemmen: I didn’t know that.

P. Milobar: If there’s a cruise ship in town, or a concert, they can’t exceed that price. They can set their price, but it’s there ahead of time, and there you go. If you ever check into a hotel and you think you’re getting gouged, look at the back of the door and see. We do have the ability to do things like that, and I don’t see why a taxi or an Uber industry should be treated any differently in that respect, in terms of consumer protection.

There’s no great magic to why Uber would be able to provide a ride cheaper than a cab. It’s all about business input costs for that ride. Uber drivers are not driving at a loss to do me a great favour by driving me somewhere cheaper than a cab might be. It’s because some of the business input costs that a taxi company would have would be cheaper.

My question is around blanket insurance. That’s obviously a big cost for a taxi, and it’s obviously a big cost for Uber, or you wouldn’t be trying to get blanket insurance as part of an implementation. Given that a car is a car, and a driver is a driver, do you not see that blanket insurance should be available for anyone that’s driving? I ask that because I know you’re going to say it’s a personal vehicle, and it’s not under use all the time.

I can understand that, but a cab isn’t sitting waiting if it doesn’t have a fare either. Under your example, as I understand it — unless I misunderstood how you showed the app working — if I’m an Uber driver and I’m sitting waiting for somebody to hail me, I’m not paying that commercial insurance rate yet. It’s only once I accept that fare. A cab sitting at a curb waiting for a fare is really no different than the person driving around in a personal car waiting for a fare.

Would you be advocating that blanket insurance should be equal across the board? Or should it be blanket only available for Uber, and “Taxi industry, you’re stuck with what you have”?

M. van Hemmen: Great question. I wouldn’t be speaking for the taxi industry one way or another on what type of insurance they would be seeking. I think we can call it blanket insurance, but it actually exists in another term right now. It’s basically non-owned-fleet insurance.

Right now taxis purchase a kind of owned-fleet insurance, because they own the vehicles. In this case, it would simply be a non-owned-fleet insurance. It already kind of exists. It’s just that someone who’s not the owner of the vehicle would be purchasing that insurance for that period of time.

If there are effective and actuarially sound means to reduce rates for any other type of business, I think that’s absolutely up to them to try to pursue as much as they can. We’re not trying to find a discount or a break on this. What we’re wanting to do is to ensure that commercial insurance is in place when the vehicle is actually being used for commercial purposes.

P. Milobar: Then I’m not misunderstanding how your app works. So the commercial insurance for the Uber driver kicks in when they initiate a fare request.

M. van Hemmen: When they accept a request. That’s correct.

P. Milobar: But if they’re sitting waiting for a fare request, they’re still on their own personal insurance.

M. van Hemmen: That’s correct. As an example, there’s very little way to know, at that point in time, if you’re going to be going to wait for a friend to come in, right? If you’re waiting for a friend, or if you’re going to go do something else, you’re not actually on the system, engaging in commercial activity at the time.

P. Milobar: If I drive my Uber car home for the night and I park it in my driveway, it’s on my personal insurance?

M. van Hemmen: That’s correct, unless you have a paying passenger.

P. Milobar: If my taxi was parked in the yard for the night, it could technically be on a lower insurance, then, at that point too?

M. van Hemmen: Yeah. I would say that ICBC would have to have some insurance at some point in time. I think the way that I would look at it there is that the overall risk is just averages, right? If you were to look at how ICBC would treat a commercial vehicle, it would be an average of the time that it would be used in an incidence. In this case, it would just be two different averages. One would be the commercial use average, and one would be the personal use average.

P. Milobar: But does not your fare structure rely on knowing what that per-kilometre cost of insurance would be? That gets calculated into a base fare, so that you make sure that you’re collecting, at a minimum, the Uber cut to cover the insurance costs and all those others, and that would factor into a bare-minimum price per kilometre.

M. van Hemmen: Insurance is baked into our cost structure, for sure.

[2:55 p.m.]

J. Sturdy: There has been some concern expressed around the revenue streams, on the 25 percent that you quoted. Could you tell us where that revenue goes, whether there are corporate taxes or other taxes here in British Columbia?

M. van Hemmen: Yeah, for sure. There is no PST on transportation, but there is GST on transportation, including ride-sharing in Canada. Of the 25 percent that would go towards Uber, there are a number of costs that are actually borne locally. In fact, the vast majority of the costs are borne locally. The first and obvious one, which we’ve talked a lot about, would be insurance. The second one would be payment processing. Another one would be background checks. Those are examples of costs that are all borne locally in the jurisdiction in which it happens.

Then there’s the marketing, which is providing incentives to riders and drivers to participate in the service — billboards and things like that. Marketing happens locally as well. Our team, which is based in Canada…. We have just over 100 people now across Canada, so those costs are all borne locally, including…. And then employees of Uber Canada, so Uber Canada does…. It’s questions about tax. Uber Canada does pay income tax in Canada.

J. Sturdy: Okay. So for net income, is this a taxable income in Canada?

M. van Hemmen: There is taxable income in Canada, yes.

J. Sturdy: There’s also been some suggestion that this is really going to be an urban-focused service and that there’s not an interest or there wouldn’t be an interest or there’s, in fact, somewhat of a disincentive, perhaps, even to make this available to drivers in rural British Columbia. Would you say that’s true?

M. van Hemmen: Absolutely not. I think we start our business in large municipalities, but our hope is to be able to provide reliable rides for everyone, everywhere. Now, that’s a pretty audacious goal, but that’s our hope.

I’m from the north end of Vancouver Island, a really small town 200 kilometres north of Campbell River. Like, if you’re thinking you hit north Island when you hit Nanaimo, no. That’s the middle of the Island. I grew up on the north end of the Island, right? Transportation challenges are actually more acute there.

It’s one of the reasons, as well, why you see…. In British Columbia, when we did polling in Metro Vancouver, we found higher support for ride-sharing in Surrey and in the Tri-Cities than we did in the city of Vancouver. It’s super high support across everywhere, but it was noticeably higher there. At first, we didn’t get why that would be because we thought more people would be looking to use it in the city.

The reason was that people really want more options where they don’t have lots of options. So in the suburbs and in rural and remote communities, there are fewer options, so more people are looking for it. Hopefully, we’ll be able to be in a position to provide it.

J. Sturdy: You don’t need a certain capacity or a certain number of drivers. Are there any thresholds that you need to meet as a company?

M. van Hemmen: The main one that we look at is if we can reliably provide service. I think the most frustrating thing to anyone is if you open an app, and it says, “No rides available,” right? No driver is there to provide service.

When I talked about Innisville, one of the best parts about that type of partnership was that there was an incentive for drivers to be available in order to be able to provide service — even in a smaller community that wasn’t 100,000 people or 75,000 people.

J. Sturdy: How do you deal with that in a place like Pemberton or a place like Bowen Island or a place like Port McNeill? At what point could that service be initiated?

M. van Hemmen: To be totally honest, we haven’t completely cracked the nut on all of those things, as there are challenges still to be solved. But for communities that are proximate to larger geographies that wouldn’t necessarily have the remote designation but that would be more rural, as opposed to remote, we have been able to solve that.

We look forward to working with you as we become operational, hopefully, here — to be able to try to figure out how to do that in a creative way in British Columbia as well.

A. Weaver: I have a number of questions. Really short answers, hopefully. Number one, are there any jurisdictions that you are aware of, where Uber operates, where Uber drivers have been required to have video cameras in the car for safety reasons?

M. van Hemmen: No. Actually, Ottawa did a study on that, so I’m happy to provide that.

A. Weaver: If you could provide it. I’m just getting jurisdictional. Are there any jurisdictions where Uber operates where surge pricing, maximum pricing, has been implemented in a regulatory fashion?

M. van Hemmen: Not that I’m aware of, but I’m most aware about North America.

A. Weaver: Okay. Are there any jurisdictions where Uber is operating where pay-as-you-go insurance is in place from either a private or a public insurance company?

M. van Hemmen: Everywhere we operate in North America.

[3:00 p.m.]

A. Weaver: Is pay as you go.

M. van Hemmen: Everywhere.

A. Weaver: Okay. So you pay by the kilometre because of the fact that you have your special blanket pricing.

M. van Hemmen: You basically buy all the exact same coverages but at a commercial rating, which is a rating that always is more costly than a personal rating across North America, across Canada, where we operate, and the same in the United States. It’s like standard. It’s not….

A. Weaver: I’m creating a fair example, then. If the taxi industry were also given pay-as-you-go insurance, the issue about idling or not idling is actually moot, because if you’re sitting waiting in a stall, you’re not paying.

M. van Hemmen: They would just have to have some base insurance for that other time.

A. Weaver: Okay. In British Columbia, if I loan my car out to a friend, my insurance covers my friend. Let’s suppose I decide that I want to drive Uber all day long. Then I’m going to go to sleep, and I’m going to loan my car out to my buddy who’s going to drive Uber all night long. How do you cover that in terms of my private insurance and in terms of your corporate insurance and liability there?

M. van Hemmen: Typically, every trip that’s connected through the app is covered, regardless of who. That being said, that experience that you just talked about, we don’t want that to happen. That’s one of the reasons why every driver actually has to have their picture on the app, so the rider sees the picture of the driver before they actually get the car pulling up to them.

The rider is supposed to see the name of the driver, their picture, the licence plate and the make and model of the vehicle. If a different vehicle pulls up, and they say they’re your Uber, don’t get in. They’re not your Uber. In addition to that, if you get in the car, or you’re looking in the car, and you quickly see that this isn’t the same person who is on here, absolutely don’t get in the car. Absolutely.

A. Weaver: The final thing is…. I was wondering if you could give me, and us, a sense of the demographics of your typical driver and how that might be different from other forms of transportation — whether you have more women, more new immigrants or more middle-class moms and dads who are just in-between…. What’s the demographic of the drivers?

M. van Hemmen: Honestly, we see a variety of drivers. When you talk about women, across North America, 20 percent of our partners, the drivers, are female, which is different than traditional transportation providers.

You also see a large group of older men, kind of early retirees, the kind of guys like my dad, as he’s getting close to…. Mom thinks of the idea of him retiring, and she’s like: “No, you’re not going to be here. You’re going to go out and do something as well.” We see a lot in that demographic.

Then we see a lot of young people as well. Not just Metro Vancouver, but cities across North America are becoming much less affordable. So you see a variety of not just kind of traditional taxi drivers, although you see some of those as well. It’s much broader.

B. Ma (Chair): You were a very popular witness. I let it run long, so you’ve been on the hot seat for a little while. Thank you so much for answering all those questions.

M. van Hemmen: No worries. I appreciate the time of the committee. As well, I’ll be presenting written comments, especially addressing what you had made requests about. Thanks a lot.

B. Ma (Chair): Fantastic. Thank you. And thank you all for coming up to the first day of hearings. We will reconvene tomorrow at 9 a.m. We are now adjourned.

The committee adjourned at 3:03 p.m.