The committee met at 9:01 a.m.

[B. Ma in the chair.]

B. Ma (Chair): Good morning, everyone. My name is Bowinn Ma. I’m the MLA for North Vancouver–Lonsdale and the Chair of the Select Standing Committee on Crown Corporations. Thank you so much for joining us here.

I’d like to begin with recognizing that our meeting today takes place on the traditional territory of the Musqueam, Squamish and Tsleil-Waututh peoples.

We are the Select Standing Committee on Crown Corporations. We’re an all-party parliamentary committee of the Legislative Assembly with a mandate to examine, inquire into and make recommendations on regulations regarding transportation network services in British Columbia. We must issue a report by March 31, 2019. The committee is meeting to hear from expert witnesses on the following four questions and the following four questions alone:

(1) What criteria should be considered when establishing boundaries?

(2) How should regulations balance the supply of service with consumer demand, including the application of Passenger Transportation Board’s current public convenience and necessity regime as it pertains to transportation network services?

(3) What criteria should be considered when establishing price and fair regimes that balance affordability with reasonable business rates of return for service providers?

(4) What class of driver’s licence should be required for ride-hailing drivers to ensure a robust safety regime without creating an undue barrier for drivers?

In addition to the witnesses that we will have today, over 700 organizations — including municipalities, First Nations, taxi companies, ride-hailing companies or ride-sharing companies, and disability advocacy organizations — have been invited to make written submissions covering these four questions. All of the information received will be carefully considered by the committee as it prepares its report to the Legislative Assembly.

I should note, also, that the four questions are the questions that we expect all presenters to focus their presentations on, with the exception of the very first presentation from the Ministry of Transportation. They were invited to provide, basically, kind of a briefing for the committee, so it may include information that goes beyond those questions, as I understand.

Today’s meeting format for each individual meeting will consist of 25-minute presentations followed by 20 minutes for questions from committee members. All meetings are recorded and transcribed by Hansard Services, and a complete transcript of the proceeding will be posted on the committee’s website. These meetings are also broadcast as live audio over our website.

I’ll now ask the members of the committee to introduce themselves, beginning from my right, with Mr. Olsen.

A. Olsen: Good morning. My name is Adam Olsen. I’m the member of the committee from the B.C. Green caucus.

[9:05 a.m.]

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

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

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

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

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

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

B. Ma (Chair): Assisting the committee today are Susan Sourial and Stephanie Raymond from the Parliamentary Committees Office. Steve Weisgerber 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 the time to be with us here today and would like to introduce our first presenters. We have four presenters from the Ministry of Transportation and Infrastructure here to provide a technical briefing.

We have Deborah Bowman, assistant deputy minister, policy and programs development. We have Steven Haywood, executive lead of taxi modernization; Katherine Kirby, executive director for policy and legislation; and Jeremy Wood, senior legislative director. You now have 25 minutes to present, and then the committee will ask questions. Thank you.

Presentations on
Transportation Network Services

MINISTRY OF TRANSPORTATION
AND INFRASTRUCTURE

D. Bowman: Good morning. Thank you to the committee for the invitation to be here. As introduced, I’m the assistant deputy minister responsible for taxi modernization. On my right is Steven Haywood, who is formally, as well, the director of the commercial vehicle safety enforcement branch, who did present to the committee last year, when you first started to deliberate this important topic for British Columbia. On my left are two of my very senior staff, who will be walking you through. Jeremy will be walking you through the technical briefing this morning.

The purpose of our presentation is really to highlight the recent legislative changes, specifically the changes brought forward in Bill 55, the Passenger Transportation Amendment Act of 2018, to ensure that the committee has the context on what amendments were made, if any, in relation to the committee’s terms of reference. We hope this presentation will be helpful to situate the committee in terms of the two days that are coming ahead of you and the presenters that will be speaking to the four topics that were outlined by the Chair.

At this point, I’m going to pass it over to Jeremy Wood, who’s going to walk you through Bill 55 and the key components that relate to the four questions that the committee is looking at.

J. Wood: Thanks, Deborah. Good morning, Chair, committee members.

As Deborah mentioned, Bill 55 is the logical starting point for this morning’s presentation. I’ll just give you, for context on the presentation this morning…. I’m going to do a little bit of a review of Bill 55, just a post-Christmas break to jog everybody’s memories of the contents of the bill. Then I’m going to speak specifically about some of the changes in the bill related to this committee’s terms of reference in respect of supply, boundaries, rates and driver licensing.

Bill 55, of course, establishes the legislative framework to enable commercial ride-hailing in British Columbia. I just want to take a moment to define, in this presentation, what is meant by ride-hailing. You’ve heard lots of terms — ride-sharing, ride-hailing, transportation network companies.

What this presentation means in terms of ride-hailing is what the committee referred to in its February 2018 report on transportation network companies as prearranged transportation in a privately owned vehicle for financial compensation that is paid to the driver and to a company, the transportation network company, that uses online technology, principally app-based services, to connect passengers with drivers willing to use their vehicles to drive paying passengers. That’s what this presentation is referring to when I use the simple term of ride-hailing.

The bill was introduced on November 19, 2018, in the last session of the Legislative Assembly. It is a very complex piece of legislation. There were significant amendments to eight statutes, which I will list off for the benefit of the committee. First, there was the Passenger Transportation Act. There were amendments, also, to the Insurance (Vehicle) Act, the Insurance Corporation Act, Motor Vehicle Act, Commercial Transport Act, the Community Charter, the Vancouver Charter and the Local Government Act.

[9:10 a.m.]

The bulk of the amendments, as the name of the bill suggests, were to the Passenger Transportation Act. Fifty of the 80 sections involved amendments to the Passenger Transportation Act. The PTA changes that are most relevant to three of the four areas of study in the committee’s terms of reference relate to supply, boundaries and rates. I’ll talk about those in a minute.

Bill 55 was to be brought into force by regulation of the Lieutenant-Governor-in-Council. Apart from bringing into force the bill, there’s a significant amount of work that’s required to develop regulations to operationalize Bill 55. Of these regulations, for example, there’ll be a significant number developed under the Passenger Transportation Act and also a significant number developed under the Insurance (Vehicle) Act, as well as those other statutes I mentioned earlier.

Beyond the regulations, there’s also other significant work. Of course, there’s the development of the insurance product, but there are also some IT infrastructure changes that are required to support enforcement: the establishment of a data warehouse to enable the evidence-based, data-driven model in B.C. for the taxi and ride-hailing industry.

Over to slide 3 in the presentation for you. I just want to take a moment, before jumping further into the content of Bill 55, to highlight two key definitions in the bill, the first being “transportation network services.” This is the provider of the technology platform that connects passengers and drivers and that will enable payment to be done by way of the on-line platform as well. That is what transportation network services encompasses. It’s defined in the legislation as being either (a) or (b).

I think I’ve highlighted (a) already, but I just wanted to point to (b), as well, in the definition. It’s either one of these, and (b) is “prescribed services,” meaning…. We anticipate that there’ll be changes in the industry as technology changes, so this definition is flexible. It can adapt to changes in technology over time because we can prescribe other transportation network services.

The other key definition here is “transportation network services authorization.” This is the authorization that will need to be on a licence issued under the Passenger Transportation Act in order to provide transportation network services in British Columbia. It’s a new type of authorization above and beyond those that exist now in the act in relation to taxis, taxi services and, for example, intercity bus authorizations.

An interesting bit of trivia you can share at the next party: a taxi authorization, an intercity bus authorization and a transportation network services authorization are also incorporated into the definition of a “special authorization” in the act. Wherever a “special authorization” is referred to, it’s one of those three authorizations.

Moving on to slide 4. As I mentioned, in order to deliver transportation network services in British Columbia, a licence is required under the Passenger Transportation Act. There are also a number of other requirements that a licence holder must meet. These include holding a valid safety certificate. This is the national safety code certificate under division 37 of the Motor Vehicle Act regulations.

A national safety code certificate means that, for example, the company will need to comply with regulations respecting vehicle inspections. They’ll need to ensure that drivers who are authorized to use their on-line platforms submit documentation proving that they’ve undertaken the necessary vehicle inspections, for example, according to the province’s safety code regulations.

As well, licence holders will need to meet prescribed requirements. They’ll need to also be in compliance with the act, regulations and other applicable laws. Importantly, they’ll need to ensure that passengers who are transported in ride-hailing vehicles are charged rates that are approved and set by the Passenger Transportation Board and comply with any rules in respect of those rates that the board may set.

Over to slide 5. I just want to highlight, very quickly, the role of the Passenger Transportation Board vis-à-vis transportation network services. The board, of course, is an independent tribunal whose members are appointed by the Lieutenant-Governor-in-Council. It is the board that will make determinations on a transportation network services licence application.

[9:15 a.m.]

In making that determination, if the board approves an application, they’ll set terms and conditions on the licence. The two most relevant to the committee’s terms of reference are, of course, supply and boundaries.

Now, the concept of supply, or the number of vehicles authorized to operate under a licence, is actually captured by the term “fleet size” in the legislation. The concept of boundaries, where a vehicle is authorized to operate or authorized to pick up passengers under a licence, is captured in the legislation under the term “operating area.”

Of course, as I’ve highlighted already, the board will set rates to be charged to passengers conveyed in passenger-directed vehicles. I should also just mention that with the changes in Bill 55, any vehicle operating under a transportation network services authorization is deemed to be a passenger-directed vehicle under the act, meaning all regulations and provisions in the act with respect to passenger-directed vehicles and their drivers apply. Of course, the board will also set rules applicable to the rates.

I just want to draw a distinction between the terms and conditions on the licence and the board’s authority to set rates. Rates are not set out in the licence as a term and condition of the licence. The board sets the rates separate from the licence. This provides, for example, flexibility. The board doesn’t have to amend the licence each time a change occurs in the rates. The board sets the rates for various areas, and the licence holders comply.

Okay. Over to slide 6. I just want to, with this slide, highlight the TNS, or transportation network services, application process — just to highlight how it will work. It’ll mirror the current process, whereby a prospective licensee will submit an application to the registrar. Because it is a licence for a special authorization, the registrar then forwards that application to the board, and then the board considers the application. In doing so, the board applies a three-part test.

I’m just going to walk through what that three-part test is. I’m also going to highlight, now, that Bill 55 changed the application of this test. On the next slide, I’m going to highlight what those changes are.

As far as the three-part test is concerned, there are three requirements. One is that the board looks at whether there’s a public need for the service. Second, the board considers whether the applicant is a fit and proper person and capable of delivering the service. Three, the board considers whether the application, if approved, would promote sound economic conditions in the passenger transportation sector.

Now, if the board approves the application, the board then, as I mentioned, sets terms and conditions on the licence. These include supply and boundaries. As well, there are a number of other terms and conditions the board may set. Bill 55 included some new terms and conditions. For example, there’s information that must be available to the passenger who takes the service, and information that could be relative to safety, displayed in the vehicle or by way of the app, or it could also be information about consumer protection.

In addition, the board must set, if they approve a licence in respect of transportation network services, a term and condition around information and data that the licensee must provide to the board and the registrar. This information and data could be around wait times, demand for the service, type of trip — in an accessible vehicle or a non-accessible vehicle — etc.

Once the application is approved by the board, the board then sends that information back to the registrar. The registrar then checks that the prospective licensee meets safety requirements. These include having the national safety code certificate, as I mentioned earlier, but, as well, ensuring that the prospective licensee has adequate insurance and meets other prescribed requirements. If the registrar is satisfied that these requirements are met, the registrar then issues the licence to the applicant.

Moving over to the next slide, here I just want to highlight the changes in Bill 55 with respect to the three-part test. The first bullet sets out how it operates currently in the act. That is that the board may approve an application if the board considers that the three elements of the test are met.

[9:20 a.m.]

Now, with Bill 55, the amendment to the three-part test is that the board may approve an application, in whole or in part, after considering whether the application meets the three elements of the test. The interpretation of this change to the three-part test is a matter of statutory interpretation for the board.

If you were to take a plain-language reading of these changes here, I certainly think it’s clear that the board still must consider the three-part test. But the test is not the only basis upon which the board may decide to approve an application in whole or in part. Again, it is under the purview of the board to apply these changes.

Moving over to slide 8, I now want to just dig into some of the changes in Bill 55 specifically related to the terms of reference of the committee. I’ll start here with supply and boundaries. As I mentioned, the concept of supply is captured under the term “fleet size” in the legislation. Currently this term “fleet size” is not defined in the act.

However, under Bill 55, “fleet size” was added to the list of definitions and is to have a prescribed meaning, meaning the definition will be prescribed in regulation. I think this is important, because this will allow for a distinction to be made between what it means for fleet size in relation to, say, a taxi operator and what fleet size means in relation to a ride-hailing transportation network services situation.

I think we all understand very easily, clearly, what fleet size means in relation to the taxi industry. These are single-purpose vehicles generally used 24 hours a day. In the ride-hailing situation, though, it’s a bit different. You’ve often got people using their own private vehicles part time to provide a service. But ultimately, the definition of “fleet size” will impact what supply means in relation to ride-hailing vehicles authorized to operate under a transportation network services licence.

In respect to boundaries or geographic areas where vehicles authorized under a licence are able to pick up passengers, the board has exclusive authority to set that as a term and condition. There is no regulation-making authority with respect to boundaries under the act currently or in relation to changes under Bill 55.

Moving over to slide 9. I’ll just talk briefly about changes related to rates or fares, the pricing of services. Bill 55 included a change to the definition of “rates” to set out minimum and maximum fares that may be charged to passengers. This really sets an authority for the board to set a minimum charge or a maximum charge — a ceiling, if you will. This authority to establish rates and any applicable rules that will apply to those rates was expanded to apply to a TNS authorization.

Now, as is the case currently under the act, a licensee can apply to the board to change rates or change rules applicable to those rates. That will apply to the TNS situation as well. But there is no regulation-making authority under the act for the Lieutenant-Governor-in-Council, for example, to set rates that will apply to taxis or to ride-hailing situations as well.

Moving over to slide 10. The fourth area of study in the committee’s terms of reference is driver licensing. Of course, there was much discussion upon introduction and during committee stage of debate around driver licensing. But in fact, I think it’s important to point out that Bill 55 did not make any changes to the current provincial program for driver licensing, which is set out under the Motor Vehicle Act and, specifically, under the Motor Vehicle Act regulations.

Currently a driver of a passenger-directed vehicle is captured under those regulations as a driver of a taxi. What that means is that a driver needs to have, at a minimum, a class 4 commercial driver’s licence.

[9:25 a.m.]

I just want to highlight, for the benefit of the committee, what the requirements are specific to a commercial class of driver licensing — specifically, a class 4 driver’s licence. I’ll just list through these. A person must be at least 19 years of age, hold a valid full-privilege driver’s licence — i.e., a class 5 or 6 in British Columbia or an equivalent licence from another jurisdiction — and that person must have at least two years of non-learner driving experience.

A person must also meet, based on a review of their driving record from each jurisdiction in which the person drove in the previous three years, the following prescreening criteria. They have to have a driving record with fewer than four offences that resulted in penalty points in the past two years. They must also have no motor vehicle–related Criminal Code convictions — or the equivalent, if the driver is from outside of B.C. — in the past three years. They must also not have any fines or debts owing to ICBC, and the person must pass a knowledge test and a road signs test to get a commercial learner’s licence and then pass a road test that includes passing a pre-trip inspection of the vehicle.

Another significant requirement is the person must complete a driver medical examination to assess the driver’s medical fitness to drive. And then once a person holds a commercial class of driver’s licence, this examination is required on a schedule. It’s every five years up until age of 45 and then every three years beyond age 45, up to age 65. And then after age 65, a driver medical examination is required every year. I just wanted to highlight those particular requirements relative to a commercial driver’s licence.

In particular, if the committee decides to revisit its recommendation from February 2018 in its report on transportation network companies…. As the committee will recall, in that report, the recommendation was around a class 5 licence with additional provisions, such as medical exams. One consideration, perhaps, for the committee is: if a person is to hold a class 5 licence and is required to have, in addition, a driver medical exam…. There are other criteria that I outlined earlier. If you are adding any one of those, it very quickly becomes a class 4 licence.

I just also want to point out that driver licensing in British Columbia falls under the purview of the Ministry of Public Safety and Solicitor General. That ministry has responsibility for those provisions of the Motor Vehicle Act and the Motor Vehicle Act regulations. As we all know, it is ICBC that administers driver licensing in this province, and any change to add a new class of driver licence or to supplement an existing class of licence with additional requirements would, of course, need to be fully explored with ICBC to determine the implications from an administrative perspective.

Over to the last slide. In terms of next steps, just to set the road forward — no pun intended — with respect to the implementation of ride-hailing in British Columbia…. Obviously, the ministry — and, I know, the board as well — is awaiting the committee’s report and recommendations. Then over the next six months, there are a number of streams of work that are already underway and will be completed.

These involve the development of policies and procedures. The board itself is going to, I know, develop a whole new range of policies and procedures with respect to the ride-hailing industry. The registrar, as well, has a significant amount of work, whether it be around vehicle identifiers and things of that nature. So there are a number of policies and procedures.

There is, of course, as I mentioned earlier, the development of regulations. A significant number are required. They’re very detailed. As well, the IT infrastructure changes that are required are a significant amount of work.

Then, I cannot forget consultations. Everybody needs to be prepared, including, obviously, the industry and folks there. So there is going to be a significant amount of consultation required as well.

[9:30 a.m.]

Of course, as the minister has stated, the applications for transportation network services’ licences to the board are expected in September of 2019, this year.

With that, I conclude the briefing portion of the presentation this morning.

B. Ma (Chair): Are you sure? You have two minutes left on the timer.

J. Wood: Well, I am a bureaucrat, so I could wax on for a minute and 50 seconds if you’d like.

B. Ma (Chair): That’s all right. We’ll add it to the question portion, so we’ll have 22 minutes for questions.

We’ll begin with Peter, Mr. Milobar.

P. Milobar: Two questions, one really quick one. When you referenced the class 4, and you need two years unrestricted driving, is that two years after you’ve completed your L or two years after you’ve completed your N? Just for clarity for people out there.

J. Wood: It’s two years after you’ve completed your L.

P. Milobar: Okay. The second question I guess I have is…. There’s a lot of talk about the timelines. Obviously, the whole purpose of us meeting, as I understand it, is because I think everyone’s somewhat in agreement — or at least the vast majority — that the current proposed regulations aren’t going to cut it, necessarily, or there’s not much point of us meeting to come up with even further recommendations. That’s obviously put somewhat of a stop on any pre-work, based on current rules that are in place in Bill 55.

I guess the question I have, though, is when you’re looking at a six-month implementation…. Our report’s not going to be ready for a few weeks yet. The minister’s going to have to contemplate what, if anything, they actually change from the bill.

The amount of work that you’ve listed…. Let’s say that you actually are able to receive applications in September of 2019, which, I think, when you start looking at the timelines, is going to be a very big hill for you to try to accomplish. How many more PTB members have you been authorized to hire? What staffing resource increase? Has there already been a budget approved for that? How exactly are any of these things…?

We’ve heard about the delays in even getting those 500 licences out. What timeline should the public reasonably expect? Any number of licences being issued that they would consider — not the first licence but a reasonable number — to be out on the streets after you start implementing if there’s not a staffing uptake…. What’s the plan for that hiring process to start taking place, and where have the funds been approved?

D. Bowman: I’ll take that question. Thank you for it. In terms of the budget, as you are aware, the budget is going to be released in a number of days, so it would be premature for me to talk about the budget before it’s released.

However, the ministry has been working very hard to identify the project plan and the elements required to deliver this in September. We have clear direction from the minister that this deadline has to be met. There’s a number of streams, work streams, underway.

Obviously, we’ll be taking into consideration all of the recommendations that will come forward from this committee, but there’s still a significant amount of work that we can do outside of the four questions that you’re deliberating. So work has not stopped. Work continues on in every aspect that we can. We do understand the public demand for this service, and we’re working very hard to achieve the deadlines that have been publicly committed to.

In terms of the board, the board is an independent tribunal that puts forward its requests to government in terms of increasing its capacity, and the ministry has identified the need for additional resources. I cannot, though, pre-empt the budget announcements by telling you the extent of the budget lift that’s been requested. Certainly we have iden­tified that the branch, under the oversight of the registrar, will require more staff as well as the enforcement component, so through CVSE there will be additional requirements there to enforce the regulations as they’re implemented.

P. Milobar: Can I just add one quick follow-up on that?

B. Ma (Chair): Yes, of course.

P. Milobar: Thank you. If there were recommendations brought forward that would actually streamline the process, that would reduce the need for as much staff, or…?

D. Bowman: It’s quite likely, yes, if there were.

S. Cadieux (Deputy Chair): I have two questions, and they’re totally separate, just so the Chair is aware. First off, the legislation enables, essentially, TNSs to be active, or the non-taxi form.

[9:35 a.m.]

Theoretically, you aren’t prepared to make those decisions yet — right? — because you haven’t got all of these things in place around data and computer systems and all of that. We’ve been told that will be ready September-ish.

Yet we know that we already have a TNS that’s been approved, and that’s Kater. Kater has been given approval to operate, so theoretically, one would hope, then, that the same process would be followed — considerations for public need for service, applicant fit and capable, application promotes sound economic conditions in the industry.

If that’s the case and those considerations were made, what’s going to happen when, say…? I have no idea how that was assessed. In fact, I don’t think it was. But if now, in the fall, three other companies come forward and the PTB’s assessment is that there is only this much room in the market, how, then, does one make a fair assessment around those three companies, given that somebody else has been given preapproval to operate?

D. Bowman: I can’t speak to the board’s decision around the licences and the application to expand existing licensees to include other operations, if you will. What I can speak to is that there’s a process, through legislation, that the board has to adhere to. So they will apply the test. There’s a lot of flexibility, as Jeremy said, in the test itself that is greater than the flexibility that they had previously with the three-part test. So there have been changes made.

I’m afraid I can’t presuppose what the board’s decision would be made on future applications. That’s not our role.

S. Cadieux (Deputy Chair): No, I understand it’s not your role, but the ministry helps define the conditions for the board and helps to put the board in place, so one would expect that there’s an understanding of how that process does get made. And I would think that you could speak to that.

Moving on, my second question is around the class 4, class 5. First off, my understanding, based on the previous testimony of the ministry at the first committee meeting and now this discussion about what it takes to get a class 4 licence…. You need the safety certificate. You need the inspection of a vehicle. You need class 4 and a medical for the class 4. With the numbers that have been put forward for that, that adds up to about $550 for a driver to get through that process. Is that correct?

J. Wood: I just would point out that the first two criteria that you listed out there, the safety certificate and the vehicle inspection, are requirements with respect to licences under the Passenger Transportation Act, the licence to operate. Those are not the driver licence requirements.

S. Cadieux (Deputy Chair): Right. But if a driver wants to operate as…. There’s no point in having a class 4. What we’re talking about is people that want to operate as TNS drivers, with their own vehicle. So all of that would be a consideration. Correct?

J. Wood: Right. So getting the vehicle inspection and…. In terms of the driver medical examinations, they can vary in terms of the price.

S. Cadieux (Deputy Chair): Sure, depending on the provider.

J. Wood: Yeah. So it could be $500, as you mentioned there, yeah.

S. Cadieux (Deputy Chair): Or more.

Does the ministry have any data to support that class 4 drivers are safer than class 5 drivers? Is there any data from any other jurisdictions that you’ve reviewed from that perspective that is leading this sort of preference?

J. Wood: I’ll just highlight that first, if drivers of ride-hailing vehicles are required to have a minimum of a class 4 licence in British Columbia, B.C. would not be the only jurisdiction in this country or elsewhere that requires a commercial driver’s licence for ride-hailing vehicles. There’s Alberta, Nova Scotia and Quebec right now in Canada that do require that as a minimum — holding a commercial class of driver’s licence.

[9:40 a.m.]

With respect to safety and a class 4 licence, those additional requirements are there to ensure that, because these drivers can be on the road for a significant amount of time, they have to meet that threshold.

With respect to the stats around class 4 or any other commercial class of licence versus a non-commercial class of licence, it’s really hard to do an apples-to-apples comparison, because you’re talking about a much greater population in the non-commercial class of driver’s licence. Again, I’d just emphasize that it’s not unusual to require a commercial class of licence to drive both taxi and a ride-hailing vehicle.

S. Cadieux (Deputy Chair): Fair enough. I understand that. I understand the difference and the purpose in the difference. But we are talking about something that was put in place in terms of regulation and reason in a time that was different and for a service that’s largely different. The majority of drivers of ride-share vehicles will drive occasionally for that purpose — not for eight hours at a time or anything else. They’re going to drive because they’re driving somebody else to work with them on the same route or that sort of thing. They’re not going to be driving 12-hour shifts, likely. Maybe some will. Fair enough.

Just a curiosity. When we’re talking about…. The purpose of, I think, and the focus of the members is certainly to look at: if this is going to operate in British Columbia, we want to make sure that it’s safe. Absolutely, no question. But the data around safety would be important. If there’s data to suggest that it makes a driver so much safer to have a class 4 licence, that would be useful. But what you’re telling me is that, at this point, there isn’t any such data.

K. Kirby: It’s a really good question. One of the things I think that Jeremy pointed earlier is that with regards to our ministry and the regulations, it’s actually not under our purview. However, I’m guessing, under the 700 written, you’re probably going to get something, I’m hoping, from ICBC in concert with the Ministry of Public Safety and Solicitor General, who actually have RoadSafetyBC under their auspices. They may be better equipped to provide you with those sorts of safety licensing numbers.

R. Kahlon: Thank you for your presentation. I apologize. I had to step out for a little radio interview, but I appreciate you taking the time this morning to brief us.

I guess a couple of questions, and perhaps, Steven, it would be addressed to you. You deal with commercial vehi­cles. From your assessment…. Maybe you can’t answer it, but let’s say, for example, a truck driver that drives professionally…. Would that truck driver that drives professionally be a safer driver than somebody who just gets up in a truck and decides to drive the truck?

I mean, it’s kind of a…. It’s a different question. You probably won’t be able to exactly answer it. But the reason why, I assume, with professional standards and vehicle standards, we do that is for safety. I understand that B.C. has a pretty good safety record when it comes to vehicle inspection, and so on and so forth.

I’m hoping you can provide a little bit of context on the importance of having professional drivers, whether it be any field of commercial driving, because this argument that somebody who’s driving just once in a while…. All of a sudden, they’re safer drivers than somebody who drives professionally, all the time. I kind of struggle with that a little bit. That’s one question.

I guess the second question would be…. If we’re exploring this idea of class 4…. Obviously, we’ve had this class 4 system in for taxi drivers for many years, many governments, and obviously safety is a very important piece for everyone, all of the members here.

On top of that, taxi drivers have had to take additional courses, as well, through the Justice Institute — and knowing tourism locations, and so on and so forth. That was brought in. Maybe you can provide a little bit more context of why that was brought in, with your understanding. Perhaps you weren’t around at that time. So those two parts.

[9:45 a.m.]

S. Haywood: The commercial drivers. The question being: are they safer? I think there’s definitely that expectation with the regime in place now. With commercial vehicle safety enforcement, that is something we look at. I don’t want to presuppose what the Solicitor General and ICBC would say. So this would be from my own perspective.

The class 1, class 2, class 3, class 4 — they all have additional steps for a driver to take prior to getting those licences. The intention behind them is that they’re a better-trained driver. They’re highly assessed; they’ve taken more tests. There’s more behind that to make the public feel safe, that somebody operating that commercial class of vehicle, like a taxi, has that extra level of safety that can give the public, I think, a little more satisfaction, knowing that that person is highly trained.

In regards to the taxi driver…. The TaxiHost, through the JIBC — I wasn’t around during the time it was developed. But the intention, again, is having somebody that is…. When you get in a taxicab, you’re that first face for somebody that’s coming into, let’s say, the city, the country, the province. The expectation is that they know their customer service. They know how to deal, for their own safety and the passenger’s safety. They’re able to navigate around the city or the province, knowing their locations.

I believe you also have the JIBC attending here. I think that’s probably a better question for them — to get some more background — as opposed to just my perspective.

R. Kahlon: I understand. I’ve got a follow-up for that. Do we have, roughly, timelines of when these things were brought in — maybe they can be provided later to us; I can’t remember what it’s called — when the tourism piece, the education piece, the Justice Institute piece was brought in? It’s just so that we have an understanding of timelines, of when these things were brought in. In my understanding, it wasn’t that long ago.

Obviously, security and safety was an important piece for us. It’s not something that was there for 40 years, where people can say: “Well, times have changed.” It would be helpful, in the written submission, if you could provide that.

S. Haywood: Yeah, if I may…. The TaxiHost program. My understanding is that it’s updated quite regularly through the JIBC. I believe that it was in the last 20 years that it first developed, but it’s been going through iterations ever since. I believe they’re on the witness list, so that would be a great question to pose to them.

B. Ma (Chair): Thank you. We’ll complete for those who have not yet spoken, and then we’ll go to a second round.

J. Johal: I just have a couple of very quick questions. We’re developing this broad policy here. Is there any jurisdiction you could tell me of in North America or Europe that would be similar to the system that we’re working towards? I’m just curious.

J. Wood: Obviously, the model in British Columbia is unique. It’s unique for taxis and also for the proposed ride-hailing framework. In terms of the board setting boundaries, for providers in most other jurisdictions this is delegated right down to the municipality. In those jurisdictions, you’ll find, by and large, that municipalities are larger. This is the model, historically, that was inherited from the Motor Car­rier Commission when that was decommissioned.

D. Bowman: Just to add to my colleague’s statement, I think you have to also have to take into consideration that we have a provincial insurance structure here. That puts us in a unique category right off the bat. That’s the piece that’s sort of fundamental to the provincial regime: that we don’t have the private insurance here. That’s one of the foundational pieces to what brings us to where we are today, and the decision to go into a provincial regime versus a local regime, as Jeremy spoke to.

In many cities in the world and provinces across Canada and states in the U.S., it’s the purview of the city, through whatever their passenger transportation service regulations are within that city, to make those decisions. British Columbia has taken a different approach.

J. Johal: Okay. The other issue is just in regard to pricing. I think on slide 9 you talked about minimum and maximum instead of a floor and a ceiling. Is that common in other jurisdictions — I’m just curious — in regard to pricing?

[9:50 a.m.]

D. Bowman: Yes. You’ll be familiar with Dr. Hara, and you’ll be talking to Dr. Hara today, I understand. A lot of the recommendations that we’re actually implementing come from the Hara report. Dr. Hara can speak to that.

What that essentially does is respond to consumers’ concerns around exorbitant pricing in the ride-hailing industry. We’ve a lot of examples over the number of years where people have been forced to pay more at certain peak times of day or certain days of the year. So what this does is protect consumers from what we would call gouging in the industry. That’s a big concern for the government.

J. Johal: But does that not hinder the availability, or pool, of drivers? When, let’s say, there’s a concert or a hockey game coming out at Rogers Arena, there’s going to be, probably…. You’re willing to take a ride-sharing company, or use it. You may be paying more, and you’ll know what the pricing is. Does that not reduce the availability of drivers, potentially, if we are capping pricing to a certain degree?

D. Bowman: I think it’s hard to assess at this point whether it would reduce the amount of drivers and people willing to offer this service at that time. I think, if there’s a need, people will be putting themselves out there to service those customers at that time. But I do think that, because we’re in a provincial regime, our first and foremost concerns are safety of the passenger, affordability of the service and ensuring that those things are upheld.

P. Milobar: Can I just get clarification on slide 7, page 7? It deals with the changes to the three-part test. It sounded like it was being conveyed that it’s significant. But as I read it, the considerations…. There’s no change in any of those wordings for the actual three considerations the board would be required to look at. The only changes I can see are that after “may approve,” we’ve added in “in whole or in part,” and instead of “if the board considers that,” we’ve changed it to “after considering whether” in the preamble. But there have been no actual changes to the actual test.

Could you maybe give us a little more insight into how, essentially, updating some wordsmithing in a preamble and not touching any of the three-part test itself are somehow significant changes to what the board will be considering and how they will be considering? Because as a layperson, I read this, and it reads almost the exact same. It’s just how you choose to phrase “after considering whether” or “if the board considers that.” I would suggest that those two phrases sound pretty similar to most laypeople.

J. Wood: It is a matter of interpretation. I can’t recall whether the board is on your witness list or not, but this would be, perhaps, a good question to put to the board.

I think the bolded…. If you looked at the first bullet on that page: “It may approve an application if the board considers that the three-part test is met.” Now, under the second bullet: “The board may approve an application after considering whether the elements of the three-part test are met.”

Again, it’s a matter of interpretation, but it does, I think, as Deborah mentioned, increase the flexibility for the board with respect to applying the three-part test so that it perhaps may approve an application despite one or even more of the elements of the three-part test not being met because of other reasons. That could be one interpretation that the board applies here with this change.

I agree with you. You have to read through it several times, but it ultimately comes down to how the board will apply this change.

B. Ma (Chair): We are running short on time, so we’ll have to keep the remaining questions short.

J. Sturdy: With regard to slide 8…. I’m just looking for some clarification with regard to “Boundaries equal geographic area.” Perhaps I missed this. The board is to have the authority to make determinations respecting geographic areas for TNS licences, yet it has no regulation-making authority respecting boundaries. Can you help me understand that?

J. Wood: Lieutenant-Governor-in-Council has no regulation-making authority with respect to boundaries. The board has exclusive jurisdiction to decide the boundaries for delivery of the services.

[9:55 a.m.]

J. Sturdy: Great. Thanks. Then with regard to the class 4 issue, if I might just jump back to it for a second — this assump­tion that there’s some significant difference between a 4 and a 5. As I understand it, with regard to the actual road test, the sign test, the written test and the practical test…. The only difference in terms of those assessments is that there’s an additional requirement for a class 4 holder to do a pre-trip inspection adequately. Other than that, they’re identical.

J. Wood: Yeah, it’s my understanding that in the road sign test, there’s more detail — more challenging questions, both on the written and…. The road test also tests different elements than the standard, say, class 5 test.

For specifics on that, it’s so long ago when I did mine, I can’t recall the difference between the class 4 and the class 5. I would direct those questions to ICBC. Or ICBC, if they’re providing a written submission, I’m sure will provide you with that distinction.

B. Ma (Chair): All right. It looks like we are complete through our speakers list. I do have one quick question for our presenters.

Do you know what the typical number of hours driven by a commercial driver is per week, month, year, versus a non-commercial driver, or is that a better question for ICBC?

S. Haywood: That’s a tough one, because I don’t believe there’s any gathering of a non-professional driver versus a professional. A class 1 driver, or 2 or 3 — under the national safety code, there’s a certain amount of hours that you can drive in a day, in a week, in a seven- or 14-day period. That’s monitored by the safety certificate holder.

In a day, you’ve got a 16-hour window to drive 13 hours — so within that window. It’s based on the circadian rhythm of how your body reacts from sleep and being awake. But you’ve got 13 hours of driving within that window. So a truck driver can drive 13 hours, and then they must take their time off — their eight- to ten-hour break — and then take another 13 hours.

It’s similar for the taxi industry here in B.C., where we have them following the hours-of-service rules that are in the Motor Vehicle Act regs, division 37, where those same rules apply.

A comparison between the two? I’m not aware of any. From my perspective, without getting a lot of data analysis on regular class 5 drivers comparing them to class 4s or taxis or ambulance or police, I think it may be difficult. That’s not to say it’s not out there. It’s just…. I’m sorry, we don’t have that.

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

It sounds to me like there are quite a few outstanding questions that would be better directed to ICBC. I’m wondering whether the committee would be interested in sending them a direct communication just asking those specific questions and seeing what we get back for our first meeting.

P. Milobar: I’d be happy with that. Also, unless there’s a name that I didn’t recognize attached to PTB, we don’t seem to have them coming on either of the two days. So we might want to have some questions directed to the PTB as well, in the same fashion.

B. Ma (Chair): At the end of the interviews today, let’s gather our thoughts about…. Maybe everyone take some notes about any outstanding questions that you specifically want to ask ICBC and PTB — technical questions, of course.

Thank you so much for joining us today.

Our next presenter is Alex Hemingway from the Canadian Centre for Policy Alternatives.

Hello, Mr. Hemingway. Are you ready to proceed?

A. Hemingway: Whenever you like, yes.

[10:00 a.m.]

B. Ma (Chair): All right. You may have noticed from the first witness testimony meeting — I don’t know what to call them; I guess testimonies, witness hearings — that you will have 25 minutes to present, followed by 20 minutes of questions. I will put a timer on my iPad here. It might turn off partway through. Don’t worry. I’ll turn it back on for you. Please keep your presentation very strictly focused on the four questions that we’re after today. Thank you so much.

CANADIAN CENTRE
FOR POLICY ALTERNATIVES

A. Hemingway: Okay. Thanks for inviting me to speak with you today. I understand that a document I’d circulated to staff has been sent around to you folks and will be sent around electronically as well. You’ll see some of the research references in that document that specifically link through the electronic version.

I’m going to structure my remarks differently. This is an analysis that we published at CCPA back in November. I’m going to structure my remarks around the specific questions that the committee has asked, but much of the same content is covered there.

In particular, I’m going to speak to and focus my remarks on questions 2 and 3 — relating to the supply of passenger-directed vehicles and relating to the price-and-fare regime. I’ll speak briefly to question 4 as well. Just to be clear, I’m focusing my remarks with the urban centres in mind, like Metro Vancouver — I’m from Prince George, so I’m attuned to the fact that things may look differently in smaller centres — just to give that context.

Finally, just the last piece of context that I would add is that when we’re thinking about urban transportation problems, as we are here today, the fundamental issues are not enough public transportation and not enough housing near where people work and want to be. I can’t talk about passenger-directed vehicles without mentioning that, because of the enormous social costs that come with the low-density, car-oriented transportation systems and development model that we have.

Setting that aside, I’m going to speak, first, to the issue of supply of passenger-directed vehicles. As we think about opening up the ride-hailing sector, one possibility that I’m sure is being considered is what we’ve seen in other jurisdictions, which is simply opening up this market, without caps, to companies like Uber and Lyft and essentially adding unlimited supply — whatever the market will bear. I think it’s important to keep in mind that the quite unambiguous evidence from other jurisdictions is that opening the floodgates in this way puts more cars on the road and, more specifically, increases total vehicle miles travelled in the areas served.

Research that you may have seen — I hope you’ll have seen — out of the U.S. shows that for each private personal vehicle mile removed from the road by ride-hailing, 2.8 additional ride-hailing miles on the road are added. Just to give one — a little bit more concrete — example, if you look at the situation in Seattle, back in 2012, taxis were providing a little over five million rides per year. The projection for 2018 was closer to the range of 31 million provided by the ride-hailing and taxis combined — a massive increase.

In terms of the causes of the increases in vehicle miles travelled, there’s a range of them — mode-switching away from public transit and from active mobility; also, simply, users adding additional trips that they wouldn’t have otherwise taken; and issues around deadheading of ride-hailing vehicles as well.

[10:05 a.m.]

The reason I emphasize this point of added vehicles miles travelled is because there are extremely large social costs associated with this. Traffic congestion is the one that typically comes to mind first — and the associated economic costs in time lost. Of course, there’s also air pollution and the health costs associated with that, greenhouse gas emissions, noise pollution, road construction and maintenance costs, crashes, injuries and deaths. There’s specific research out of the U.S. linking the increase in ride-hailing vehicles to an increase in traffic deaths. In terms of vehicle miles added and that increase in those social costs, that’s very clear.

As I’m sure you’ll hear or may have already discussed, the evidence around the relationship with transit ridership, in particular, is a little bit more mixed, but the balance of it is that actually, these services are pulling people away from transit ridership, in particular in areas that are well served by transit. Certainly, the ills of an auto-centric transportation system can’t be pinned entirely on ride-hailing. Driving our own private vehicles accounts for the vast majority of cars on the road, but the evidence from other jurisdictions is clear that the explosion of ride-hailing is making these problems worse and not better.

For that reason, I would suggest to you that large increases in the supply of passenger-directed vehicles shouldn’t be considered. Frankly, we should learn from other jurisdictions that have begun to see the consequences of unlimited supply and are struggling to contain them. Jurisdictions like New York, as I’m sure you’ll have heard, are notably moving towards a cap on the number of ride-hailing vehicles to deal with some of these problems.

In terms of supply, I would suggest that there is a case for a small increase to meet peak demand problems faced under the current system, but it should be kept very modest. Otherwise, we’ll simply be imposing large social costs, large externalities, on the rest of society and perpetuating the more fundamental problem of our auto-centric transportation system in our urban centres.

Moving to the issue of prices and fares, the main aspect I’d like to comment on, as it relates to prices and fares, is how they connect to wages. Put simply, it’s important that a fare regime be in place that allows for a decent living wage to flow to drivers of passenger-directed vehicles. Here I emphasize drivers. I notice the question is framed around returns to the business, but thinking about wages and drivers, I think, is crucial to thinking about a fare regime. The problem with this is that ride-hailing companies don’t pay well, nor do taxi shift drivers get paid very well. Shift drivers who don’t own their own licence make up the majority of the driver market.

I’m just going to briefly turn to each of those. Companies like Uber typically, as you’ll be aware, take about 20 to 25 percent in a commission and, on top of that, booking fees, some other fees. Vehicle maintenance costs and gas costs are also borne by drivers. In terms of the taxi side of the equation, shift drivers who don’t own their own licence are an issue that’s often overlooked, at least on the public side — paying lease fees to the owners of scarce taxi licences, on the order of $110 to $120 per shift.

When you aggregate all this, the available studies suggest that in both the taxi and ride-hailing cases, typical take-home pay is hovering around the minimum wage. In the taxi case — I’m talking about shift drivers here — it’s maybe a little below, maybe a little above, depending on the study and the estimate that you use. What’s happening here, of course, is that, in the taxi case, through the control of scarce licences, and in the ride-hailing case, through control of the app dispatch system, these companies are able to appropriate a large portion of the fares, leaving the drivers in the situation that I’ve described.

In terms of prices and fares, as I’ve suggested, I think it’s crucial that these be set to allow a living wage. That’s a necessary condition, but it’s not a sufficient condition, to ensure that decent wages pass through to drivers. That actually requires addressing the flawed ownership model in this industry. It’s for that reason that, in the analysis we’ve published, we’ve proposed an alternative model to make that work.

[10:10 a.m.]

Specifically, we suggest moving to a cooperative or not-for-profit model, such that that surplus that’s typically appropriated by Uber — or by licence owners, in the taxi case — can be used to ensure decent wages in this sector. This is, in terms of the cooperative or not-for-profit model, something that’s being discussed, planned and attempted in other jurisdictions. Austin, Texas; London, England; and Montreal are a few examples. But if we’re going to pass decent, regulated fares through as wages to drivers, these efforts to have a different ownership model face a key barrier — that is, the quite aggressive, monopoly-seeking business models of the large ride-hailing firms.

This is a sector, as I hope you’ll be aware, that is characterized by a very high degree of market concentration. That’s, in part, because of the nature of these services. There’s a winner-take-all dynamic that results from what economists call network efforts. We could talk about that more if you’d like. This is similar to platform monopolies we see popping up in other parts of the economy — Facebook, Amazon, Google, and so on. So there’s a natural tendency towards monopoly there. You also have more specific business practices that are from companies like Uber and Lyft that are premised on establishing market power in any given jurisdiction.

I’ll just briefly mention putting forward this possibility of a cooperative or not-for-profit approach — a very concrete, specific example. The case of Austin, Texas is very instructive to how regulations influence the possibility of this alternative approach.

In 2016 in Austin, residents voted to support new regulatory standards that Uber and Lyft didn’t want to comply with and chose not to. As a result, they left Austin. Within weeks, a community-minded group from the local tech sector created a non-profit called RideAustin. They got it off the ground just within a month or two. It soon gained over 50 percent market share. Drivers appreciated being paid more, treated with respect by RideAustin. However, a year later the state government overturned those local regulations. Uber and Lyft came roaring back into the city, used their deep pockets and deep discounts to re-establish their market power, and RideAustin’s market share dropped off.

I mention this because there are two lessons here. One is that a viable non-profit alternative, compatible with decent wages, can certainly be built in B.C. But that actually requires not allowing these large multinational, aggressive players like Uber and Lyft to come in and torpedo those efforts. That’s what we’ve seen in the Austin case.

On this issue, I should also mention there are actually right now serious talks underway in B.C. among a number of folks looking at starting a ride-hailing co-op. So there is actually an appetite to do this sort of thing. I’m going to be speaking with that group tomorrow, in fact. And as you may know, the Vancouver city council recently directed its staff to look at this possibility of a co-op or non-profit option.

To sum up my key points that I want to leave you with, any increase in the supply of passenger-directed vehicles should be modest, in recognition of the very large social costs associated with the well-documented increase in vehicle miles travelled that comes with ride-hailing. A corollary of that — just going to question 4, briefly — in terms of the licensing standards: sticking with class 4 licences would seem to make sense from a safety perspective. Lowering standards to class 5 would only make sense if you’re planning to flood the market with these vehicles, which shouldn’t be done.

The second main point. As I’ve just been speaking to, increased supply of passenger-directed vehicles should be allocated only to cooperative or not-for-profit providers so that the surplus generated in this type of market can be shared equitably — and, in particular, in the form of decent wages passed through from decent fares.

[10:15 a.m.]

I would just close by saying that B.C. is in a really unique position here to do something different on this file. We haven’t yet let the ride-hailing genie out of the bottle. We could be a model for other cities around the world. But as the Austin case shows, that really does hinge, crucially, on the regulatory environment, given the nature of this sector characterized by market power and, also, particular aggressive business practices.

I’ll leave it there.

B. Ma (Chair): Wonderful. Thank you so much. We’ve got lots of time for questions, and we’ll begin with Mr. Kahlon.

R. Kahlon: Thank you for your presentation. That’s interesting. The Austin example is an interesting example.

You talked about pricing, and you talked about how they came in and they were…. Have you heard the term “predatory pricing”? Can you explain what that means?

A. Hemingway: Sure. Well, one of the interesting characteristics of a company like Uber is that over the course of its time in business, it has operated at a loss almost the entire time. Part of the purpose of that is to execute strategies of predatory pricing, where you come into a market, operate at a loss and undercut competitors to help establish a dominant market position that you can later make use of.

R. Kahlon: Just to follow up, on the Austin example, Austin doesn’t have quite the same transit infrastructure as, let’s say, Metro Vancouver does. So was there some connection between the supply of cars with transit, from your understanding?

A. Hemingway: The main reason I give the Austin example is because I think when first hearing the idea of a co-op or a non-profit model, it sounds a little far-fetched to folks. Why hasn’t this happened in more places? That’s really hinging on this predatory pricing and other strategies that I mentioned. I don’t mention Austin so much because of the parallels with a city like Vancouver but because of the…. It’s an exception that proves the rule, because you had this brief reprieve from the large players set by regulation — that we saw something very different emerge very quickly.

R. Singh: Thank you, Mr. Hemingway, for your research. You talk about putting a cap on how many cars are coming and also about the wages of the drivers. Do you think that would help, if we limit the cars? That will affect how much wages…. Is it correlated, those things?

A. Hemingway: Well, it seems to be less than you might think when you compare the wages between the ride-hailing and taxi sectors. I think mostly it will affect the value of the existing licences, which is certainly relevant to the well-being of a number of folks. But I’ve emphasized the shift drivers who don’t own their licences here. In that case, certainly the supply of cars would matter. When you add a whole number of new folks to the labour market, that’s going to put some downward pressure on wages. But one thing that was surprising and interesting to me was to see how difficult the situation was already for shift drivers.

S. Cadieux (Deputy Chair): The co-op model — I’m familiar with it. I’ve read up on Austin. It’s interesting. But anything can have success when it has no competition. The taxis have had success because there has not been competition, yet the taxi industry, as you point out, has not ensured a living wage. Part of that, I’m sure some of the taxis might argue, would be because there are fare restrictions imposed by government in an effort to achieve affordability for riders. Government has said again today, through the ministry, that affordability is a major concern of the ministry in terms of a go-forward.

Arguably if, with the extremely limited transportation option we have, given that we don’t have the opportunity for ride-share…. From a taxi perspective, we have a limited supply, and we know that we have excess demand a whole lot of the time and that that varies from jurisdiction to jurisdiction, as well, based on how much transit there is.

Certainly, in Surrey, one is entirely dependent on one’s car to get around, and there is very little in the way of taxi service available. Yet even then, we’re finding that taxi drivers could have a challenge in making a living wage.

[10:20 a.m.]

Is there anywhere in the world that you can point to where they have a system that guarantees a living wage to drivers of taxis and/or whatever ride-sharing might be available in that jurisdiction?

A. Hemingway: I think that goes to two things. I’m not going to speak to a specific jurisdiction. But the two main issues there are…. The business model is going to be important to the wage, and the regulatory structure is going to be important to the wage.

S. Cadieux (Deputy Chair): I understand that. That’s not what I asked. What I asked is: given that you are making a suggestion in terms of a direction to ensure a better wage — and there’s no argument; we want people to make good wages — can you point to somewhere that has gotten it right? Or is this all hypothetical?

A. Hemingway: Well, the Austin example is one where you did see higher wages. I haven’t looked at the level of the living wage in Austin. So I can’t speak in that technical sense.

S. Cadieux (Deputy Chair): Can you, in the Austin example, point to data that suggests that there was an adequate supply during that period of time and that pricing for consumers was maintained at a low-enough level that it was “affordable”?

A. Hemingway: Well, there’s a certain tension in the two aspects of the presentation that I’ve given that I want to just make very clear. The first point is relating to the social costs that come with adding a large amount of vehicle supply. I would suggest that, from that point of view, adding as much supply as demand will take up is not an appropriate approach. We’ve seen the cost of that in other jurisdictions, so I wouldn’t want to go down that road.

I’m operating under the premise that we’re going to continue operating in a supply-constrained environment. I think that makes sense. So within that environment, how do you get decent wages for drivers? That’s the dilemma that I’ve posed: that you don’t get that under either of the typical models that are proposed.

P. Milobar: I think you’ve touched on part of what my question was going to be around. You’re not advocating for unlimited supply even if it’s done as a non-profit model. At its core, you’re saying that regardless of the taxi industry, there should be TNS options. However, they should be a non-profit model.

Can you explain, at its core…? What I’m hearing you say is you’re less concerned about the taxi industry, and you’re less concerned about regulatory hurdles with ride-hailing, ride-sharing options. It’s just that you believe that it should not be a company running it. It should be a non-profit model, and that should be who solely is allowed to operate.

A. Hemingway: Correct. Specifically, going to the issue of…. If we’re concerned about the wages of folks in this sector, that’s an appropriate response.

P. Milobar: Other than the social service agencies of the world, can you point to any other model within our current economic framework that operates on the non-profit model, as opposed to enabling a for-profit? You would still have a for-profit taxi service competing with a non-profit service, so can you think of any significant public access points that operate that way currently in B.C.?

A. Hemingway: Sure. Just in terms of the existence of thousands of cooperatives in B.C. and across Canada and around the world, that’s a model that coexists with market players in various sectors. It’s a very, very common model, unless I’ve misunderstood.

P. Milobar: No. I can think of credit unions, and there’s the occasional, especially on the Island, co-op gas station. But I don’t see it as prevalent as maybe you’re…. Maybe I’m missing something.

A. Hemingway: No. I don’t mean to suggest it’s a majority, but there are thousands of them. We could get into some of the regulatory reasons why more of them don’t exist, but it’s sort of a separate issue.

[10:25 a.m.]

A. Olsen: Just to that point, I think that the Peninsula Co-op, for example, would suggest that they compete very, very well with others in the marketplace.

I just have a question with respect to the number. In the early part of your presentation, you talked about the number of taxi trips and then, following up with that, the number of passenger-directed trips in ride-hailing from…. I think the numbers were roughly five million to 31 million. The one number that isn’t part of that is potentially the number of single-occupant vehicles that are potentially decreasing to make that a full picture.

I just felt, when you were highlighting this, that you were highlighting part of the picture and that there’s an important piece that’s missing there. So maybe you can fill in that blank.

A. Hemingway: Sure. I went over a related number but very quickly, which is U.S.-based research published in the fall that took account of private single-occupancy vehicles being pulled off the road, and the finding there was that for each of those pulled off the road, there were an additional 2.8 trips. In terms of trips, I’m talking about here…. For each trip reduced through that mode, 2.8 trips were added in the form of ride-hailing.

A. Olsen: Sorry. For every single trip, three are added, essentially.

A. Hemingway: Reduced. Every single-occupancy trip reduced, yeah, it’s just about three added. And that’s coming from a range of sources. Some of it would be pulling from other modes, like transit, walking, cycling. But a lot of it is also just adding new trips that people wouldn’t have otherwise taken if that ride-hailing service didn’t exist. That’s one of the big mechanisms of increasing total vehicle miles when ride-hailing comes on line.

J. Johal: I just have a very simple question. Thank you for your presentation. Very interesting. You were talking about the cooperative model. I remember the last set of hearings that we did. We heard from the mayor of Enderby and some other smaller communities. What is the chance a cooperative could be set up for a very small community that also needs ride-hailing simply because they don’t have the transit services?

I do understand bigger cities like Vancouver, and our conversation ends up usually being urban-centric, but ride-hailing…. You mentioned you’re from Prince George. I’m from Williams Lake. Those communities also want ride-hailing. One would argue that these bigger companies, along with local players — but certainly these bigger companies — would have the clout and size to really help these smaller communities because the transit service is very limited. What would you say to that argument?

A. Hemingway: I think there’s something there. When you think of the Prince George case, there are very limited transit options, and the whole design of the city is such that it makes it very difficult not to have a car. But it’s also quite easy to get a taxi in Prince George compared to Metro Vancouver. So that’s one part of the equation to keep in mind.

In terms of whether a co-op model could work there…. I think one of the big advantages of getting a co-op off the ground, say, in some of the big urban centres like Metro Vancouver is once you have that up and running, moving the app over to another community is…. The friction of making that move is much, much less. So certainly it would be possible for the large firms to service smaller communities like that.

I would suggest that they’d be even better served by a co-op model because of the advantages I’ve been discussing around wages.

B. Ma (Chair): Thank you so much. I have some questions as well, if there are no other committee members who want to get on the list. All right.

The Austin model. You mentioned the regulatory framework that encouraged cooperatives to flourish. What were those regulatory frameworks?

A. Hemingway: Well, it was a bit idiosyncratic. The main tipping point seemed to be related to the criminal background checks for drivers. There was a regulation added that would require finger-printing with those criminal record checks, and that’s the piece, as I understand it, that Uber and Lyft didn’t want to comply with. So there was some contention around this.

[10:30 a.m.]

There ended up being a referendum on the issue in the city, and people supported that regulation. Then it was later overturned by the state government, and that’s when the companies came back in.

B. Ma (Chair): Do you know why they brought that regulation in?

A. Hemingway: I don’t, actually. I don’t know the whole backstory there.

B. Ma (Chair): During your presentation, it was…. The concept of the co-op model was very interesting for me to hear about, especially in the way that you described its potential relationship with wages. While it may be…. While I suppose there are various ways that co-op models can be encouraged, I don’t know how likely it is that this committee would recommend that we only restrict to co-op models. Having said that, the fare limits and the connection to wages seem very poignant.

The upper limits of fares tend to be set, from my understanding, to prevent consumers from being taken advantage of. It would be interesting…. It almost sounds as though one way to go forward might be to set the lower limits of fares in relation to fare wages for drivers and such. If there are profits involved in the model, then your minimum fare for that company might have to be higher than the minimum fare for a not-for-profit model, which may actually introduce some of that competitiveness that allows for not-for-profits to compete fare-wise with for-profit companies.

Have you heard of anything like this being considered in any industry? I’m wondering if you have any thoughts on that kind of per-company concept almost.

I guess, actually…. I just realized that one of the examples we might be able to give is our child care program. Our child care program is a little like that. Every company enters a contract separately with government. They open up their books, and they get to set rates according to their plan.

I’m answering my own question. I’m sorry. I’m going to let you talk.

A. Hemingway: Well, I mean, just to briefly add…. Of course, we have the minimum wage. It’s a regulation, too, that tends not to apply in this area, which is, I think, a context to keep in mind. We wish to enforce the spirit of the minimum wage. Finding some way to do that in a particular industry or regulatory context makes sense to me.

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

All right. Thank you so much, Mr. Hemingway. I really appreciate you coming out here today.

We are moving on to our next presentation from Mr. Benn Proctor. He will be joining us via Skype. He’ll be joining us in just two minutes. So if committee members want to relax a little bit for 120 seconds.

It’s been recommended that I call a recess. So I’m going to call a recess for just a few minutes. We will reconvene the meeting in probably a couple of minutes.

The committee recessed from 10:33 a.m. to 10:36 a.m.

[B. Ma in the chair.]

B. Ma (Chair): We have with us Mr. Benn Proctor, over Skype.

Mr. Proctor, you are our third presentation of the day. We will be giving you 25 minutes to make your presentation. We ask that you keep your remarks strictly in response to the four questions that we have put before you. It helps us if you identify which question you’re speaking to when you are giving your presentation. Following your presentation, we will have 20 minutes of questions. So please, Mr. Proctor, proceed.

BENN PROCTOR

B. Proctor: Great. Thank you. I’ll just check. Do you guys have copies of the presentation?

B. Ma (Chair): We’re being told that we have them on our iPads.

B. Proctor: I’ll say thank you to the Crown Corporations Committee for having me on. I was a big fan of your previous report. Additionally, I wanted to say that I’m in my ride-hailing situation room here, so I’ve got my headset on. I’m looking forward to talking to you.

Slide 2 is just a quick reshuffling of the questions that I’ve been asked to address. What I did was…. The first question I wanted to address was the public necessity convenience test. I kind of reordered them and moved the discussion of boundaries last. I basically reshuffled them in order of importance for people to follow along.

What I’m going to do is try to answer these questions as best as I can. I’m going to talk about recommendations for the taxi industry and recommendations for ride-hailing. These are kind of interchangeable, and they’re inextricably linked. When we think about setting more permissive regulations in ride-hailing versus taxis, that’s going to affect licence values, etc.

I’m also going to come up with just first-best recommendations, second best, third best. We might want to consider adopting third-best recommendations just out of fairness, maybe, for existing taxi owners who have really valuable licences, and they stand to lose a lot. That’s a real political question. The analysis is relatively straightforward. What’s not straightforward is the politics of it.

I’ve got slide 4 open right now. That’s taxi prices in Vancouver, the price of a taxi licence. One of the most important things to understand is that even before Uber, ride-hailing, before any of that was created, taxi regulation in B.C. was kind of abominable. It was just really bad. The figure that I point to is the licence value. It’s about $500,000 in 2009, so this is before Uber started operating across North America.

B. Ma (Chair): Sorry, Benn. Can I stop you just for a moment? I see members struggling to get your presentation on line, and I want to be fair to your presentation as well. I’m just going to pause you there.

B. Proctor: Stephanie mentioned that an alternative could be to display the presentation on the screen. I just talk, and you don’t get to see my face. I’m okay with that. I’d really like people to see the presentation.

[10:40 a.m.]

B. Ma (Chair): I think that would probably be great. Not everybody has their…. Yes, can you please do that for us? I’m sorry. Not everybody has their iPad with them, and we’re not all….

We’ll continue to give you your time. In fairness, why don’t we restart your time there as well. I apologize.

B. Proctor: Okay, thank you. Can you see the presentation on the screen?

B. Ma (Chair): No, we still see you.

B. Proctor: Stephanie was going to be able to manage that. Is she there? Can she hear me? Sorry for these technical difficulties.

B. Ma (Chair): No, not at all. Thank you so much for your patience.

S. Raymond: I hope this is up to date, Benn.

B. Ma (Chair): Alternatively, you could email it to all the members as well.

S. Raymond: Yeah, I can do that right now.

B. Ma (Chair): It’s up now. All right. Great.

B. Proctor: Okay, Thank you. Stephanie, if you could flip to slide 4.

The first couple of slides were just kind of introduction. It’s the one with a bar chart of taxi prices. Thanks, everyone, for accommodating that.

Jumping right back in, what I wanted to say was that the number one idea is that taxi regulation in B.C. was bad before ride-hailing. I think everyone has kind of come to acknowledge that this is a problem that needs to be fixed, and that’s largely because of people’s experience with ride-hailing. But we were getting taxi regulation wrong even before ride-hailing was invented.

The number one value that I flag as the worst indicator of a taxi regulation problem is licence values. You see in 2009, they were already estimated to be about half a million dollars in Vancouver. When I looked at this in 2013, I had about an $800,000 figure for taxi licences. The problem with licence values is because….

The question around why a piece of paper might be worth $500,000 or $800,000…. It basically is an indication that taxi fares are set too high, that there are not enough vehicles on the road, and the passenger is being poorly served. The drivers do not benefit either from this situation, because they have to pay really high lease fares to use the vehicle. I’ve got an affidavit from Hara, who was the expert witness who wrote the modernization report. He acknowledges this — that it’s licence holders who receive the excess value of licence rights and bear 100 percent of the loss from any decline.

Those are sort of some symptoms of the high price environment. So why is a piece of paper worth that much? It’s because they can lease it out to drivers for a lot of money. These licences are basically a cash cow.

What I’ve got is…. You can think about how to price a taxi licence. It’s kind of similar to a bond. The owner of the taxi licence makes a bunch of estimates about how much they can rent it out for in the future. When I looked at it, it was around $48,000 a year, just for the permission to drive, the licence. So they have a stream of payments that they can count on, but they’ve got to make guesses about the future.

You may have heard a taxi company say: “You know, licence values have already cratered.” What that is, is basically people are making assumptions about whether ride-hailing will be allowed, whether that will affect my licence values. And how about boundary protections? Are they going to change? Are the Port Coquitlam taxis going to be allowed to pick up in my neighbourhood?

That’s kind of what’s going on. That’s how to understand pricing. But the key thing is, especially for a licence that really has been given away to the existing companies, you don’t want them to have this supernormal value where you can sell them on the taxi market.

[10:45 a.m.]

New York is a different example. They auction medallions off. So at least the public purse was capturing the revenue of restricted supply. This situation has been like a windfall benefit to taxicab owners and companies.

If you could flip to slide 7. These are just hypothetical numbers, but the key thing to understand is just that the benefits of the bad taxi regulations are really concentrated. The costs are spread out all across people living in B.C. It’s just to show that the costs are much higher than the benefits, but because the benefits are concentrated among a few….

If we’re being honest, it’s elite people in our society, the people who own really valuable taxi permits, lobbyists who knock on doors, lawyers who get a lot of business through the Passenger Transportation Board hearings, consultants, expert consultants sort of defending a system that, in my view, is kind of indefensible. So it’s the passenger who really suffers — Vancouverites, drivers. There are less jobs, and there are also environmental and public safety consequences, but those are spread so thinly that we arrive at a situation where the status quo is bad regulation.

If you flip to slide 8 and the question of how we arrived there, who’s to blame…. I’m saying that…. Initially, I had three people. I feel like the incumbent taxi companies have really misled the public, misled politicians, regulators. At some point, it’s not surprising, because they’re private companies and they’re after their bottom line.

The other group that falls into blame…. Forgive me, but it’s, historically, politicians in B.C. They’ve bought the line — hook, line and sinker. It’s both provincial MLAs and municipal politicians who have sort of been persuaded by taxi companies to allow the system to persist.

Originally, I thought: do regulators deserve some of the blame? And the PTB has made a number of bad decisions, historically. What I will say is that the PTB is appointed by politicians. They’re following acts and legislation that were written for them by politicians. Their hands have effectively been tied.

If we could move to slide 9, thinking about political interests here. I just want to give this background to sort of…. You guys understand this way better than me, but if you think of the hypothetical politician on this file…. Maybe it’s 2009, and they want to get elected so their party can win some more seats and they can influence policy for the good of British Columbians. I think that’s an honourable job. I think being a politician is one of the toughest jobs in the world and one of the most honourable ones. So that’s what might inform a decision there.

On the issue of taxi regulation, a politician has to make a tough choice. On the doorstep, taxi rights haven’t been an issue in the media. This is the past. That’s, again, these dispersed costs that are spread out among the public.

Meanwhile, the taxi companies are really reliable political supporters, donors. They always contribute to fundraisers, so they can help fund political campaigns. Also, the industry can really pull the vote. They’re organized. We hear from them all the time. I know they’re an important stakeholder group. You can imagine a 2009 politician sort of saying: “Well, maybe there’s no issue here. Let’s stick with the status quo.” It’s no fault of anyone. It’s just the incentives in place in the system.

If we move to slide 10, what’s changed now is that people acknowledge the benefits of ride-hailing. Vancouverites have been to other jurisdictions that allow it. They know Vancouver is one of the last cities in the world to really allow this system, so they know they’re missing out on something. I want to just point out that even the threat of ride-hailing has been really good for the market. This is the benefit of competition.

Before ride-hailing — this is that 2012 world — new taxi licences were rarely granted. This is even to incumbents. They weren’t granted to new parties for sure, and Yellow Cab had to work to get their licences. As a result, Metro Vancouver had some of the fewest, lowest taxis per capita in the world.

Meanwhile, fare increases were happening like clockwork. It was 9 percent in 2001. They raised it twice in 2005. Without a new supply of taxi licences, these cash cows, they said: “Well, let’s keep raising the price.” That is the before-ride-hailing world.

[10:50 a.m.]

Then if we jump to after 2013, all of a sudden, taxi companies saw this threat of Uber coming down the road, and they said: “Hey, can we provide a little better service for the public? Otherwise, we’re going to get burned here.” Instantly, you see a major increase in the number of vehicles. Now, after the Hara modernization, I think there might be around 2,400 vehicles. It’s a 52 percent increase since 2013. That has never happened before. So that’s the good-news story.

Fare increases have been really limited. There’s only one. So now you look at Vancouver taxi fares and you say: “Okay. They’re no longer maybe the worst in the world. They’ve gotten better.” I just want to point out that just the fact that ride-hailing has existed on the threshold has gotten all these good outcomes for consumers.

Premise 1 was that licence values are a real sign that taxi regulation is bad. Premise 2 is that taxis and ride-hailing do still need regulation. Government has got to act. I’m not a no-regulation person here. It’s just got to be a lighter-touch regulation.

A couple things to keep in mind as I get into your questions. We know there are some administration costs. Some fare regulation is going to be needed. You’re going to have to have some vehicle safety inspections, driver background checks, etc. Those administrative costs: regulated parties have to pay for them. The taxi cab companies and transportation network companies should fund those costs, not the public.

We also want to ensure that disabled passengers have kind of a comparable standard of service, and we may need some special mechanisms in place for that. I know the Passenger Transportation Act has talked about the amendments, setting aside some fees to support the service. Those are good things to consider.

Keep in mind that I’m not going to let perfect be the enemy of the good. I’m going to list a bunch of recommendations. This question around the public convenience and necessity test. My first best solution is: you don’t need one.

The Passenger Transportation Act…. This is for taxis.

I’m on slide 12, Stephanie.

The fit and proper. Is there a public need? Does it promote sound economic conditions? You just don’t need that. You never needed that.

Evidence, even before Uber and ride-hailing, from case studies in Minneapolis…. When they eliminated this test, the number of taxi cabs doubled in size. In Dublin, when they eliminated it, it also grew by 50 percent — the number of vehicles on the road. So we know that that test is not necessary. At the same point, it’s the thing that protects licence values.

A second-best recommendation for the future might be to use a price mechanism such as an annual lease on taxis. These are for new supply, so the existing folks get grandfathered. I’ve got, tongue-in-cheek, maybe the 11th best solution. I don’t know where it actually ranks.

Maybe keep the P-and-C test and don’t allow new entry in taxicab markets. That has consequences for the public, but in a ride-hailing world, with that being allowed, there would at least be some competition. For ride-hailing, my recommendation, again: really avoid the public convenience and necessity test. It’s fallen out of favour around the world. But you can consider a couple of other recommendations.

You could also use a price mechanism to raise a little extra revenue, charging transportation network services companies a little more and even per-trip charges to kind of raise some revenue and apply it to whatever you’d like. Maybe it’s transit. Or you could use a price mechanism in a different way. I think I heard just a bit of Alex’s presentation. How about a minimum wage for ride-hailing drivers? There’s an example of that in New York. I’ll talk about this a little bit.

I just want to hammer home, on slide 13, why the public convenience test is so bad. First of all, the justification for it, even before the advent of ride-hailing, was really weak. This was a case of regulatory capture. When I saw that it was kept in the amendments to the Passenger Transportation Act, that was my number one concern, especially if you apply it to ride-hailing.

I want to point out that there’s a real knowledge problem. Even the PTB acting in the best faith possible can’t know the right number of taxis for municipalities across the province. You know, how can five board members know how many taxis should be in Vancouver or Castlegar or Smithers? It just doesn’t make sense. That’s why you don’t need it.

Really, you create some incentives for incumbent firms to just mislead politicians. They say: “Well, we can’t allow any competitor to enter the market. Economic conditions just aren’t sound enough.” What a great business model that is — no competition. The good news, though, is that it’s a really simple solution. You could just allow freer entry on this.

[10:55 a.m.]

I want to point out, if we could go to slide 14, that incumbents have always ruled under this public convenience and necessity test. On the left-hand side, I’ve got applications that have been rejected.

Ripe Rides in 2017 had an application to add about 10 percent of taxi licences in Metro Vancouver. This was rejected by the PTB for a number of reasons. They said it didn’t meet public need, wouldn’t support economic conditions, etc. You would have to have your head in the sand to come up with that finding, given the demand for app-based services, etc. They were denied that.

Shortly, a year later, Hara modernization comes along and says we should increase taxi licences for existing firms by 15 percent. So there’s really a favouritism of existing firms in this place that’s probably not justified.

Another one I’ve got is Pacific Coast Co-Op Taxi. These are drivers who tried to establish a taxi co-op. They applied for 99 part-time vehicles. I don’t know enough about their makeup, but I do know they were pretty upset with the high lease fares that they were paying to taxicab companies.

They asked: “Can we operate our own taxi on Friday and Saturday nights?” Then they, of course, were rejected by the PTB. Instead, the PTB allowed 137 part-time taxis from existing firms to operate downtown. So you just have this standard process of favouring incumbent firms under this process.

Then slide 15, which is knowledge problem aside, you also have…. The PTB can’t figure it out. It’s a hard job. But you also have this issue of political capture.

I’ve got a letter from former mayor Gregor Robertson to the PTB. He says — this was referring to suburban taxis — we can’t allow them to operate within Vancouver boundaries. It would be destructive to customer service quality, stability of our established firms, be a wholesale reorganization of the taxi industry with unpredictable consequences.

I personally don’t buy that argument. I see that as a politician sort of favouring a reliable stakeholder group.

In 2015, you actually had the city of Vancouver recommend that the suburban taxis be allowed to pick up. There was kind of an emergency meeting called, and the transportation committee of the city of Vancouver quickly ruled that that shouldn’t be allowed. They overturned the recommendations of their own staff report. So you also have this political issue.

So my second-best solution. My first-best solution, if we move to slide 16, is to get rid of this public convenience and necessity test. We don’t need it. But we may…. In fact, I’ve got this PTB decision from 2017.

The value of licences is debatable now; $800,000 might be a high estimate. That was the estimate the last time I looked closely at it. So a decision to issue 175 taxis to the incumbent, at a valuation of $800,000, is a windfall transfer. We’re talking about hundreds of millions of dollars being given to private companies through an arbitrary, untransparent process. And the fee to apply for this was like $10,000.

Personally, taxpayers should be extremely offended by this. You think about the rightful indignation about some of the reported misspending at the Clerk’s office in the Speaker’s report. I want to just say you could buy a lot of wood chippers with that amount of money that has been sort of handed off to private taxi companies. There really needs to be a lot better oversight over this.

One thing to do would be to use a price mechanism. You could set an annual lease price at a reasonable rate. I estimated taxi companies in Vancouver could lease it out annually for about $48,000. You could maybe set it at $20,000. That would instantly lower the lease rate for the Vancouver taxi companies, but it would allow drivers to pick and choose, and it would allow supply to increase naturally any time a driver wanted to lease from the PTB instead.

What about option 11? That’s the one where we just keep the public convenience. It’s not going to be the worst thing in the world for passengers if ride-hailing is allowed. You might want to keep that just to protect the incumbent firms.

Slide 17. This is just kind of a reality check, that: “Hey, maybe ride-hailing’s not the greatest thing ever.” There’s definitely evidence of increasing congestion costs. These surge prices happen when roads are busiest. You’ve got drivers circling around waiting for their next trip, taking up a parking spot, more cars on the road. There’s evidence of more accidents and fatalities.

[11:00 a.m.]

There’s also a little bit of evidence of them pulling people away from public transit. We generally think people riding public transit is a good thing. It happened in New York, in D.C. One of the things I would caution, though, is that public transit has been really performing poorly there. So there’s something happening on the public transit quality side. Additionally, if people are choosing a different mode of transport, it’s because that mode of transport is better for them. People opting to ride-hail instead of taking transit, because of convenience or something, is generally a good thing.

The other thing is, and Alex talked about this, ride-hailing is a really low-wage job. So is taxi driving. But some evidence there.

A second-best solution around ride-hailing supply…. Maybe you could just do a revenue raiser. For one thing, you could charge a bigger fee for TNS companies and have a fairly high per trip charge, maybe 50 cents per trip, and you could put that towards funding some public good. At least the public is now capturing some of the revenue of this supply restriction through a price mechanism.

It would sort of…. I’ve got “a level playing field” in brackets. This is slide 18, just if everyone is following along. It would make it higher fares for everyone. Consumers lose out, but taxicabs get a little bit of protection through higher fares charged by ride-hailing companies. That’s one option. Again, I think it’s a second-best solution.

Another one would be…. What about just a higher minimum wage for ride-hailing drivers? New York has proposed this. Traditionally, taxis have always been a contractor relationship. It was really hard to observe how hard the driver was working. So what they would do is they would rent the vehicle, and then the driver would be incentivized to stay busy. Otherwise, it was kind of hard to check if they were taking long breaks or lunch breaks, etc.

Now, with this kind of technology, these app-based formats, you can really just sort of say: “Go pick up this person.” Everything is distributed electronically. There’s a way to maybe institute a minimum wage here — maybe $17 for ride-hailing drivers. This would actually limit the number of cars on the road, and it would incentivize Uber and Lyft to use their drivers more efficiently, not to have a bunch of people on there.

Passengers, again, would be hurt by this second-best alternative. They’d have to pay more. They’d have to wait longer for their ride-hails. They might be wondering: “Hey, Uber and Lyft. It’s not so great.” This second-best alternative would also help to protect taxi shareholder values.

Again, you don’t need the public convenience test, but if you want to do something to help the taxicab industry or maybe minimize some of the negatives of ride-hailing, you’ve got some other options there.

Question 2. This is slide 19. What criteria should be considered when establishing price and fare regimes? I’ve just crossed out this “reasonable business rates of return for service providers.” We should not ask that question for this market. Something like reasonable business rates of return might be asked for in something like the regulation of Fortis. They’re a natural monopoly, and they need to be incentivized to invest in capital, etc. You might do some cost of service regulation, but for taxis, you simply don’t need that.

My first-best solution is to move to maximum fares. Right now it’s minimum fares. I would flip that and make that the maximum fare and allow fares that pick up via the street — you wave down a taxi, or someone makes a phone call — to actually adjust their rates. If they want to charge, maybe, a lower fare, as long as it’s lower than the maximum, that’s all good. That would create some competition for them and allow them to challenge ride-hailing a little more.

For taxis booked by the apps — I’m thinking of Kater here — I think you could allow floating fares as long as the price is transparent to consumers. But that’s only on the app-based stuff. For ride-hailing, floating fares, I think, are good as long as the price is transparent.

I want to suggest that regulators keep the maximum fare regulation in their toolbox. You don’t have to impose it just yet for ride-hailing, but you want to keep that.

A second-best regime would actually be to impose the maximum fare that can be charged by ride-hailing firms. I don’t think that’s the best option. I’ll get to that in a bit, but I just want to flag that.

Why I advocate maybe keeping maximum fares for ride-hailing…. I think Alex was maybe talking about this a little bit. Right now there’s no evidence that you need maximum fares. Ride-hailing has really benefited the consumer. There’s huge value being created in terms of…. People would pay a lot more for these rides, but they’re getting them for a lot less because the competition is really good right now.

Having these floating fares allows you to attract more vehicles on the road. At times that it gets busy, more people jump in to give shorter wait times. It also allocates existing vehicles to people who value it the most. So if someone really needs to get home, they might be willing to pay a buck more than someone who can wait a bit. It’s a good tool.

[11:05 a.m.]

Also, you can have different service offerings. Again, I’m on slide 20. So you could….

B. Ma (Chair): You just have one more minute, Benn.

B. Proctor: Tesla Model X, etc. Anyway, what I want to say on these maximum fares…. We’re really still not sure what the end-game is going to look like. There’s some evidence where ride-hailing firms might have taxi market power, etc. We want to kind of keep that, just to protect the consumer.

Boundary restrictions. I’m on slide 21. Just quickly, a bunch of boundaries. You don’t need these arbitrary lines. You really should just get rid of them. It forces a taxi in Port Coquitlam who’s dropping off in Vancouver to deadhead empty. You don’t need that. The issue, though, is that the taxi licence value in Vancouver is worth a lot more.

Getting rid of boundary restrictions — a few caveats. You’re going to create winners and losers, but you’ll have more winners overall because of the efficiency improvements — grow the pie, no more deadheading, better for the environment.

If we care about, maybe, protecting taxi licence values, there’s a way to get rid of boundary restrictions using kind of a modified auction lottery system. This would actually take a little bit of work to sketch out. But there’s a way to make it fair so that, say, the Vancouver licence value gets a little more credit than, say, the Port Coquitlam one.

It would cost money to do this. You’d need forensic audits. But it might help assuage taxi shareholders, and actually, by getting rid of the boundary restrictions, you might see the taxi companies play a little nicer with each other and represent more competition to ride-hailing.

The last question is: what should be required for ride-hailing drivers? I think a class 5 approach is good but not the end of the world if you want to go with a class 4.

Two questions I wasn’t asked but I want to just quickly address. Should we be protecting incumbent values? I say it’s in the eye of the beholder. People who just purchased a licence will be harmed the most. But this is a group of individuals that work tirelessly to capture politicians and regulators and that earn super-normal profits. I’m not sure that’s a type of behaviour we want to reward. Maybe you’d think about partial compensation for people who purchased the licence maybe before ride-hailing emerged.

B. Ma (Chair): Benn, we’re over time for the presentation. I’d really like to give members an opportunity to ask you some questions. Perhaps some of these can be covered in the responses, if that’s all right.

B. Proctor: Yeah, thank you. Sorry for going over.

B. Ma (Chair): No problem.

Do we have any questions for Mr. Proctor?

R. Kahlon: Hello, Mr. Proctor. This is Ravi Kahlon. Thanks for the presentation. I kind of wish we could see you. Clearly, you were very passionate when you spoke, so it would have been interesting to see. We appreciated your presentation last time, to the committee, as well, and you had thoughtful comments to make.

You had a bit more to say, but I wanted to maybe give you a chance to just speak a little bit more around the supply piece. We had the question around supply. I don’t think you really touched, in the presentation, on supply. Are you suggesting that we just have unlimited cars on the road? What were your thoughts on that? Is that in the presentation?

B. Proctor: I am saying, probably, the best solution is unlimited taxis and ride-sharing on the road. That’s best for passengers, and it’s also good for drivers because it creates more jobs overall in the sector. With more vehicles on the road, prices are pushed down. That’s probably not going to happen, given the value of taxi licences, etc.

[11:10 a.m.]

Another option could be to use a price mechanism where the PTB says, “Hey, if you want a taxi licence…. All the other folks are grandfathered in. They’ve got theirs. But if you want one, you can rent one from us annually,” at, say, a certain fare — or, say, at $20,000.

If you keep that as the annual rate, that acts as a ceiling for what the Vancouver taxicab companies and B.C. could charge to their drivers who are renting from them. Any time the price rises above that, people just automatically rent from the PTB. It acts to keep prices, values, down, and it generates revenue for the public purse. So there are some other options to control there.

I actually think the best option, in terms of maximizing benefits for B.C.’ers, is to kind of severely reduce these sort of competitive restrictions, like public convenience tests, that have prevented people from just offering a service that they want.

R. Kahlon: I’ll do a follow-up, if the Chair is okay.

B. Ma (Chair): Yes.

R. Kahlon: In your presentation, you say: “Listen, class 4 is not the end of the world.” You’ve got a bunch of things in there. You talk about wages, which is helpful — suggestions.

But in your report, you talk about how it’s not the greatest thing ever. You acknowledge that there is traffic congestion and costs and some shift away from public transit. So how would you recommend that we address those things, if everyone acknowledges that there are these challenges with unlimited cars on the road?

B. Proctor: Those challenges. There are always going to be trade-offs associated. So those challenges I raised come at the expense of great benefits for people who want to use these systems, who get shorter rides, cheaper fares, get more choice in vehicles. It’s up to politicians to priority-set.

What I want to say is that if you do want to value a little bit more these congestion issues…. To me, it’s not clear who gets the right to the road, whether it should be a ride-hailing company or someone driving their own vehicle. You’ve got questions of fairness there.

If you do want to manage those concerns, there are ways to do that. You could charge a higher fee for them to enter and a higher per-trip price. You could tack on a surcharge. Every time a ride-hailing trip happens, the government gets a buck out of it or something. That would be a big revenue raiser.

It would have consequences for passengers. Service would be worse. But it might mean less people are being pulled from transit. It’d also mean that taxi licence values get protected a little bit. So you’ve got some options there.

Really, what I wanted to say — when I talked about these second-, third-, fourth-best solutions — is the issue has been fumbled so many times that even just adopting little small steps would be a great way to deliver benefits for the B.C. passenger.

B. Ma (Chair): Any other questions from committee members?

J. Johal: Just one very quick question. I recall that in the ’90s, we had a similar debate. I’m talking about the fishing fleet. At that point, the federal government introduced a buyback program because of the limiting in the licensing. Is there any jurisdiction in Europe or North America where they’ve done fleet buybacks that you know of?

B. Proctor: I don’t know any fleet buybacks. Sorry. I will say you’ve had other jurisdictions adopt more strict regulations around ride-hailing companies in a way to protect the licence holders. I know in Minnesota, when they opened up the test — got rid of public convenience tests — taxi licences were worth about $25,000. They instantly declined to a little less than $400, so people were affected. But if you think about an asset worth $25,000 versus some of these reported at half a million bucks, there is going to be more pain dealt in Vancouver.

I do think that keeping just transportation network companies…. And ride-hailing companies only seem to want to do dispatch by an app, and that’s fine. But allowing taxicab companies monopoly rights for picking up street hails, etc., can act to protect licence values.

You also — and I mentioned this — could do sort of an auction or lottery system around the boundary restrictions that would sort of protect and favour the incumbent firms. Again, I don’t know that these are people and this is the type of behaviour that we want to encourage in society, which is, basically, try your hardest to capture regulations in your interest only, and then when they fail, demand compensation. It’s really not how we expect a market economy with the rule of law to work.

[11:15 a.m.]

My preference is no compensation there. In terms of people who may justify the compensation, they are those who just bought the licences more recently.

B. Ma (Chair): Any other questions from committee members? I have a few questions for you. I guess it’s one big question.

Mr. Proctor, you mentioned that your recommendation is that there be no limits on vehicles — similar to what Ravi had noted — because there is a great public benefit in terms of reduced prices and shorter trips. But that, of course, is in competition with the negative consequences of that, which is substantially increased congestion which may very well drive up the length of time that trips take and drive up costs.

Also, there’s tension, of course, with fair wages for drivers, where the lower the rates being charged, the less money drivers get. So there’s all sorts of tension around here in terms of….

B. Proctor: Sorry. I feel like I’m getting a few words put in my mouth. I don’t think there are substantial or significant congestion costs, but I do want to identify that congestion costs are a concern.

The reality is that we’ve only been living with this for about five or six years, so over the long term these types of things may fade away and there’d be better policies to address congestion through road tolls, etc. But I don’t want to go there.

I do think taxi drivers benefit a lot more from a situation where you’ve got more ride-hailing on the road and you’ve got more taxis on the road because there are basically more people employed by the sector.

The industry has always been a low-wage-paying job. Now, alternatively, you could require higher minimum wages for ride-hailing drivers — say, 17 bucks a pop. That’s fine. That raises fare prices but it keeps less…. That has some benefits to it, so there are some other options there. But I really don’t want that….

You know, I don’t think ride-hailing is a bad thing. I think it’s one of the best sorts of innovations. It has overcome all these regulatory capture issues. It has really been beneficial for consumers. There are some trade-offs associated with it.

Sorry to interrupt the question, but I just wanted to kind of clarify my views on that issue.

B. Ma (Chair): I certainly appreciate the clarification. Thank you so much. So through your presentation, it sounds as though — and again, feel free to clarify — the recommendation is that we not apply….

Given that there are tensions — whatever level of tension that there may be in these various areas — there is a necessity for legislators like ourselves to take them into account and try to manage them as best we can with the various tools that we have available to us. It sounds like there’s a recommendation to not utilize vehicle caps but rather manage the various trade-offs through fees and wage increases.

B. Proctor: Yeah. Thank you.

B. Ma (Chair): So dealing with the challenge more peripherally is kind of what I’m hearing.

B. Proctor: Yeah. I’ve got to compliment you. You really sang my notes perfectly there.

It’s a hard decision for politicians to make. What I’m saying here is: don’t let perfect be the enemy of the good. Some ride-hailing is better than none. You’ve got some other options. These are kind of market-based mechanisms. So instead of trying to get a board to set how many ride-hailing vehicles, etc., you actually just use a price mechanism to allow people to enter the market.

The thing about the price mechanism that’s nice is that it doesn’t require political appointees to try to make a decision on what the right number is. People just respond to what the prevailing price is to register a transportation network company or to pay higher minimum wages.

There’s one other advantage that I want to talk about, but it is slowly falling out of my brain right now. Sorry. Back to you.

B. Ma (Chair): No problem. Thank you so much. We do have another question from Mr. Olsen.

A. Olsen: Thank you, Mr. Proctor. It’s more of just a statement, I guess. You’re the first person who’s presented to us who has, I think, been able to make all aspects of the in­dus­try and the people around the table cringe. I appreciate your thoroughness of actually going after, I think, some of the real challenges that we face in this province, with courage.

[11:20 a.m.]

I think that it highlights what we have to do here. The work we have to do will have to, I think, mirror that courage. So thank you for that. As I look around the room, there are varying levels of wincing and pain being felt, with the exception of one member who is shaking his head sideways.

B. Proctor: Well, if I could just respond to that. I want to say thank you. I realize being a politician is an extremely hard job. You’ve got a lot to balance. So no judgment here. I’m just kind of talking about incentives in the market.

Maybe if I could just get to my last slide that I didn’t present. That’s just around how the PTB should go, going forward. These issues around regulatory capture. One of the problems, I think, is this appointment process. It might not be based on merit and expertise of the board members, and it possibly could be kind of related to patronage.

With order-in-council, maybe that’s not the best way to appoint people to the Passenger Transportation Board. Why not have the committee bring forward appointments and have all MLAs evaluate their credentials, much like you see, especially, in the U.S. appointment process, where people get sort of evaluated and interrogated? I think that you want really independent, smart people making these decisions, and you kind of want to put a little bit more political stringency to these appointments.

B. Ma (Chair): Thank you so much, Mr. Proctor. We’re going to have to end this now. We don’t have any other questions. We really, really appreciate you joining us via Skype.

B. Proctor: Thank you, and thanks for extending my time. Sorry for the technical difficulties.

B. Ma (Chair): No problem. Take care.

I think it would benefit everybody in the room if the committee took a five-minute recess. So let’s reconvene in about five minutes.

The committee recessed from 11:21 a.m. to 11:27 a.m.

[B. Ma in the chair.]

B. Ma (Chair): Our next presenter is Dr. Dan Hara from Hara Associates.

Dr. Hara, thank you so much for joining us today. You’re a well-known name in the field of ride-hailing here in B.C., given your report. If you have seen any of the previous presentations that we’ve had here today…. You’ll be given 25 minutes to present. I will put a timer up for you. I’ll put a timer up right here so that you can actually see it. Then following your presentation, we will have 20 minutes for questions. So please proceed when you have a chance.

HARA ASSOCIATES

D. Hara: Thank you for the opportunity to present. We’ve gone with an old-tech solution here, so you have slides. One of the virtues of them is that if I take too long, they’re still there. So please cut me off on the time. I think that questions are, perhaps, the more important part since we’re on the record on a lot of things. So we welcome that opportunity.

My firm has been working in this area for over 20 years, in terms of vehicle for hire. We advise primarily regulators and government agencies and governments. Our general stance is that we advise in the public interest as opposed to…. When people say “industry expert,” we’re an expert on the industry, not an expert from the industry, which is often an important distinction, especially given the kind of discussion you just had. So I think it’s important.

I’m an economist, myself, as is our firm. My specialization…. On the degree it says: “Industrial organization and public finance.” As you’ve noted, we were recently privileged to be able to provide the report Modernizing Taxi Regulation.

I should also add that the slides are focused on the questions that were posed, but I welcome, during questions, talk about co-ops, talk about driver incomes, talk more about various alternative ways of running the licensing. The New York example you may want to explore more. It’s easy to misunderstand. There are some unique things that are happening in New York and in London, England, that are slightly different. So you can often draw the wrong conclusion just looking at it.

Turning to the slides, though, on balancing supply with consumer demand. The limits to vehicles for hire, particularly in terms of taxis, have their roots historically in the periodic recessions and the Great Depression.

[11:30 a.m.]

The problem was, ultimately, excess entry. It wasn’t about excess profit in the industry. It was about drivers storming city halls asking for protection and things like that, and fights in the streets over passengers in the taxi lineups.

Today it is not clear whether the logic of that applies to dispatch taxis or to TNSs. That’s our legislative term now, as you know, for things like Uber and Lyft and local companies.

For taxis in B.C., as elsewhere, we right now have a regime where the expansion of supply didn’t quite keep up with demand. It’s common elsewhere. Thus we have this entrenched value of taxi licences, which the previous presenter had made pretty clear.

In our report, we suggest that if we are going to continue to regulate supply, we no longer need to use this primitive mechanism of fixed numbers of vehicles. There are many alternatives. We’ve identified several. The annual lease fees were mentioned by the previous presenter; also, trip fees and similar.

It may help to take in an example from a total other space. Very few people would dispute that the Bank of Canada controls the money supply. People fear what happens every auction. But the Bank of Canada doesn’t even know what the quantity of money is out there, because it’s not clear what money is. We don’t know if we count credit cards. Now we have Bitcoin. But it doesn’t matter. What they do is they exercise control on the cost of money. They can tighten or loosen conditions through the interest rate. That is the equivalent of what was termed a price mechanism.

You don’t have to have a lot of technical data to drive a car. You just hit the brake or the accelerator, and you achieve your results as far as speed goes.

The alternatives that we’re now able to apply give you control, while leaving supply free to respond immediately to changes both up and down in demand. They can also be used to stabilize and protect any existing licence values, depending on your policy choice, and to generate funds for other needs, such as accessible services.

Next slide here. If we’re going to stick with the current PCN regime, which is what we’ve done with the last round of legislation, then I have these comments to offer. If the transportation network service model is to be given a chance to work, supply would have to be pretty liberal. One reason is just minimum efficient scale. To provide a feasible service to cover an area, you need so many vehicles. Otherwise, you’re too far away from the customer. That’s one reason.

Of course, you want competitors. You want a chance for B.C. TNSs to emerge and grow, including alternative types. I’ve heard volunteer organizations, as well, want to use the framework for insured service. So I think you’ll want to do that. You don’t want to give all the licence…. If you have a limited amount, they’re going to be…. They’ll go off the shelf, and then we’re stuck. The latecomers, the people who have to organize their communities, for example, are not going to come to the table.

With that competition, of course…. This is not really on the slides. But the other things…. It affects driver income, for example. When there’s competition between providers, drivers get a choice of who to drive for or which service to use, if they think of themselves as a business, so that the surplus that might be extracted from them is minimized.

Now that’s a lot more vehicles, if we are counting vehicles.

Oh, I should add, of course, taxi companies may want to launch their TNSs. When we talk about them, it’s not like there is necessarily two separate groups. There’re two separate regulatory initiatives. And interesting things can happen. B.C. may turn out to lead instead of follow. There might be some innovations that will really change things.

But the experience elsewhere with all those extra vehicles. The demand exists out there for it. People really want to do that. Now, that’s partly the source of the congestion concerns. Whether the size of them is going to be material — that’s an issue. There’s certainly something to be concerned about. But those extra trips are going somewhere. If it means that people are going out more to your B.C. restaurants on a Saturday night, that’s money being spent in the province instead of elsewhere. So you have to consider the whole of the situation.

[11:35 a.m.]

Some of the other mechanisms we’ve talked about too, like price mechanisms. If you have per-trip fees, you can vary them regionally as well. They’re not the same all the time. You can have a congestion extra fee for downtown. It doesn’t even have to be by type of service. It could be anyone. This is what New York is doing — New York state, I should add. It’s taking money for coming into Manhattan, because it is really crowded there.

Given all that, of course, taxis should also be given the chance to further expand if that’s what the industry wants. Here we have a justice issue about…. They’re already going to have a huge whack on their licence share values from the additional competition. They’ll be holding on to whatever remains, and that’ll be basically centred around their exclusive right to street hails. The industry’s own will counts in this aspect, I would think.

I’ll defer any questions about public transit to questions.

Moving on to establishing boundaries. Boundaries should be big enough, in theory, to capture…. Most of the passenger movement happens inside the boundary. That’s certainly not the case today for the taxi boundaries. Historically, it was true. They were set around the municipalities, whether there were gaps in between the municipalities. Now people are moving back and forth across an integrated area, so it doesn’t do the trick anymore.

Our report notes all the kinds of service issues, including tactical responses of drivers trying to cope, which leads to trip refusals. That’s all documented there.

With TNSs, you have an opportunity for more rational boundaries. A rational boundary would be bigger. Whether it’s all of Metro or not is an interesting question. However, in making that decision, you’ll also want to think about those smaller communities, especially around the outside. When they were speaking during our consultations, they really thought and hoped that they could get better service from the TNSs.

If you draw a line and say, “Put these smaller places separately,” they might not get that. If you’re going to have to make a separate application and promise service in that small area as a new TNS, why would you do that? You’ll go for the cream and deal with the other stuff later, if at all. If you want to give an opportunity for that to work, you’ll want to take that into consideration. What happens with the small communities?

For taxis, we can also improve the situation, but that’s going to be very controversial for them because the impact…. There’ll still be differences in the value of their licences. If you merge them, then they’ll become the same. Particularly, the city of Vancouver will be the loser.

We can do quicker in-between things by making incremental changes in the rules for cross-boundary trips — to make apps work easier, for example, if they want to cooperate with their apps. There’s another set of choices that’s an intermediate step. Another advantage of that is the best way….

We don’t really know where people go. We know that they’re travelling across the boundaries. Once we have all this data reported — and that’ll take some time to process — then we’ll have a better sense of where boundaries should naturally be.

On price and fare regimes. Fare flexibility is part of the TNS business model, far more so, in fact, than having an open number of licences. One of the attractions that people take with them when they come to B.C. and say, “I want it here,” is that, to name a firm, you can always get your Uber. You have to pay, though. It might be triple price, but you can always get it. They use that in a very automatic, responsive way to match supply and demand in the moment. So that’s an alternative regime.

We have a fixed price…. You’re giving consumers a choice of this variable price regime and then, if they can still hail a taxi on the street at a fixed price…. Maybe they have to wait, but that’s a choice. You’ve got bigger choices than you had before.

We should remember that the flip side of the TNS model is also the low prices. I’m not talking about the predatory pricing, which does happen, I think. I don’t want to get sued here. It’s a separate issue. Regular low prices do occur because in the classic taxi system, those taxis are idle a lot of the time, even when we have shortages. That is what makes a regulator’s problem so difficult — holding hearings on a new application. They’re not used well because we’ve tried to keep enough out there to cover the peak demand.

[11:40 a.m.]

To deal with that with low prices, they actually make money or sustain…. They just keep the taxi busier. Instead of being so idle, they get more trips and zip around. Lower-income people or people with the power just to be flexible about when they use a taxi get the benefit of the lower price.

However, we should set rules for clarity. People should know — and not on a drunken New Year’s Eve not understand what 20 times means. Then there are also questions of natural disasters where it’s windfall profit. You can look up old stories about hurricanes. Other provinces have set limits in the case of natural disasters.

Taxis would need similar flexibility if they’re going to compete, but it might just be for apps or dispatch. For street hail, the nature of that business is different. They’ll have a monopoly, and that should remain a fixed rate, I think. I’m trying not to take actual positions here, but that one’s kind of obvious.

On driver qualifications, while we’re talking about safety or adequate supply, our real question is: what is safe enough? As even a well-licensed driver can…. Given the enforcement of the system, we see things like the Humboldt case. That was a class 1 driver.

What we do know, and we see it elsewhere, is that there’s going to be, especially at the beginning, a big driver shortage. That’s going to affect the taxi companies as well, as their drivers run off. It won’t be that there’s not enough money to be made out there. It’s that they can’t get a driver into the seat. Both sides will expect this.

Our report suggested alternatives, and there are more that are possible, of course. You can go to class 5 plus some form of training. It doesn’t have to be the same training for taxis and TNSs. The TaxiHost program is a great program, well reviewed and supported. But nobody’s going to spend…. Very few Uber drivers are going to take three days off to go to the education centre to become a part-time Uber driver. However, Quebec now allows an on-line training certification program for Uber. They’re the sole experimenter.

Or we can have class 4 for a taxi. And a really easy thing is what rental car companies do. If you’re under 25, you’re a different case. It’s a cut line, and it just means fewer accidents.

Other things. Well, I can…. The report speaks to it. Examples of alternatives now. Ontario is the only one that just allows class 5. For example, in Saskatchewan, they’re looking at class 5 plus conditions. You have to have driven for an extra two years in the graduated after the licensing program. That kind of adds to the age as well — kind of a minimum age. And then you have to have a clean driving record, things like that.

Those are the main remarks. Again, I welcome your interest in co-ops, driver income and New York.

B. Ma (Chair): Ms. Singh has the first question.

R. Singh: Thank you, Dr. Hara, for your report. I have a question about the driver qualifications that you bring up. I find it a little difficult. You have class 4 for the taxi drivers, and class 5 for the ride-hailing companies. How can we go with that? Both are doing the same work, and both are transporting passengers. Safety is the key thing that we keep in mind. Why do we have two standards for them?

D. Hara: That is only one of the options put forward. If you were to take that option, you’d be thinking slightly differently about TNSs and taxis. People are always talking about a level playing field. But we’re actually slightly different services here. You might actually be doing, in the long run, the taxi industry a favour, because what makes it distinct is it’s more highly supervised.

There are people who won’t phone a TNS but will phone a taxi because they trust the regulatory system. If that includes a higher standard for drivers, that would be consistent with that. Now, some of that depends on whether the industry likes or doesn’t like the idea. Right now they’re focused on a coming driver shortage. But if you were to take the long view about “what makes my product good,” you might decide: “Oh, I want higher standards for me. Let them run the low end, and I’ll offer something that is attractive to my base.”

[11:45 a.m.]

B. Ma (Chair): Any other questions?

P. Milobar: In all the jurisdictions that you studied, even your previous report that you did for Vancouver a few years ago and that…. In that timeline, have you found jurisdictions that have gone away from the ability for the taxi industry to still have that exclusive street-hail ability? Or does that seem to be a fairly consistent piece that doesn’t change, where the Ubers and Lyfts of the world still need to be strictly app-based and the more traditional-looking taxi can still have that exclusive ride-hailing right?

D. Hara: To my knowledge, I can’t think of any major jurisdiction that has surrendered or opened up street-hail, which includes taxi stands, to anybody but a visibly marked vehicle that you can trace and chase, one that doesn’t just have a magnetic decal either — they can go around the corner and be removed — and numbered, so that the customer knows that they’re actually getting into a regulated vehicle in a traceable way.

Also, from the taxi driver side, we have more safety equipment in the taxi driver’s place: dispatch buttons for alarms; a little foot pedal; cameras that survive burning, in the trunk, not a consumer-based camera that can be grabbed. Many small things that protect the drivers well. It creates a safe environment, an orderly environment.

And a fixed price. You don’t want people negotiating. You don’t want people negotiating at the head of the lines, slowing things up. You don’t want to be hailing the only taxi in the rain, and you and them have a discussion about how much it costs. You just want to get in, and the driver doesn’t need the pain either.

J. Johal: This is a very broad question. Thank you for your presentation, Dr. Hara — illuminating.

We had somebody presenting earlier talking about a cooperative model, and great concern over large multinational ride-hailing firms operating — or at least hampering localized companies to flourish. Is there any jurisdiction that you know of where you have any significant local ride-hailing apps that have been very successful and are competing against the much bigger companies that have access to a significant amount of data and dollars behind them? I’m just curious if there’s….

D. Hara: You’re asking if there’s anyone small who is big.

J. Johal: Yeah, in competing. That’s a good way to put it.

D. Hara: Well, you said access to a lot of money. That’s kind of a contradiction in terms.

You do have people starting up all the time, and whether you call them cooperative or not, you’ve got a bunch of illegals now in Vancouver. It’s not so hard to start. The barrier is actually low. Taking the longer experience that the taxi industry has had, it’s easy to get together or drivers to get together. It constantly happens, except for the barriers in the public convenience and necessity regime.

There’s a very sad story about a company called Mile High taxi, where the regulator constantly turned them down. It was a new co-op. The state legislature even tried to flip out and reform the system of PCN to make it work like it says on paper — public need and so on. It took decades. They happened to stick it out, through multiple court challenges, and got there. But the PCN regime itself — we’ve decided to stick with it — is like that.

What I would say, that you have the opportunity here with regulations, is that the act doesn’t actually define what public need is. That means the regulations can speak to it. If diversity of supply is an important feature — whether it’s cooperatives, whether it’s volunteer organizations or community organizations — your regulations could say: “That should be taken into consideration. This is the diversity of supply that we would like. We want to keep more even of the profits here in British Columbia.”

P. Milobar: Just one last question for Dr. Hara.

Our first presentation today was the Ministry of Transportation. They referenced the Passenger Transportation Board and some of the changes. Unfortunately, the Passenger Transportation Board wasn’t here to answer. But I’m assuming you’re fairly familiar with — and you’ve referenced it — their three-part tests.

[11:50 a.m.]

It was conveyed to us that there’s been a fairly significant change to how that will be conducted moving forward. But the three conditions are the same. The only wording they changed was “the board may approve,” and they added in: “in whole or in part.” At the end, they took away “if the board considers that” and added in “after considering whether.”

In your opinion — you’re pretty well versed, obviously, in this topic — do those seem like significant changes to how these rules are going to be reviewed by the Passenger Transportation Board? Or does it seem more like a word exercise?

D. Hara: It’s an earthshaking change in grammar. It means that instead of having to meet each of three conditions separately, you can look at those three conditions and make a balanced judgment. The health of the industry might have been interpreted to really speak strongly to the current incumbents of the industry and the licence share values. Those are obviously going to be negatively impacted in most of the coming decisions.

Now you can take a balanced view. It’s not that it has to be a plus on all three fronts. That’s how I would take it, especially given the context in which the amendment was made.

P. Milobar: Okay.

B. Ma (Chair): All right. Thank you.

Now, making sure that I’ve got everybody else on there, I have a couple of questions for you.

You mentioned the need for substantial increases in supply, a liberal supply, but you also alluded to the concerns around congestion. I’m wondering if you can elaborate on that.

D. Hara: Congestion has its plus points too. The order of magnitude of congestion that exists is far different than exists in, say, New York, where the States put $2.50, $2.75, per trip. They were talking about $15 at one point.

B. Ma (Chair): Per trip.

D. Hara: As an aside, when you’re talking about it in New York, one of the things to be aware of is that there is a revenue fight between the state and the city, because the city auctions licences, and then, to the extent you tax it, the auctions yield less.

In the past, also, the city has not really limited dispatched taxis, which they call things like black cars there. They don’t call them taxis. The Ubers and the Lyfts are part of a larger licence class. That whole licence class has been frozen. Maybe they’ll start to auction that too, regardless of their other concerns about driver income.

In terms of congestion, we do have these mechanisms to control it. The biggest thing we need to do is change our perception about short term and long term, in terms of this. Also, this has to do with vehicle ownership and the impact on public transit. In the short run, people are taking more trips because they’re finally free to do so. Some of those will mean more to the entertainment areas, and you’ll have these clustered congestion issues. That’s the short run, because people grab that immediately.

What happens in the longer run, and we still don’t know, are choices on vehicle ownership, where to live, how you move. The entire city structure and retail structure could end up changing. That’s a far more open question.

Generally, the longer-term view is that, well, it might be good for the environment and good for public transit. I’m kind of drifting to public transit on this, but I think it’s very related in people’s minds. Public transit needs to adapt to the technology. They can use it as well and make their services more competitive. But people will, or may — we don’t know this — stop owning so many cars.

It’s easiest to go back to the long-standing history with taxis. People would talk about taxi rates, saying: “Oh, we should raise the taxi fares so that the people will take more buses.” They looked at them as competitors. In reality, when you went from city to city, where there were more taxis and service was liberal, you also had more public transit use and less congestion, in a broader sense.

What they’d compete for, collectively, is…. You can own a car, or you can take the bus. But if you take the bus, you also sometimes take taxis. So it’s a package deal in the lifestyle. They’d compete collectively on the decision not only to own a car but, more recently, whether to own a second car in the suburbs or whether to take the car to work. Some people take the car to work because they’re afraid their kid will…. They need to answer emergency calls. But if you can always get an Uber or a taxi, then you’re not so concerned.

Calgary kind of used that to start putting taxis at the fire hydrants, because they’re quite next to the office buildings, and as long as the driver was in it, they didn’t really block the fire hydrant.

We expect, in the long run, maybe, vast positive changes that would reduce congestion.

[11:55 a.m.]

The bigger issue that cities are looking at isn’t congestion now, although it’s constantly a concern, but driverless cars. If that comes to be — it’s not clear when or if — then we’re going to have a real problem, because commercial vehi­cles…. If you don’t do anything, then it’s cheaper to leave the vehicle running on a block without a driver than to park it when you’d have to pay, and then life will get bad. That’s a future taken seriously by city planners now, so they really want to not have to deal with the crisis after it happens. They’re looking for the powers and the data now.

I hope I’ve answered your question.

B. Ma (Chair): Yes. My second question is around another item that you’ve alluded to a few times, which is wages — in particular, wages for drivers, be they transportation network service drivers or taxi drivers that don’t own licences. How do we balance substantial supply with ensuring that workers aren’t being taken advantage of?

D. Hara: The real determination of the base-level wage of taxi driver…. Some do quite well. There’s some skill; they don’t all do the same. But for a lot of them, the base level is not very nice. The real determination is the minimum wage in other industries. Whether it’s a taxi company or an Uber or a Lyft, they have to leave enough money on the table, because they’re businesses, to keep the driver from going to those other jobs. When those other jobs become more attractive, then the wage rises.

Certainly, the relative…. Uber’s getting beaten up a lot now for its low income, but it’s really no different than the low income in the taxi industry. They made some false claims that you could do really well driving for Uber, but that has since, I think, been disproved by multiple examinations. But it’s not necessarily any worse either. It can’t be, because if they made it worse, then a lot of people would go and drive a taxi instead or go to other jobs. It’s a general condition.

You can, of course, set a minimum wage directly. There are some complications because, in some cases, they’re business people. You have your same problem with your worker’s compensation, whether or not people are covered. But the base level is going to be low, and it’s going to depend on what we do elsewhere in our social deal.

B. Ma (Chair): Okay, thank you. Any other questions? That’s it.

Thank you so much, Dr. Hara, for joining us today.

Committee members, because of the way the witnesses are scheduled, we will now enter a recess until 1:40 p.m. So you’ve got a nice long…. I don’t want to say lunch break, because I know you’re all going to be working on emails and other reports during that time, but you’ve got an hour and 40 minutes to do other work.

The committee recessed from 11:58 a.m. to 1:40 p.m.

[B. Ma in the chair.]

B. Ma (Chair): Our next public presentation will be led by Mr. Kevin Desmond and Mr. Geoff Cross from TransLink.

The format is very simple. We will give you 25 minutes to present. There will be 20 minutes following for questions from members. We ask that content and comments be really focused on the four questions before the committee today. I will set a timer up and face it towards you so that you know how much time you have left.

Did you have any questions before we begin?

Thank you so much for joining us. You may begin.

TransLink

K. Desmond: Thank you, Madam Chair and committee. Thank you for inviting TransLink to present.

I’m going to kick it off, really, just with the first three slides to set the tone, and then I’ll hand it off to Mr. Cross for the balance of the presentation and the response to the specific questions.

Firstly, I just want to note, particularly for those of you from outside of the Lower Mainland, that here in the Vancouver region, TransLink’s service area, we are in the midst of an astonishing increase in ridership and demand for our services — some 17 percent ridership increase over three short years. In fact, our ridership increase is second to none in Canada and the United States, for many different reasons.

One of the reasons for that is the very aggressive transit expansion that we started, actually, with the opening of the Evergreen Line in late 2016 and then through 2017, 2018, and at least funded through 2021. That’s very much thanks to a partnership that our mayors and TransLink have with the province and the federal government to help, particularly, with the capital side of our transit expansion.

Even as we’re working very hard to implement the transit expansions now, we are also very much focused on the future, the future of our region. We’re getting started with an update to our 30-year long-range plan for this region, and that’s going to play out during the course of this year with extensive public engagement.

Part of that long-range planning effort, very much central in that long-range planning effort is a very, very strong focus on the disruptors in our industry. Transportation is moving fast, and I’m sure you’re all engrossed in that as part of this work. We have to be part of that changing environment.

We know we have to be part of that changing environment if we as an organization, TransLink, are going to succeed, but certainly, more importantly, for the region’s mobility to succeed. So we aspire to very much be part of that change, and that means we want to make sure that we are improving mobility options for all people in this region. There need to be a lot of options. There is not a one-size-fits-all perspective.

With this slide, we just wanted to point out that our thinking that we’re going to talk a little bit about today evolves from established policy at TransLink, from our policy-makers and institutionally, most recently in the 2013 Regional Transportation Strategy, where support for sustainable modes and choices, utilizing pricing to help manage demand and capacity and ensuring accessibility for all of our services, is very much front and centre.

You’ll remember I was at this committee just about a year ago when you held your initial hearings, and these were the main tenets that I presented at the time. It’s guided by the sense that if ride-hailing services are introduced in our region, we believe they need to be introduced well. And if they are introduced well, it can improve mobility for everybody in this region.

[1:45 p.m.]

That will challenge an organization like TransLink, a public transit agency. It will affect demand for our service. It will likely affect ridership, at least on some of our services and products. But we need to move with the times. If it’s introduced well, it will motivate us at the same time to improve our service offerings. That is, in part, through partnerships with these various TNC companies that exist in models, at least, and pilot projects throughout Canada and the United States and overseas as well.

I’m not going to go through these. If you go back a sec, those were the five main points that I raised on behalf of TransLink in our last meeting, and they inform the rest of the material that Geoff’s going to go through with you now.

G. Cross: Thank you, Chair and committee.

We’re focusing on three of the four questions. The fourth one we see as not necessarily pertinent to TransLink’s perspective on this. We’re also containing our analysis and input, really, to the transportation objectives, recognizing that you have other considerations — affordability, labour, etc. — that you need to work through. But in our role that Kevin outlined, as both the provider of transportation services and the mandate to manage the movement of goods and people across the region, we’re looking at our modelling and providing input based on that.

The first one is around service boundaries — if we can move to the next slide. We’re concerned, given our experience operating in the Lower Mainland, in the Metro Vancouver region, about having too narrow service boundaries. We think — and it’s been our observation in how particular services are even provided today — that they are likely to distort the availability of supply and demand where you need it.

They may end up having perverse effects whereby you have too many vehicles when you don’t need them, during off-peak periods, out on the street and adding to unnecessary congestion and air pollution, you might not have enough when you really need them — when we have, for example, a service disruption on the transit system or a sporting event, etc. — and we’re not able to provide the full range of options that you otherwise could have.

Our other pieces. If you end up with boundaries and you can drop off but not pick up, you end up with a lot of what we call deadheading, which we experience on our own transit system, whereby you’re going back five, ten, 20 kilometres without a passenger, and all of the externalities that come from that.

The final piece is also around accessible services. As you know, we operate the handyDART services. About 9 percent of those, I believe, right now are in the form of taxi trips. One of the limitations that we have is the existing sort of framework of operating territories whereby it becomes more difficult to get enough vehicles when we need them — even just the logistics. So we’d not want to see that potentially replicated in the next go-round.

Next slide — if we could just go to the one with the map for a second. In considering how the boundaries might be set…. This is our region. These are travel patterns from the 2011 trip diary. This is for all modes of trips. The real takeaway from this…. As you can see, as opposed to a lot of short municipal trips — the heavier the band, the more volume that’s happening — trips are happening across the region, regardless of and agnostic to municipal boundaries. In fact, other than the city of Vancouver, the majority of all trips, by municipality, have been to a destination outside their own municipality.

We want to be sure that if we’re setting any boundaries, they’re wide enough to not have the perverse effects that I described in the previous slide, recognizing that so many trips are actually going to be between different kinds of jurisdictions, depending upon the time of day and the actual trip.

Next slide. The next question is about: how should regulations balance the supply with consumer demand, especially given the PTB’s current convenience and necessity regime? Our consideration is that caps may actually end up preventing the travelling public from seeing the full potential of these new services. As opposed to using pricing, putting an artificial limit on supply may end up limiting the amount of dynamic reaction that we would get in the market otherwise.

[1:50 p.m.]

I brought up an example of a sporting event. Those can happen during slow periods. They can happen during oversupply periods as well. There are lots of times when we would want to make sure that we are not unduly restricting that and thus losing the opportunity whereby, if there are not fleets out there, we can’t even get some of the promise of pooled services.

As you’re aware, in a ride-hailing environment, there are the opportunities in other places that have been used whereby you can have a pooled service where you’re picking up multiple people along a trip — basically, a form of almost public transit, if you will, at that range, where you are clustering those trips. If you have a small number of vehicles out there, it’s less likely that you’ll be able to make those matches.

The effect of that would be (a) that you’re limiting some of the options and (b) that there’s not an opportunity to have a lower price as a result for that person that’s taking that trip, because they’re not sharing the cost of that overall trip. We’re concerned about that.

We’re concerned — similar to the last point — for our handyDART and for our taxi-supplied or on-demand supplied trips for our accessibility community that there may not be enough vehicles where we need them, which are often difficult places to serve, whether they be in sort of semi-urban or rural areas around the region or at late evening times, where you end up that the biggest demand is in entertainment districts, where we may need accessible trips elsewhere.

Alternatively, our experience, both on the transit system and looking at what’s happened on the road system, is that pricing is a better measure of managing both supply and congestion.

We would be suggesting you consider per-trip fees that could be put in place as part of the licence structure to be able to manage some of the externalities that you’re worried about, that we are worried about, that Kevin pointed out, of excess congestion. That would help ensure the right level supply in areas so that providers are not having people out there trolling around waiting for rides, that there’s some level of incentive to make sure that they’re matching that supply to demand and that we could thus manage congestion both by location and time of day. I say “we” as public stewards of taxpayer dollars and making sure that we’re getting the outcomes that we’d like to see.

We also think that the variable per-trip fees could be structured in a way where you could incent some of the trips that may not otherwise happen by taking those fees…. Let’s say they’re collected during rush hour downtown, and there’s a concern that you’re not going to have enough trips out in Langley and enough provision, that we could incent certain kinds of trips if they connect to a transit service or if they’re at a time of day where TransLink — or our equivalent, B.C. Transit — is not providing a convenient service, or maybe no service at all…. Those could be used to subsidize some of those trips.

It could be done so in a revenue-neutral way, that you’re not trying to generate incremental tax revenue. You’re trying to maximize the public objectives that come out of that.

The next piece is around the question of fares, considering how we would establish price and fare regimes to ensure affordability and reasonable business returns. We believe that flexible pricing, flexible and dynamic fares, are the key tools for enabling real-time matching of supply and demand.

We’ve seen this on the transit system. We just completed our fare policy review earlier, mid-2018. One of the things that we noted is that both discounts and potentially peak fares or off-peak fares can have a really strong impact on managing demand.

We know that dynamic fares are an appropriate tool. We’ve seen that when we had tolls in the region as well and when we look at pricing, what the impact could be on managing demand, and allowing for having adequate services during low times of demand, where you may not have any sort of additional dynamic pricing — it might be at your bottom fee — versus at high periods, where you make sure that you have some sort of opportunity to incent more drivers to be out there and providing that service.

[1:55 p.m.]

However, as Kevin pointed out, we are concerned about how there could be the opportunity to chip away from really valuable transit investments in the region, if they’re being offered at times where we have good services, where we have competitive fares, etc. So making sure that there is a floor and considering a bottom rate that takes into account what the cost of transit is so that there is an incentive to take transit when we have good, convenient options in place. This would allow walking, cycling and transit to remain competitive without increasing the challenges around affordability in the region.

We do feel that it’s important that price transparency, just like when we offer it on the transit service, is in place. As part of our transit fare review, we looked at time-of-day pricing. That’s something we’re going to be, potentially, pursuing — even distance-based. One of the things that we heard from our customers is a real demand to know how they calculate their fare. They wanted to have comfort when they go out that they’ll know roughly what it’s going to cost them, to be able to the economics. In whatever system that comes forward, having some level of transparency, even if it’s dynamic, so people can predict that, will be really important.

In summary, those are the three areas that we really want to focus on as the regional transportation provider. Boundaries — as we’ve mentioned, we think it needs to be broad. There’s a reason why TransLink’s service boundary is the way it is: to capture the majority of most trips within the Metro Vancouver area. Using a market-based approach — variable trip fees to manage supply and demand. And to allow some dynamic fares to be in place to better match the supply and demand across the region. We feel that this would be in the best interests of our travelling public on our transit system today, our accessible transit users, accessibility community, as well as the general travelling public.

That’s it, Chair.

B. Ma (Chair): All right. Fantastic. Thank you so much. We’ve got lots of time for questions.

R. Kahlon: A couple of things jumped out at me. You’re suggesting that we use demand pricing to control the amount of cars on the road. You said that you’ve done research on how that kind of modelling would work for TransLink. That’s something that you’re actively considering. Is that what I heard?

G. Cross: Good question. As part of our transit fare policy review, as well as some work we’ve done on our regional transportation strategy — understanding the impacts of pricing on both systems, on the road and on the transit — we know that people are elastic to price, obviously. We can see the kinds of responses that are going to happen. We also had controlled experiments on some of the bridges over time to know what happens to that when you vary the price.

Yeah, we believe that you can get a pretty good prediction on what will happen with certain kinds of prices. I don’t know what those look like right now. But being able to manage those fees and get the outcomes…. I think one of the things that would be important, if that’s the route you end up going down, is the ability to adjust over time and see what’s happening — set those sort of locations and times and understand what the response has been.

R. Kahlon: I appreciate that. I guess, to go back to my question…. You found that in your studies. So you’re suggesting that we use that, and that’s something that TransLink, potentially, is taking to the public. When they are, say, getting off work and TransLink is at the peak busyness, you’re going to raise rates to manage supply. Is that what I’m hearing?

G. Cross: We may use discounts during off peak. That could be the same that you use. It’s just using price.

One of the things…. We used to have a midday discount back maybe 15 years ago. When we eliminated that, for a variety of reasons, we all of a sudden saw a ton of people move from, say, two o’clock in the afternoon into the peak periods because they no longer had that price incentive. When applied to the road system, that could have the same effect if it’s set at the right level.

K. Desmond: If you have a pricing mechanism, you can strike a preferred balance of supply and demand, and you can tie that to the available capacity, to the infrastructure, whether it’s roadway space or, in our cases, seats on trains and buses. We’re suggesting something similar.

R. Kahlon: I appreciate that. This is the first I’ve ever heard that. That’s why I wanted to clarify I heard that right.

We heard from similar experts this morning and in the past that there is potential loss of revenue for public transportation providers in other jurisdictions around North America. I think we heard that from Mr. Proctor, who just presented. Have you considered potential loss of revenue, and would you be looking at the pricing model for some sort of supplement to supplement transit? Is that what you’re proposing or suggesting?

[2:00 p.m.]

K. Desmond: Let me take the first cut at that. We’ve been following along with many, many different studies, certainly in the North American space, on the impact of ride-hailing and TNCs and shared service as a general matter — car-share, bike-share, and so forth. I think the jury is actually still out. I think each metropolitan region where TNCs exist has very, very different transportation dynamics, different types of transit services. In most places, what we’re seeing is that it’s probably drawing away some ridership.

On the other hand, our neighbours in Seattle that have had TNCs since 2013 are actually the fastest-growing transit region in the United States. We happen to be the fastest-growing in all of North America. It can be very dependent on the type and nature of the transit system and the overall transportation environment.

That said, we don’t have our heads in the sand. If TNCs come, it will affect demand for our services. That said, one of the proposals that we’ve made in the pricing is that if it’s priced, it could also generate some revenues for other mobility solutions where we don’t maybe provide as good public transportation — particularly, let’s say, in off-peak periods. We might be able to then subsidize and improve transportation in those areas, whether through partnerships with TNC companies or in just providing subsidies directly to the TNCs to operate in those off-peak areas in those lower-demand areas.

We think we can then strike that balance, where we’re still using the taxpayer dollar and our services are paid for by the taxpayers, as productively as we can. But we can also find interesting and new ways to partner with taxi companies, with TNCs that can provide a net benefit of mobility in the region.

At the same time, yes, it might affect our ridership to a certain degree. But we’ve got to be very much focused on…. If there’s a net benefit in mobility, then we have to hurry up and get with the times and figure out how, as our organization, we can evolve with that to provide better mobility to the people of this region.

G. Cross: An equivalency is we invest in cycling, regional cycling, with the municipalities. That may, in some cases, compete with our own transit services. But if that provides a more affordable option and it’s a better way to deliver that trip at a better cost, we’re willing to pursue that.

R. Kahlon: You haven’t modelled it as part of your 30-year plan? It’s not part of your considerations yet?

K. Desmond: No, I mean, it certainly depends on the outcome of this exercise and exactly what types of services ultimately will be allowed and will start to come into our region. At this moment, the best we have are the many, many studies that have been done, primarily in the United States on United States regions.

R. Kahlon: The only reason why I raise it is that, I mean, you’re suggesting a solution, which we’re grateful for. I just find it a little bit odd that you’re presenting a solution without thinking through the implications for TransLink, because that’s what we’re expecting from you — to give us a perspective from TransLink, not necessarily the best perspective that you think the public might find.

I guess what I’m trying to get at is that this is what you’re suggesting we should do, but you haven’t fully thought through how this will affect your bottom line. That’s kind of what I’m getting at.

K. Desmond: Well, I wouldn’t say that. I think our mission at TransLink is to look after and provide for the mobility of this region. If our motivation was purely our bottom line and our fare revenue, we would probably be testifying differently today. But that’s not TransLink’s mission. TransLink’s mission transcends that — No. 1.

And No. 2, I think, for us, from a modelling standpoint, it would be difficult to fully model out even a relatively precise impact on our fare revenue. Our fare bucks recovery, meaning the percent of our operating costs recovered by fares, is about 53 or 54 percent. It’s one of the best in all of North America, by far. We covet that. That fare revenue is absolutely important to us.

We also know there’s a gargantuan deficit of transit service in this region. We can’t put it out fast enough. The extent to which there are new players in the region, we want to figure out how to integrate with those new players and then deploy our resources where they can be most effectively used, knowing that there’s a scarcity of those resources as it is.

G. Cross: We do think, given some of the suggestions that we’re making today — variable fees, per-trip fees, etc. — that that would probably tip some of the affordability balance, so riders of choice and people that are on our system today, where we have really good options, would probably remain on the system as a result.

[2:05 p.m.]

We have to project out ten or, sometimes for projects, 30 years. Certainly, there are a lot of things that we can’t project, whether it be the price of transit or transportation options, but we know it’s been looming, so we keep some level of variability in our forecast.

S. Chandra Herbert: Thank you for your presentation and for coming back. It was good to hear you last time.

Again, I’m curious. I’m interested. I know last time this committee debated congestion charges. Certainly, some of us were concerned — and I remain concerned — that we could see increasing congestion, as we’ve seen in New York and San Francisco, perhaps, based on how we bring in ride-hailing.

Of course, I think you mentioned, Mr. Cross, externalities of trolling for customers, of lining up down the streets, of a kind of desperate bid to fulfil a demand, for sure, but that demand could pull away from transit while increasing congestion. Of course, it would be…. You don’t get there any faster. It costs you money, more than transit. Transit goes down. It costs more subsidy to support transit. That’s a bit doom and gloom, but we don’t want that.

When you talk about per-trip fees, I think San Francisco and New York have introduced some sort of a congestion charge. What does that look like? Of course, we should be ensuring externalities are covered not by just the broad general public, especially with a for-profit business. So I’m really interested in this idea, and I’d love if you could help educate the committee more on this question.

G. Cross: It’s a very good question. We map congestion across the region on the transit system, and we’re now doing that, as well, on the road system. We did a lot of that on the North Shore. You might have seen the outcome of the integrated North Shore planning, where we showed where those bottlenecks are, time of day, etc.

You can apply that kind of work, both by time of day and location, to figure out where may be the zones where you’re most concerned during those peak periods, whether they be in the morning or in the evening. Where ride-hailing…. That is not their core market, traditionally, in other territories. A lot of it is later night — actually, the majority.

To the degree that it would be occurring during those periods, you could get a pretty good sense of how that was happening and then, per the previous question, figure out what kind of fee, at what level, may actually reduce excess trips from happening. Because of the price incentive, people would either use another mode — could be walking or transit or not taking the trip — or it would reduce the amount of supply that would otherwise go out there, because they want to be very sure that there’s a trip or a pooled trip that’s there for them to pick up.

You could take a look. Let’s say it was downtown Vancouver, and between 4:45 and six o’clock it was X cents per trip.

K. Desmond: I asked to put that slide back up from our testimony a year ago. It’s extremely important to us that the outcome not result in greater congestion. We believe that’s a net negative for the region. It certainly is a net operating negative for us, because more congestion means our buses are going to operate more slowly. Buses operate more slowly, we cost more money, and it also probably reduces demand for our system.

I think that’s embedded, to a certain degree, in our recommendations here: what’s the most effective way to manage congestion in the best interests of the region? We have a very, very strong stake in that at TransLink.

S. Chandra Herbert: If I might just ask one more question on the question of congestion. Would the congestion charge be just on ride-hail or apply to taxis as well? Is there some thought around that? On TransLink buses?

K. Desmond: Certainly not.

S. Chandra Herbert: Clearly not, no. You’re helping solve the problem.

K. Desmond: We’re part of the solution.

S. Chandra Herbert: That’s right.

G. Cross: Right now we’re just considering TNCs. We haven’t gone through this, given the nature of that. That was the question in front of us. Given that it’s an incremental change, we know where our status quo is, understanding how this might be an opportunity to set the right line in the sand, if you will, around that.

S. Chandra Herbert: So the Passenger Transportation Board could look at the evidence and, based on choked points and so on, establish a range.

K. Desmond: Yes.

S. Chandra Herbert: Okay. Thank you.

K. Desmond: I would venture to say we can assist with that. I mean, we have Geoff’s team. We have an outstanding transportation modelling group. I know we’ve done lots of work with MOTI and the province, so we would be at your service, as well, to help model some of those outcomes.

[2:10 p.m.]

P. Milobar: Two quick things. I’m very well versed and familiar with the Kamloops situation in terms of transit, interconnection with handyDART, interconnected with taxis to help supplement both handyDART and mass transit when those aren’t available, either for outlying areas or on medical runs and things like that.

Can you give us a…? You referenced it a few times — about how integrated things are. How integrated are they down in the TransLink area, in terms of your use of the taxi system currently? Are you seeing this as a way, if I’m hearing you correctly, of getting more vehicles on the road to provide those overall transportation network connections? You get someone trying to get to a medical appointment, but handyDART is oversubscribed. I’m not sure if you have a taxi saver program down here, like we do in Kamloops.

K. Desmond: We do.

P. Milobar: Could you give us a bit more flavour around that? Then I have one other question after that.

K. Desmond: My guess is that, in Kamloops, you probably are experiencing not a lot of difference from what we do. As Geoff mentioned, about 9 percent of all of our handyDART trips are performed by taxis today. We think of taxis as a supplemental, an overflow type of service.

They are particularly important during peak periods. Our peak periods for our vans are very, very tightly scheduled by the various different adult day centres and many different medical providers — dialysis treatment, for example. During our peak period, which is roughly around 2 p.m. for handyDART, we just don’t have enough vans for the demand, so we do rely on the taxis for some of that extra support.

We believe that, again, if regulated properly and rolled out properly, introducing TNCs can broaden the availability of those services. They can help us improve our service for people with disabilities and for seniors.

We have funding in our current plan, our funded plan, through 2021, and we continue to expand the amount of handyDART service available. I’m not sure that we’re really keeping up with the real and latent demand for the service. Again, that’s where taxis, maybe combined with TNCs, can help provide some of that relief valve. It’s very much a part of our service; it will continue to very much be part of the service. Having more flexibility in how we can contract with those types of services, for people that are otherwise eligible for handyDART, is a net benefit to folks.

I think as a general matter, as I understand many of the transportation requirements in our region — even if you’re not eligible for handyDART and/or you choose not to necessarily use handyDART — a greater availability of services like these, for people that are more challenged in using public transit service, is a net mobility benefit. I think it broadens the accessibility benefits, but again, it’s also, in part, how it’s regulated and what requirements are made on the TNC companies.

P. Milobar: Looking at the volume map that goes with your conversation around service boundaries, I don’t think anyone would suggest that you should run a bus from downtown Vancouver to North Vancouver, to Richmond or to Burnaby and then drive an empty bus back, because you’re not allowed to pick up any passengers in North Vancouver, till you get back to downtown Vancouver.

Are you suggesting that boundaries would logically, probably, make more sense, given that you’re trying to interconnect handyDART services, taxi supplementation and all of those to create more of a true public transportation network, including TNCs? Are you saying that a more logical boundary to make that more seamless — not just for yourselves and the service providers but for the travelling public — would be to consider, at least in the TransLink area, to look at that as one transportation boundary?

As I say, I don’t think anyone would think it was logical to run a bus, empty, back from where you just came. We don’t tell you: “You can’t stop and pick people up at the stop.” Is that what you’re suggesting would be a logical geoboundary in the TransLink situation?

G. Cross: Yes, if boundaries are required and if you’re going to work on that. Maybe boundaries are required if there are caps. If there aren’t, then maybe you don’t even require them.

One of the outcomes of that could be that increasingly, we have trips between our service area and the Fraser Valley, whether it be Abbotsford or whatever. If you have that boundary, and if there are any caps, or even just having that operating licensing ability, you may make it less attractive for somebody to provide that service in Abbotsford or Hope than it is within the service area.

If there is going to be a boundary, try and capture the majority of the trips that happen in there, to not end up with that deadheading piece or not having enough supply where you need it.

[2:15 p.m.]

K. Desmond: The boundaries that exist today that the taxi companies have to abide by do, in my view, negatively affect our ability to provide that supplemental service for handyDART. It does complicate certain types of trips that are being requested by our customers.

S. Cadieux (Deputy Chair): Following right along, one of the challenges that I think we hear repeatedly from handyDART users or prospective handyDART users, people who would benefit from the use of handyDART but perhaps are not using it, is the lack of an ability to cross boundaries — or it has been in the past — and, certainly, to do that within a reasonable amount of time.

Somebody who lives in North Delta and works in Richmond has a 3½-hour commute via handyDART. I’m just saying there are examples. They probably change regularly and always are coloured by experience. The ability to add alternative modes…. Do you think that would have an impact on handyDART’s ability to provide more timely — like, a shorter time — service?

I don’t think I would…. I might not elect to work if my commute were going to be three hours. Or you might look for something else, but that might not allow you to take the job that is the best job.

K. Desmond: First, if any of our handyDART customers, particularly from that point of origin and destination, have a trip that long, that is utterly unacceptable. That’s outside the bounds — period — regardless of who our service provider is.

The short answer to your question: by providing more available services more flexibly, we would be able to provide better service. One of the problems is that when we’re constrained in the number of vehicles available — primarily the vans, but even the taxis — it then requires us to group-ride more. If you’re group-riding more, that’s when you get long trips.

S. Cadieux (Deputy Chair): Exactly.

K. Desmond: If Geoff wants to go from point A to point B, but you have to pick me up at point C, and then you’re going to drop me off at point D before you drop Geoff off at point E, that’s when you get a long trip. To the extent that we have more flexibility in how we can book and reserve and then deploy trips, we provide better service to our customers.

A. Olsen: Just a very basic comment. I want to thank TransLink for bringing us, maybe for the first time today, to an important point: that we’re doing this work in order to look after the user, the customer, better — providing them a better experience and better services. We’ve heard an awful lot about the other stakeholders in this, and I want to thank TransLink for bringing us and centring us back on the point that at the very centre of this should be the people who are going to be using those services.

We’ve got a long list of people providing us testimony. The ones that are not very well represented, frankly, on the list are the end users, the people who have to access it, the people who spend the time in the handyDART or spend the time using the service. I just want to acknowledge that I found your presentation to bring us back to that centring point.

K. Desmond: That has been our motivation throughout, as we’ve started to look at this a year ago, when you invited us to this committee, and since that time. That is our first motivation. Again, it’s not just the customer who’s demanding a taxicab ride or a TNC. I view any person who’s consuming mobility in this region as one of our customers. We’re trying to think of it in that very comprehensive way.

Back to my answer to the earlier question. We believe that’s our mission at TransLink. I appreciate you recognizing that, because we really are trying to find that way to express our point of view on this topic.

G. Cross: We’ve tried to be agnostic when we think about whether it’s us providing the service or just what the best way is to get that out. Whether it be late-night service, which we’ve been spending quite a bit of time thinking about…. There are limitations to how cost-effectively we can deliver our service. So what are the tools that we can employ in the public’s interest?

[2:20 p.m.]

A. Olsen: If I may, just very quickly, what was pointed out pretty clearly to us earlier today was the lack of agnosticism, if that’s even a word, that has been going around in this public debate on this issue. Thank you.

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

J. Johal: I just wanted to add one comment. We had that graphic up — maybe we can put it up again — in regards to the travel trips that the TransLink folks have provided. The map is quite fascinating in the sense that it really shows the irrelevance of municipal boundaries to the average citizen. Too often those of us in the political class get bogged down in that process, and you good public servants remind us of what really matters.

I want to echo what my colleague Mr. Olsen had stated. It shows that at the end of the day, we want a healthy taxi industry, but we also need to get on with it. I recall your comments during your last presentation about that last mile. That really hit me. The trips that you see — they’re suburb to suburb, specifically. I think people forget sometimes that we always have this conversation about suburb-to-downtown traffic, when really, suburb-to suburb traffic is what’s driving a lot of the congestion as well.

Thank you so much for your presentation today. If you could just talk a little bit about that last mile and the impact TNCs can have, particularly helping out transit services.

K. Desmond: Let me start, and then I’ll turn it to Geoff. The reason I even opened my remarks this afternoon with our very large ridership increase…. Our overall TransLink services: over three years, ridership has grown by 17 percent. On the bus side, ridership is up about 15 percent over those three yeas, and we’ve added 6 percent service. So as much as we are doing our best, through the partnership with the province and the federal government on the capital and with our municipal leaders, to push out as much service as we can, the demand is just far outstripping our ability to keep up.

As we see the landscape today, five years from now, ten years from now — as, hopefully, we’re going to continue to expand our rapid transit service, SkyTrain, and so forth — we’re not going to be able keep up with the public dollar. Hence, we do have to look at alternative transportation services. That is one reason that we help support bike-share. That is one reason that we are partnering with car-shares. And that is one reason that we think about, to the comment just a moment ago…. We’re thinking more broadly on mobility in the region.

There are partnerships that already exist in the industry here in North America and overseas. We would be eager to try to find those partnerships for this first mile and last mile — whether it’s with a bike-share, whether it’s a Modo car-share or with Lyft or Uber or any particular company or a taxicab company.

That way, we are actually, then, driving people to high-capacity transit, and they might be using, for that first or last mile, another mode. We need to figure out, though, the right way to partner with that. What’s the fare? How do you integrate the fare? How do you integrate the travel planning? It’s a topic we’re doing a lot of work on. It’s called mobility as a service.

G. Cross: In some cases, it may be TransLink providing or by contract services that are on demand that look like a transit service. Another case: I’m looking at this map where we’re introducing a new B-line service, a very rapid bus from Maple Ridge right through to Coquitlam. That last mile in Maple Ridge, which could be, in some cases, rural and more difficult — very costly for us to provide a service that’s convenient. It could be a wonderful place for a partnership to bring people into the overall system.

K. Desmond: At the end of the day, too, for the taxpayer, it can ultimately help TransLink, steward of taxpayer dollars, marshal our resources where they can best and most effectively be used. Back to the point of the insatiable demand for transportation and our services. Let’s put it where it can best be used, but we need to provide those other services for people that are demanding it in the lower-demand areas. We think it’s an entire ecosystem we have to think about.

S. Chandra Herbert: I know, certainly, in talking to some folks across Metro Vancouver, handyDART doesn’t always meet the test for them. It takes too long, and so on. I think sometimes the taxis can come in and fill that in a really good way but sometimes not. One of the concerns raised with us was: how do we address the overall accessibility question?

Obviously, taxis are required. Generally, a set percentage must be accessible. That costs more, subsidized from within the organization. If you go to TNC and you don’t have that kind of situation, one side has to pay an accessibility cost subsidy, which we all should do, obviously, as a human right, making sure that people can actually access transit and for mobility around the region. But the other side wouldn’t.

[2:25 p.m.]

Unless you set an accessibility charge or…. Some have suggested that there be a required percent of all cars within ride-hail or TNC that must be accessible in order to have the mirrored service that, I guess, a taxi would have to do — the challenge that we put on them through the PTB, a good challenge. How do you suggest we address that side?

I think my concern is the service that we have as it is now, in talking to folks dealing with a variety of disabilities, doesn’t meet their test, certainly in terms of timeliness. I know handyDART is slightly different, but even just accessible cabs — calling ahead, booking ahead. It’s certainly even worse than, some would suggest, their ability to access a cab is at certain times of day.

Should we set requirements on a certain amount of minutes before an accessible ride-hail shows up, through the PTB? Should we have a charge that we then use to ensure that kind of thing happens, through subsidizing the purchase of accessible vehicles and the running of them? How do we make sure that the system actually responds to where people are at, instead of just where the market determines?

G. Cross: It’s a very complicated question, and we appreciate it. One of the things that we identified in the enabling legislation is an accessibility fee. I think it’s at the potential to ensure that the supply of vehicles is starting to hit an appropriate level, given what we know today. But that changes, and that’s why we’re expanding our handyDART services and programs going forward in the next ten years, so we know that that will be dynamic.

I think, getting at the availability of services, that’s why one of the suggestions around any sort of per-trip fee could potentially be reallocated thus to an accessibility trip. So whether it be a leg that might connect with rapid transit, because a lot of our handyDART rides actually are multimodal…. Or it could be just in lieu of a handyDART trip that could go where the market otherwise wouldn’t.

I think you’d have to look at those two instruments together. Do you have enough vehicles to be able to do it? And then: do you have a fee and price structure to make sure that there’s enough supply of those vehicles to work that? That’s where the partnerships could come in as well.

B. Ma (Chair): I have a question, and it’s about the management of supply through a per-trip fee. What led you to recommend a per-trip fee versus a per-kilometre fee, for instance, variable according to the length of trip?

G. Cross: I think you could use either. We’ve looked at…. Potentially, administrative ease at this point could be simpler with a per-trip fee. And if you were setting it by location and time of day, you could really target it. There might be a zero fee in some places where you wanted something else to happen — more trips or more supply to be out there.

You could basically replicate that. So if you know that a zone…. There may be different zones that you could come up with, based on our mapping of congestion by time of day. You could set the trip to kind of approximate likely how long those trips are. We know a lot of them are fairly short. So it could be a proxy for distance-based.

K. Desmond: On the per-trip, if it’s tied to — which is what we’re tying it to — the intent to help manage congestion, then it’s more temporal. It’s by-time-of-day-based. I think per-trip probably lines up better to by-time-of-day. So if we’re operating trips in these times of day — peak afternoon, rush hour — you’d have a different licence fee. You’d have a higher fee to help manage the demand during that and help bring down congestion, potential congestion impacts.

If you could apply that on a per-kilometre, I don’t know. That would probably be more complicated, and that might steer different outcomes. It might still be interesting outcomes, but it could steer different types of outcomes. So do you want to incent or disincent very short TNC trips or very long TNC trips?

Some of the things, back to the ridership question, that we’re seeing in the literature a little bit, where transit agencies are losing leadership, are actually a lot of short trips that people otherwise might have been taking buses for. That might be, on a…. Distance-based pricing might drive you to one certain outcome; time-based would drive you to a different outcome. I think we’re favouring a little bit more on the time-based.

B. Ma (Chair): Interesting. Just to make sure I understand clearly the recommendation on this, the recommendation to not implement caps comes hand in hand with a recommendation for a per-trip fee. What do you think would happen if we had no caps but also no per-trip fee?

[2:30 p.m.]

G. Cross: You could end up with…. What we would see is probably an oversupply in some areas and an undersupply in others — just the market distortions that we would see. We think that they would have to go hand in hand. The pricing incentive is what would be…. Even in tandem with dynamic pricing, being able to vary that during times of day…. So the fees would allow you to manage.

Probably, there would be an incentive or a disincentive for more drivers to be out during peak hour around Burnaby Metrotown, so it would probably settle that because they want to make sure that they have a good probability of having a trip. The converse would be true, where you would have too few people out there at times, because they’d have to balance.

K. Desmond: I think then you would run into the congestion problem. Then you’ll probably maximize the impact on congestion in a negative way.

B. Ma (Chair): Thank you so much for your time, your presentation and answering our questions.

K. Desmond: We appreciate you having us here.

B. Ma (Chair): Our next presenter is Dr. Anthony Perl. I think I saw him enter the room.

Please come on up and take a few minutes. Do you need a few minutes, Dr. Perl, or are you ready to go pretty much right away?

A. Perl: Any time you are.

B. Ma (Chair): All right, Dr. Perl. We are the members of the Select Standing Committee on Crown Corporations. Thank you so much for joining us today. As you may have seen or heard from previous presentations, we’ll be giving you a 25-minute window to present uninterrupted. That will be followed by about 20 minutes of questions. If you end short, then we’ll just roll the rest of your time into questions.

I am going to start a timer and turn it around so that you can take a look. Did you have any questions for us before we begin?

A. Perl: No. Ready to go.

B. Ma (Chair): All right. Thank you so much. You may begin.

ANTHONY PERL

A. Perl: Thanks for the opportunity to join you and provide further input on the regulation of ride-hailing services in British Columbia. I’m not going to read my statement verbatim. You’ve got copies of it. I wasn’t able to make your session last year, so I appreciate the chance to come here.

I actually would like to start by giving you a gold star for this approach to deliberation and public consultation in advance of regulation. I think that prevention of negative consequences that can arise from ride-hailing is much more effective than trying to cure such problems after the services have been unleashed and let loose.

I think that because of the approach that you’re taking, British Columbia has the opportunity to develop best-in-class regulations in the world for ride-hailing services. I think you should aim for the gold standard in that by learning what has worked elsewhere and also what has not worked before opening up the floodgates for this type of mobility. I think that that’s an achievable milestone, and setting the bar high is what I hope you’ll do when it comes time to put those regulations together.

You’ve asked for four topics’ worth of input on shaping that regulatory framework. The first one is about boundaries. I think that there’s an implication there that’s very important that I just want to underscore to make sure that you know that I believe, anyway, that there isn’t a one-size-fits-all approach that can work for this type of regulation in a place as physically and socioeconomically diverse as British Columbia. I don’t think a one-rule-fits-all regulatory framework is viable going forward.

I would suggest that there needs to be some sort of segmentation — perhaps at least three categories of principles and practice that should be established. Maybe more, but certainly no less than three different categories.

I think there needs to be a distinct set of regulations for the Lower Mainland of B.C. I would recommend using the regulatory boundaries that correspond to TransLink’s service area in the Lower Mainland, which is mostly but not entirely the territory under the planning jurisdiction of Metro Vancouver.

[2:35 p.m.]

I think that beyond the Lower Mainland, there needs to be a regulatory zone or sphere for medium- and smaller-sized communities such as the capital region, Kelowna, Kamloops, Prince George and others. I think this zone should, again, correspond to the planning districts and perhaps the B.C. Transit service boundaries in those regions, rather than just necessarily municipal boundaries.

Finally, I think you need to consider a regulatory zone for rural and remote areas in the province. I’m less familiar with the geography of remote British Columbia, but I’d encourage you to consider input from the communities and other precedents in regulated services, such as B.C. Hydro or B.C. Transit. I’m sure that this challenge of how to come up with regulatory principles for a place as diverse as B.C. has been met before, and you shouldn’t have to reinvent the wheel, I hope.

As I said the last time I provided written input to you in 2018, I think that the impacts of ride-hailing services will not be uniform, consistent or easily predictable in those different zones. That’s why I think you have to come up with regulations — or at least create the space to sort of fully develop those regulations — to be tailored to the diversity of the province, and I think that these distinctive zones would be the best way to accomplish this.

One principle that I think can unite the zones, the regulatory framework for the zones, is to have as a goal to maximize the marginal social benefits of new mobility. The social benefits that come from new mobility, I think, will actually be highest in the rural and remote areas of British Columbia, where there is very little — even less now than there was in 2008 when you started these deliberations — alternative to getting around without a privately owned and personally operated motor vehicle.

You all know Greyhound is not doing business in our province anymore. Some replacements have arrived, but as a whole, I’d say the hinterlands of British Columbia are in great need of mobility options and alternatives going forward, and the benefits from that will be the greatest.

Conversely, I think the highest private benefits, that is revenues and profits, are to be found here in the Lower Mainland, because there are the most people and the most demand for mobility. So I think you’re going to need to come up with some kind of a balancing act or at least the principles that lead the regulator to have that kind of balance between places where the benefits to society are the greatest, in the hinterlands, and where the profits and revenues to the operator are the greatest, here in the Lower Mainland. That’s a balancing act that needs your attention. That’s my input on boundaries.

Your second topic was the regulatory approach to balancing supply and demand. I think that that requires some agile and active regulation. In other words, the market will not, in itself, produce efficient and equitable outcomes.

As I suggested, I think if we don’t have successful regulatory mechanisms in place, the Lower Mainland will probably get too much ride-hailing at certain times and certain places, and the rest of British Columbia will get too little for the social benefits that could be generated for seniors, for people without access to automobiles, for youth.

There needs to be some kind of effectiveness measure and performance goals for the regulatory system, and I think the place to start with that is transportation system performance data. That should be available to the regulator from regional mobility agencies like TransLink here — you’ve just heard from them before I arrived — and in other urbanized areas, probably from the Ministry of Transportation and Infrastructure, and also for rural areas. Physical mobility measures and performance should be part of the inputs to the regulation.

I would also recommend incorporating data on the sociodemographic context of mobility in each of these regulatory contexts.

[2:40 p.m.]

You may or may not have heard of the multidimensional measure of transport disadvantage, which Karen Lucas and her colleagues in the United Kingdom have developed as a policy framework for addressing equity issues in mobility in the U.K. I think that that would be an important approach, or something like it, to add in to just the physical issues of congestion and how many buses there are or aren’t in particular places.

Since ride-hailing offers the opportunity to really leverage other modes — the first- and last-mile extensions of public transit, access to airports in British Columbia, train and bus stations, and B.C. ferry ports as well — these regulations, I think, should account for the synergy between ride-hailing and the rest of the transportation system in our province.

Once these inputs about the transportation performance and the sociodemographic context, including transport disadvantage, are in place, I would recommend applying the core principles for sustainable transportation that were made in Canada quite some time ago now, I’m a bit embarrassed to say, because I participated in them.

In 2000, Canada had a Centre for Sustainable Transportation. We published a comprehensive definition of sustainable transportation, which I helped co-create as a member of that organization’s board. I’ve listed it in my testimony, and there is an appendix that talks about it. I won’t go into all of it, but I think that there are some basic principles there that have been widely adopted in other parts of the world and are slowly being embraced in Canada.

You may have heard the old cliché that in politics, there is no greater sin than being ten years or more ahead of your time. I think the Centre for Sustainable Transportation in 2000 was very sinful, because most of what we were talking about was about ten years or more down the road. But I think now is definitely a time to operationalize those principles for sustainable transportation, which I’d be happy to discuss more in questions if you’d like. As I said, it’s in my written submission, and it’s on the web.

The third topic for consultation that you’ve asked for is criteria for establishing price and fare regimes in ride-hailing services. As usual, I think balance is the goal in a well-run regulatory environment — a balance between affordability and a reasonable rate of return, you noted. I think that makes sense. I think that taking the principle of sustainable transportation applied to that suggests that you should have multiple measures of affordability and rate of return.

On affordability, it’s not just the affordability for the user of the ride-hailing services — broadly defined, because the user isn’t just necessarily an individual. They could be a health or a social service agency that’s using this service to bring clients to them or sending out their service providers into the community. That’s one definition of affordability. But also, there should be a sense of how affordable it is to the society as a whole, which has the external effects of this mobility, ranging from congestion, pollution and accidents to the social benefits of accessibility and participation in the workforce or education or health care. It should be measured at the individual and the social level.

Also, returns on investment need to be measured for the service provider, the driver and the transportation broker or network platform or whatever organization is running it. I think it would be regressive, for example, to encourage ride-hailing that leads to drivers taking home less than the minimum hourly wage in British Columbia, which, in some jurisdictions, does happen because people are sort of in a race to get whatever they can at low rates of revenue from these trips. Often the costs to the drivers are not included in their fees — the depreciation of their vehicles and other costs to them which come over the long term.

I think that enabling a sustainable future for drivers, riders and ride-hailing companies should be the goal on that rate of return. I don’t think that having the lowest possible price to the user will necessarily serve the public interest over time.

Finally, you’ve asked for input on the licensing standards that should be applied. I can’t see a big justification for exempting ride-hailing from the same standards that apply to other commercial drivers. Since I have a moment, I’ll give you my ride-hailing story.

[2:45 p.m.]

I’ve used it in both North America and Asia, and I’ve noted a wide variation in the qualification and the professionalism of the drivers I’ve had. In September, for example, last year, I was going to a meeting at the University of Nevada in Las Vegas. I landed at the airport there and used a ride-hailing service from a network that’s well known — but I won’t name them — for a trip to my non-casino hotel near the university.

Once I entered the vehicle, the driver took off in exactly the opposite direction. After about ten minutes, I took out my smartphone, showed him my map and asked him where we were going, both to demonstrate that we were going in the wrong direction and to remind him that I could call 911 if I had to. The driver then took the next off-ramp from the expressway, got back on in the opposite direction, went back through the airport and brought me to my hotel.

Now, I moved to Vancouver in 2005. I’ve probably taken 100 taxi trips home from YVR during that time, and precisely none of them have ever taken me along any other route than the most direct route to my home. I have to attribute this to the training and qualifications of Vancouver’s taxi drivers, who have served the public well over the years. I’ve never had to argue with them to get me where I’m going.

If there’s a way to provide comparable training and oversight to ride-hailing drivers with less onerous regulation, then I’d encourage you to consider that mechanism. But I think that letting anyone with a personal driver’s licence operate paid ride-sharing services can be a recipe for trouble, as I discovered in Las Vegas.

As I noted in last year’s submission…. I’ll just mention it again, even though you didn’t ask. I do think that the regulatory load and innovations needed if we are going to have the world’s best ride-hailing regulations in British Columbia will call for greater capacity than what currently exists at the Passenger Transportation Board.

I’d encourage you to consider expanding the capacity for new and old mobility planning and regulation. I had suggested last year a provincial passenger transportation council, which could be led by a new commissioner of public mobility. This would combine the commissioner oversight role that used to be there for transit and also for B.C. Ferries — maybe even for local airport oversight. I think that having a more ambitious oversight role will serve well the evolution of our mobility options and integration in this province.

I think that ride-hailing, lest anyone think I’m against it, can really be a positive contribution to transforming mobility in British Columbia. I think that the regulations adopted to launch this phase of our evolution in mobility are very important because they can enable more sustainable transportation for all British Columbians going forward.

I thank you for considering my views, and I’m happy to follow up with any questions you might have.

R. Kahlon: Thank you for your presentation. Obviously, we’ll go through this in more detail, but you laid out three staples of good transportation systems, good planning systems, in your appendix here. No. 1: “A sustainable transportation system is one that….” You know, A, B and C. And you have: “Limits emissions and wastes within the planet’s ability to absorb them.”

Right now Vancouver has the cleanest taxi industry in North America. They’re required to have either a hybrid or an electric car. The city of Vancouver has that rule that they’ve put in place.

How do you see this with TNCs around the world, with societies that are trying to grapple with increased congestion and address GHG emissions and so on?

A. Perl: Well, I think that…. Again, because British Columbia is such a huge and diverse place, the standards that are needed for vehicle emissions are actually variable in the province. I think in the Lower Mainland, if we want to keep our municipal and provincial goals about moving toward greenhouse gas reductions and also move beyond carbon-based energy, the approach of having a fleet that is modern, that uses the latest technology and that is encouraged to be a leader in alternative energy sourcing would be a valuable way to go.

[2:50 p.m.]

Whether it is an absolute mandate or whether there are incentives in place for that kind of technology uptake is a regulatory option that you can go in.

Again, I don’t think that…. In my experience, the places that take the hands-off approach will lead to that happening automatically. In many parts of the developing world, the fares are very cheap and the service is plentiful, but the vehicles are quite polluting, and I would hate to see that option evolve as an unintended consequence. I don’t think anyone would intend that to happen. But without some time of framework to keep the progress that we are making and keep it going, it’s at risk.

R. Kahlon: Just to follow up on that, if you come across something or see examples of how it can be effective, I hope you can share something with the committee.

A. Perl: If no one else has mentioned it, I’m sure that I can dig up…. New York City has been, with its taxis, trying to incent all electric vehicles. I’m sure that there’s good information on that, so I will send an email link afterwards to you.

R. Singh: Thank you for your presentation. You talk about affordability, like affordability for the consumers and the organizations that are using it, but then there’s affordability for the drivers also. With the ride-hailing coming in, can you tell us a little bit about how the balance should be? How would it affect affordability for that sector?

A. Perl: Well, I think that there needs to be a floor in place so that no one winds up being worse off who chooses to participate in this local mobility option than they would if they worked at a convenience store or gas station or something like that and had the minimum wage.

I think that it can be tempting for starving artists or other people who see this as a gig, to just think that if they make more money at the end of the day than they paid in gas and deductions to the network company, they’re coming out ahead. But really, their car is being worn out, and they’re the ones who are going to be left with that liability at the end of the day.

There needs to be a system in place, a regulatory system, that has some kind of basic return for each participant, not just for one part of the system. That should include the drivers, definitely, as much as any other part of the organization.

I also think, by the way, that in the transition that goes ahead, because of the way that taxi licensing, at least in the Lower Mainland, works — it may be different in other parts of British Columbia — there are stranded assets that could be created, in the sense of taxi licensing. These are assets that people have, in good faith, invested in.

I think that some regulatory systems…. When it comes time to transitioning off of, say, coal-based, or whatever, energy, there is a mechanism so that the users of the new energy sort of help share the cost of those stranded assets — the old coal-fired power plant or whatever that was supposed to last another 30 or 40 years but no longer is going to be running that long because we want to reduce the climate effects of it.

It’s the same thing, in my mind, with these taxi licences. If we are moving to a future where these assets are worth less and might even become worthless, there is, in my view, a public equity justification for having some form of asset buyback of these licences in a way that could be recovered part of the cost of the asset. I’m not saying people should get whatever the highest value their licence was at the peak of the market, but some mechanism to compensate people for assets that they had, in good faith, acquired and now, as a result of changing policy, are going to be rendered stranded, so to speak.

[2:55 p.m.]

I hope that there can be some consideration, which will actually make the evolution of this mobility easier, because then you won’t have people who feel that they’re being ruined and will resist it at every step of the way.

A. Olsen: My only comment or response is to your story, frankly. I think it depends on your perspective. I wanted to just add this as a counterpoint, I think, to the story that you told about your experience in Nevada, because one of the substantive demographics that I’ve heard consistently is from women, and young women in particular, who have a substantially different perspective on their experience and how the world treats them and their experience in accessing certain services.

I just wanted to add that, because I think it’s important that we don’t just leave it out here that we have a perfect system in here in our training. We’ve got a long way to go in British Columbia.

A. Perl: Certainly. Maybe I’ve been lucky and, of course, being who I am, perhaps I’m treated differently than other users might be in the system, so absolutely not to say that it’s perfect. Perfection is never really achievable, but we should try for it — absolutely.

B. Ma (Chair): I have a question for you, Dr. Perl. I’m wondering. Listening to your presentation, you didn’t come right out and provide a position on it, so I’m going to ask you directly to see if you do have comments on it.

What are your thoughts on managing the supply of vehicles according to demand, either via restricted numbers of licences or per-trip fees or fees per kilometre travelled? What is your feeling around the management of supply, especially around the question of congestion and runaway congestion that might be caused from unlimited vehicles on the road?

A. Perl: I think that I was too implicit, perhaps, in saying that I think there needs to be measures that would encourage supply in places like Kamloops or Fort St. John or Prince Rupert and that would limit peak oversupply in places like the Lower Mainland.

We have enough trouble with our Pacific gateway here and all the billions that have been invested to increase the infrastructure, to flood that with traffic at peak hours that is often created when you have sort of an uncapped arrival of lots of drivers who all want to pick people up at peak hours. That, I think, would be very damaging to our logistics system, not to mention our environment and the general efficiency of the way everyone gets around. But that’s in parts of the Lower Mainland.

I think that the way to approach the issue of supply is to realize that it’s a yin and a yang. Instead of just having your focus be on trying to keep down the supply in certain places, think also where it’s needed to encourage it.

I do think that having whatever fees that are going to be developed for this system to provide incentives for drivers and companies to serve remote and rural parts of the province, which they will be less likely to do on their own…. And the affordability of what they would charge someone to get to a health appointment or a school trip in Fort St. John is likely to be a lot higher than maybe the people could afford there. So I’d like to see some sort of balancing mechanism there so that some of the fees that are collected and whatever mechanisms are developed here wind up helping people to get where they’re going, where they really need some alternatives outside of the Lower Mainland.

B. Ma (Chair): Do you have a suggestion for what that mechanism might be? Or am I putting you on the spot?

A. Perl: Well, I think that the principle should be some kind of a fee system that takes the social benefits of not flooding the existing infrastructure with congestion at peak periods in the Lower Mainland and having some of that revenue be applied to helping encourage ride-sharing and ride-hailing services in places — as I say, in rural and remote British Columbia — where seniors, students, people who can’t afford a car will really benefit from having those options available to them.

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

I don’t see any, so I’m going to let you go. Thank you so much, Dr. Perl, for joining us today and for answering our questions.

A. Perl: It’s a pleasure. Thank you.

B. Ma (Chair): Now, I understand that we are running a little bit early.

Mr. van Hemmen, are you ready to go? Well, if we take a five-minute recess, would that be all right? Okay. Let’s take a five-minute recess, and we will reconvene at 3:05.

The committee recessed from 3 p.m. to 3:06 p.m.

[B. Ma in the chair.]

B. Ma (Chair): Our next presenter is Mr. Michael van Hemmen from Uber.

I know that you’ve probably been here watching already. As you know, I will set a 25-minute timer for you. Following your presentation, we will have 20 minutes for questions. If you finish your presentation early, we’ll just roll the rest of your time into questions. Do you have any questions for us before we begin?

M. van Hemmen: Sounds great, Madam Chair.

B. Ma (Chair): Please proceed.

UBER

M. van Hemmen: My name is Michael van Hemmen, and I’m pleased to represent Uber Canada today. I was born in, and work locally in, Vancouver, overseeing Uber’s western Canadian business.

From Uber’s experience in cities across Canada and around the world, we are confident ride-sharing will provide overwhelming benefits for British Columbians through choice and fairness for riders, drivers and businesses. And that can happen alongside a healthy taxi industry.

British Columbians agree. In a recent poll, 80 percent say they want ride-sharing this year, and they want it to be the same experience that people in Seattle, Calgary and Toronto have. All told, between 2016 and 2017, half a million residents and tourists opened the Uber app in B.C. looking for a ride. To that end, we are pleased to address the four areas the committee is studying.

I’ll begin with some general comments on transportation. In B.C., residents have free and efficient movement between municipalities and regions. Depending on where one lives, there may be a variety of transportation options, but British Columbians, even Lower Mainland residents, predominantly choose to drive cars and to drive alone. That requires us, as a society, to use a lot of land for parking — land we could be using for housing, urban green space and other amenities.

From a transportation perspective, Uber is looking to change that mindset and write a new rider-and-driver-focused chapter for B.C. transportation. We want riders to have more sustainable, reliable alternatives, providing economic and fair alternatives to driving, especially driving alone. Through our app, Uber wants to be able to fill more seats in cars on the road by efficiently matching riders with drivers and showing riders how they can access other alternatives such as transit, e-bike-sharing and e-scooters — all in a single app.

From a labour perspective, Uber is also looking to expand opportunities for working people. Everyone who meets appropriate safety criteria should be able to participate in the transportation sector. Drivers should have the same opportunities for choice and for fairness as riders.

Foundationally, boundaries or area-of-operation restrictions create transportation barriers. They are like a wall. Boundaries in the Lower Mainland force drivers of passenger-directed vehicles — which are inclusive of taxis, limousines and soon-to-be ride-sharing or transportation network services — to deadhead back to their area of operation. This increases congestion and environmental impacts, reduces driver earnings and has led to some riders being refused trips because the driver wasn’t sure that he could get a return trip home. Boundaries need to go.

[3:10 p.m.]

Even if boundaries were to be extended to the regional level, where should the line be drawn? Drawing the lines at Metro Vancouver’s boundaries would still create challenges. If a ride-share is going between Aldergrove and Abbotsford, should it not be able to return full? The same goes for a ride between Goldstream and Sidney on Vancouver Island or Squamish and West Vancouver. Anywhere a boundary is drawn, it creates a barrier that hurts the driver economically and adds traffic to our roads. Now is not the time to build walls.

No jurisdiction in Canada with permanent ride-sharing regulations has area-of-operation restrictions for ride-sharing drivers. However, it is noteworthy that these same regulators have maintained area-of-operation restrictions for taxis. This was largely due to taxis’ own lobbying, seen to maintain the licence value associated with its region, and some interest in retaining street-hail vehicles in suburban centres. While we generally believe having no boundaries makes for good policy, we ultimately do not want to speak one way or another for the taxi industry, which is structured differently.

Our recommendation is that this committee encourage efficient transportation. Geographic boundaries should not apply to transportation network service drivers. If this committee is to consider boundaries for TNS drivers, it should seek the largest geographic area possible that does not cut within regional populations.

The public convenience and necessity regime has led to a complete lack of competition in the passenger-directed vehicle sector. In the last 30 years, there has been no new taxi company — let alone ride-sharing company — operating in the city of Vancouver. That is unfair to people who want to participate as drivers, and it is unfair to riders who need readily available and affordable transportation. Routinely, existing operators use the public convenience and necessity test to prevent new entrants by arguing (1) that there was or is no public need for additional service and (2) that even if there is a need for additional service, only existing operators should be the ones allowed to provide it.

As recently as 2017, the four Vancouver taxi association members from the city of Vancouver successfully opposed Ripe Rides’ application for 150 taxis before the Passenger Transportation Board, arguing, amongst other things, that there was “no public need.” Less than a year later, they lobbied for and received a 15 percent increase in their own fleet size. It’s hard to see how unfair decisions like these serve the public, both as riders and as aspiring drivers.

If TNSs are subject to the public convenience and necessity regime, there is a significant likelihood that only taxi-affiliated entrants will be allowed to operate. As stated by the government’s own consultant in his 2018 report, it is suggested that British Columbia consider replacing the public convenience and necessity rules presently governing B.C. As such, we recommend: allow new entrants. The public convenience and necessity clause, which historically has been used to limit innovation, choice and fairness in B.C.’s transportation system, should not apply to transportation network services.

This also leads us to our third recommendation: allow ride-sharing apps to function normally, using flexible price to balance supply and demand, providing more choice, transparency and fairness. As highlighted earlier, transportation demand varies throughout the year, week, day and hour. Uber has shown that riders can reliably receive a ride in five minutes or less due to flexible pricing and allowing any qualified driver to participate in ride-sharing.

Flexible prices and an uncapped supply of drivers help to ensure reliability. Here’s a case study of Toronto. There are about three million cars in the GTA and a little over one million in Toronto proper. Of those, 70,000 are affiliated with Uber. That sounds like a lot and raises some eyebrows amongst transportation folks, but let’s think about it from a public policy perspective. We should hope that actually every car would be available to have more of its empty seats filled.

Even still, of those 70,000, how many are on the road at once? In the month of October, we saw a maximum of 7,700 Uber partners on the road at one time, and it was at 11 p.m. the Saturday nearest to Halloween — one of the least congested times of the year but one of the busiest times of the year for Uber. The average number of vehicles on line at one time was about 3,500. The minimum in October on an early Monday morning, just after the Halloween weekend, was 500.

Moreover, these cars weren’t focused in Toronto’s downtown core. Only 11 percent of trips in October had their pickup and drop-off downtown, and 70 percent of all trips did not touch the city centre. As such, the benefits of flexible supply and price, as outlined by TransLink and as part of the ride-sharing business model, are well-founded and include reliable service in suburbs and outer reaches of cities, not just downtown, as shown in this time-lapse map of pickup locations in Toronto over time receiving a five minute wait time or less.

[3:15 p.m.]

More supply to serve late night and peak times. The price may increase from time to time, but it encourages more drivers to come out and serve the demand. This reliability provides riders with a safe alternative to driving and is a key reason why public service organizations like Mothers Against Drunk Driving Canada strongly support having Uber available alongside the existing taxi industry. Flexible pricing as well allows for a variety of options, from standard cars to luxury electric, that may cost more to acquire or more to operate.

Finally, flexible supply and price are required to grow the network to allow pooling. Let me pause on that for a minute. UberPool can only occur when two things happen.

First, there have to be enough Uber trips happening that they are occurring along a similar route at the same time. This means that there need to be enough drivers in the network that it has grown to a size where riders are using the service with frequency. Otherwise, there aren’t trips happening at the same time in the same location to match.

Second, there needs to be price flexibility to incentivize riders to give up some convenience and to choose to share a ride with another rider who is going along a similar way but not an identical route. Without that incentive, you’re relying upon a rider’s altruistic nature in order to share a ride with another rider. Many fewer are willing to do so.

No city in North America — not even New York City, with its unique rules — restricts the fleet size or places caps on ride-sharing companies. The only price restriction is a minimum fare to ensure transit affordability. In some cities in Canada specifically, the minimum fare that must be charged is either the price of a transit ticket or a little bit higher than the price of a transit ticket.

To put in place additional restrictions on fleet size or price would (1) encourage longer wait times, (2) encourage drivers to focus their service in the downtown core, (3) prevent first-mile, last-mile solutions in suburbs, (4) prevent some working people from accessing the opportunity — no pooling products and replicating the taxi industry by creating artificial scarcity and licence values. The Passenger Transportation Board should not be permitted to apply fleet size to transportation network services.

To our fourth recommendation: just and uniform pricing, as described in the act, should be focused on price transparency rather than price controls. As I have just outlined, pricing flexibility is needed to enhance affordability and ensure reliability and to compete with personal car ownership. By allowing any company that meets the qualifications to operate a transportation network service to start up, to partner with a flexible supply of driver partners and to have flexible pricing will lead to better outcomes for riders and drivers.

For riders, choice and competition lead to lower prices, better customer service support levels, innovative features such as UberPool, safety features like “share my status” and a range of service offerings, from luxury to affordable, at the price range that the company believes is appropriate to meet its own expectations for a return.

As independent contractors, taxi and ride-sharing drivers will also now have more options and more power over whom they can partner with. They can drive their car with Uber or a ride-sharing competitor or rent a taxi for a shift or all of the above.

With choice and competition for their services from transportation network services and other passenger-directed vehicle companies, drivers can experience more flexibility, higher incomes, better support levels and innovative features such as daily pay and tools to allow the deaf and hard-of-hearing drivers to participate. Companies will establish pricing that allows them to make a reasonable rate of return and attract drivers while serving their customers. Through more choice and competition, there’d be increased power for drivers and riders.

It’s worth noting that ride-sharing with flexible pricing and no supply caps coexists alongside taxis in cities across Canada. For example, a staff report highlighted that within the city of Brampton, the demand for traditional taxi services has “remained consistent, notwithstanding the entry of ride-share services throughout the GTA.” Staff continue: “The impact of ride-share companies is lower in comparison to what has been presumed and verbally reported.” Taxi business continues.

But what about ride-sharing’s impact on labour? The Brookings Institution and University of Oxford have looked at U.S. and U.K. data and found that platform-based freelancing has augmented, not contracted, wider employment. As independent contractors, drivers earn from the trips they complete, rather than an hourly wage.

[3:20 p.m.]

This provides them with maximum flexibility and aligns incentives between the transportation network services, riders and drivers, as they are paid by riders for services they provide.

When it comes to comparing ride-sharing earnings to taxi earnings, research by noted Princeton labour economist Alan Krueger has found that, taking expenses into account, the average Uber driver partner is likely to earn at least as much per hour, and probably more, as the average taxi driver and chauffeur.

Professor Krueger also noted that the vast majority of ride-sharing drivers participate occasionally. This makes sense, as he noted that 80 percent of Uber ride-sharing drivers had other primary forms of income. Female drivers were more likely to highlight the need for this flexibility, with 42 percent saying that the major reason for driving with Uber was that they can only work part-time, on a flexible schedule.

We believe the best way to ensure that drivers are safe on the road is (1) to ensure that they have the experience behind the wheel, (2) to look at their previous driving history and (3) to have an easy-to-use feedback system for riders to flag any concerning behaviour they observe on the road.

In reality, tests can only check a moment in time, and people know how to perform against a test in a way that doesn’t always reflect their actual day-to-day behaviour.

Accordingly, our final recommendation relates to drivers’ licences. All passenger-directed vehicle drivers — that is, taxi, limo, ride-sharing drivers — should be permitted to use a standard class 5 licence if the driver meets strict annual driving history checks, similar to rules in Saskatchewan, Manitoba and Ontario and across the United States.

By a 3-to-1 margin, Lower Mainland residents agree. Drivers with any driver’s licence and a clean driving record should be allowed to participate in ride-sharing. This makes sense. Drivers are using their personal cars, which they drive every day. There is little difference, as it relates to driving safely, from pulling over to have your kids, friend or partner get into the car and head to your destination than it is to pick up an Uber rider and go. Transportation network services are able to add additional safety features such as driver rating systems, 24-7 feedback and telematics through phone sensors to enhance safety.

Requiring commercial licences creates an unnecessary barrier for many. For example, women only hold about 15 percent of commercial licences in B.C., while they hold 50 percent of standard class 5 licences. In Alberta, a province where class 4 licences are required for taxi and ride-sharing, women hold a similar number of commercial licences as in B.C., and as a result, in Calgary, they only represent 1 to 5 percent of the ride-sharing and taxi drivers. Conversely, a study by a Stanford professor revealed that almost 30 percent of U.S. partners in the U.S., where standard licences can be used, are women.

Finally, B.C.’s medical check requirement is an additional barrier for the deaf and hard of hearing. In Ontario, Uber has hundreds of partners from this chronically underemployed group. Our technology enables these class 5 licence drivers to participate in the economy and in a sector that B.C.’s medical checks currently prevent.

The medical check component of the class 4 licence is also particularly unnecessary. Medical practitioners in B.C. already have a legal obligation to inform ICBC if an individual is diagnosed with epilepsy or some other condition that would impact driving behaviour. This makes sense, because all of their driving might be impacted if they have epilepsy and have a seizure, whether they have a paying passenger in the back seat or not.

Any legal requirement for driver licensing or training truly should be focused on safety and human rights training rather than customer service that can be managed much more effectively through technology and customer-specific customer service and company-specific customer service policies.

Beyond our comments on driver licensing, it is worth noting that training is needed in some important areas that are unfamiliar to drivers. The primary example of this is acceptance of people with service animals. TNS or taxi operators should be required to have a system in place to ensure that their drivers are informed of how to serve those with assistance animals or other needs. The operator should have the flexibility to manage this education themselves or through a third party and to provide it on line or in person. In Canada, Uber has partnered with CNIB to design educational materials for drivers to ensure that they understand their legal obligations.

In summary, B.C. should allow a class 5 licence for drivers with a minimum of two years of experience and no more than 12 demerits in the past three years. Annual driver checks should reinforce safety and ensure that only drivers with good, safe records can drive a passenger-directed vehicle.

[3:25 p.m.]

To conclude, B.C. is nearing the final steps in either bringing ride-sharing to B.C. or closing the door to services like Uber. Other provinces and cities have shown that it is possible to expand choice and fairness by allowing ride-sharing and taxis to coexist.

We hope this committee will consider the best practice and encourage efficient transportation. Geographic boundaries should not apply. Two, allow new entrants, and public convenience and necessity restrictions should not apply to TNS, or transportation network services. Three, allow ride-sharing apps to function normally, using price to balance supply and demand. Four, require price transparency. Five, permit passenger-directed vehicle drivers to use a standard class 5 licence if they have the experience and pass strict annual driver checks.

British Columbians are firmly in support of the policy proposals we have put forward today. They want the same options that are available in Toronto, Seattle and Bellingham, where taxis and ride-sharing coexist.

Thank you for the opportunity to engage with this committee. I look forward to answering your questions.

B. Ma (Chair): Wonderful. Thank you so much. We’ll begin with a question from Mr. Johal.

J. Johal: I just have one question. Thank you for your presentation. You raise the issue of boundaries. You raise the issue of class 4. So a simple question from me, actually. If boundaries were introduced — let’s say along municipal boundaries — if class 4 was introduced, would Uber operate in the Vancouver, British Columbia, market?

M. van Hemmen: Uber will have to look at the regulations holistically as they come forward, but boundaries in particular are very problematic for how transportation works. I think all members of this committee would want to see and ensure that drivers earn more by not having to drive empty — that we reduce congestion and environmental impacts by not requiring people to drive back empty. So I’m optimistic that, hopefully, on that issue, there will be consensus.

J. Johal: Have you had to work in a class 4 environment?

M. van Hemmen: Uber does operate in a class 4 environment in Alberta, where there are permanent regulations that require that, and there are impacts. One example is that you see less female participation in driving. The other impact is that you can serve large centres, but smaller centres are much more difficult to operate just because there are a lot fewer people who are willing to go through the steps for what is, for many people, an occasional opportunity.

They’re very safe drivers. They have great driving records. You would drive with them. You would let your kids drive with them to soccer. But at the same time, the rules right now would prevent them from ride-sharing. So what we’re saying is: safe drivers, standard licences — but only standard licences for drivers who can prove that they have that safe driving record.

S. Chandra Herbert: You mentioned that Uber operates in a couple of communities that have a minimum fare. What communities are those, and what kinds of impacts does that have, do you believe?

M. van Hemmen: In the jurisdictions that do have that…. If I’m talking about Canada specifically, because I’m most familiar with that, Toronto does, Edmonton does as well, and Saskatoon just recently passed regulations to have one as well. Most of them have a minimum fare at what the transit ticket cost is so that ride-sharing doesn’t become more affordable than transit.

I think TransLink kind of provided a similar comment — that they would want to see a minimum fare slightly above where the transit ticket cost is at. And I think, you know, if you’re doing that for a two-zone type of fare, that’s not unreasonable.

S. Chandra Herbert: And the question of congestion pricing? I think Uber operates in a number of jurisdictions where they have a congestion charge because of that challenge. Do you think that congestion could become an issue or is an issue in a couple of communities? What do you think around congestion charges?

M. van Hemmen: We would be strongly supportive of what TransLink put forward today. The first point would be that when you’re looking at congestion, you actually have to look at all vehicles on the road, right? So ride-sharing vehicles, even in the cities where we are very large relative to where we are in Vancouver — where we’re not, at present — are only a couple of percent of vehicle miles travelled in a city.

If you think targeting ride-sharing directly is going to impact congestion immediately or even over the short term — probably not. But at the same time, we do see jurisdictions doing this — putting in place a charge or per-trip fee, kind of like what TransLink laid out, really with an eye towards: what is the long term going to be looking like, and does the government have tools in play to help manage some of those impacts that you talked about?

I think those are discussions that we’re very much open to and willing to be a part of. And I think that what TransLink put forward today is exactly the type of recommendation that this committee should be considering.

[3:30 p.m.]

B. Ma (Chair): Any other questions?

A. Olsen: Yeah. Just to the point that was made by the gentleman from the Canadian Centre for Policy Alternatives earlier today. I think it was that for every car that came off the road — I think you were here for his presentation — 2.8 are added. What is your…? In terms of congestion, just following up on what Spencer was just asking about….

M. van Hemmen: I’m unsure of exactly what numbers he was referring to. If you were to look at Uber as a whole, similar to, say, the car-sharing industry…. If you were to look globally, we have about one driver affiliated with us for every 30 active riders in a month. So absolutely, we’re becoming a part of people choosing to not drive. Really, in urban centres where you have lots of choices — like in Vancouver, where you’re able to car-share or bike-share — we’re just one more opportunity for you to not own a car.

I think we now even stretch that out beyond the kind of downtown cores or the city cores out to suburban areas. For my wife and myself, we have three kids. Our youngest is four and doing soccer now, or this spring, he’s going to be doing soccer. We’re like: “Crap. We only have one car.” There are three kids now. Our two sons are in soccer, and our daughter is in field hockey. We can walk to SkyTrain, but that doesn’t really help us get to and from where we need to go all the time. What ride-sharing provides the option for is that we then don’t need to buy that second car, right?

If you don’t have the caps in place, there will be the service that you require in the suburban areas, as well, and beyond that will be able to ensure reliability to allow people to make more sustainable choices.

B. Ma (Chair): Just for clarity, I believe the numbers he’s citing came from a report known as the Schaller report. It was developed by a consultant in New York City.

M. van Hemmen: The Bruce Schaller report.

B. Ma (Chair): That’s right. That’s where that 2.8…. I’m very familiar with that piece of work.

R. Kahlon: Thank you for the presentation. You’ve talked about your kids and that ride-sharing will be able to help transport them. Would you feel comfortable letting your child get in a car with somebody who hasn’t done a national criminal record check and perhaps hasn’t done any extra driving experience for class 4? You’d be comfortable with your kids…?

M. van Hemmen: First off, my children are four, seven and nine, so my wife or I is going to be with them. We’re not going to be sending our four-, seven- or nine-year-old in a ride-sharing vehicle or even a taxi by themselves. Brenda would kill me.

I think the flip side of that is that ride-sharing drivers across Canada, even before we were regulated, go through a background check against the same RCMP database that drivers in Vancouver go through. In fact, in the city of Vancouver, to date, a chauffeur permit requires a criminal record check every two years. So your taxi driver in Vancouver has to go through a criminal record check every two years.

The standard that we’ve been operating since we launched is every year. So the government will be putting in place, with the criminal record check, standards, or those disqualifying criteria, that if you have this type of conviction or pending charge, you aren’t able to participate. We have views on that. We want to be part of that discussion. But that’s a reasonable expectation, and those should be the same standards for a ride-sharing driver as they are for a taxi driver.

To your point, people want to have a safe ride and ensure that people who we know have made bad choices in the past aren’t put in situations where they can necessarily make those again.

B. Ma (Chair): All right. Any other questions from committee members?

J. Sturdy: I wondered if we could get a copy of your presentation.

M. van Hemmen: For sure. Sorry I didn’t print them out ahead of time — 47 slides. I’ll send around the full PowerPoint.

S. Chandra Herbert: I understand that Uber in other communities has a two-year driving experience minimum. Is that cumulative, or is it just that you have to have had a licence to drive for two years? For example, I had a licence at, I think, 17. I didn’t own my own car, so I didn’t really drive much for a couple of years, yet I had a licence for number of years. How do you deal with that issue?

M. van Hemmen: It’s a different standard in different locations. We’re recommending kind of a bit of a combination of what is done in B.C. today with class 4 and then what Saskatchewan has proposed with this two-year requirement.

Across Canada now, we don’t have the two-year history. We have a minimum age of 21, so you have to have a full driver’s licence for your jurisdiction and be at least 21 years of age and then meet the safe driving criteria that we have.

Here in British Columbia, what we’ve done when putting forward this recommendation is looked at what ICBC re­quires for a safe driving history check in order to get a class 4. As you heard the government officials say this morning, it’s four accidents with demerits or four tickets with demerits.

[3:35 p.m.]

That’s pretty broad. What we’ve said is, in fact: what if there’s one incident, but you got six demerits because it was a serious, serious incident? So we said that instead of moving to a number of incidents in a time frame, let’s move to 12 points in a period of look-back. And then add in that Saskatchewan requirement that you have two years of driving experience, just because our experience across Canada leads us to believe that that will lead to a higher level of safety amongst the drivers who are able to access the platform, whether they’re a taxi driver or whether they’re a ride-sharing driver.

B. Ma (Chair): All right. Are there other questions? I have a few myself.

Continuing in the same vein as the question about class 4 versus class 5, you mentioned 21 years of age. Class 4 re­quire­ment is 19 years of age, so it’s actually even more flexible than that. You mentioned two years of driving experience. That’s the same as the class 4 requirement. You mentioned a driving record of 12 points. The class 4 requirement is actually less than four points.

M. van Hemmen: It’s not four points.

B. Ma (Chair): Oh, is it?

M. van Hemmen: It’s four incidents.

B. Ma (Chair): Four incidents with points. Okay, interesting. That’s not what I heard, but I trust that you’ve taken a look at it.

And then no motor vehicle–related Criminal Code…. This sounds very similar to your natural requirements anyway.

M. van Hemmen: Correct.

B. Ma (Chair): No fines and debts to ICBC. Of course, I understand that’s probably more ICBC’s business.

Is it the road test and the knowledge test that Uber is opposed to?

M. van Hemmen: I think you actually kind of hit the nail on the head there. I guess what we’re trying to do is say: where are the regulations that you’ve already met the requirements but you’re being made to jump through additional hoops in order to get to the end state, which would necessarily be the same anyway?

The medical check is a perfect example of that. Doctors already have to snitch you out, in effect, to ICBC if you have a medical condition. It doesn’t matter if someone in the back seat is paying you or whether you’re driving by yourself. If you have a seizure, you’re going to cause an accident. Right? So either a medical check should be required for all drivers, because that’s a safety issue about drivers on the road, or it isn’t. The government has laid out a process to check that in advance beforehand.

With regards to the safe driver criteria, I think that’s exactly right. What we’re proposing here today is very similar and, in fact, stricter than what’s required by the class 4. But what we’re saying is that that can be done not through a new licensing system where you have to go in and apply for a new licence. Instead, you can get your driver’s abstract from ICBC on line in, like, two minutes.

If you were to come in — we do this right now with UberEats — right now and wanted to partner with us, we can receive your documentation officially from ICBC, and we can have that completed and checked in a day. For you to go through all the steps of a class 4 requirement will take weeks, if not a couple months. Plus, there’s the additional cost of that.

We’re not saying: “Let’s lower standards on safe drivers.” Absolutely not. What we’re saying is: “Let’s find ways that we can streamline rules to encourage more people to participate and fill up their empty seats.” It’s like when you look at car-pooling, as an example. Car-pooling used to be very difficult. Well, now, through technology, it’s possible. But if we make it difficult for those drivers to accept another ride, well, they’re not going to do it. So let’s find ways to streamline that and make it more efficient.

B. Ma (Chair): The piece that you’re proposing to streamline is that you don’t want medical tests for commercial drivers. You don’t want the knowledge test and the additional road test.

M. van Hemmen: That’s right. The testimony, as represented by MOTI this morning, identified that they’re effectively the exact same tests that you wrote before, with the exception of vehicle walking around and showing that you know how to check the lights and that the brake lights are working.

B. Ma (Chair): I believe MOTI had said that there were likely more specific requirements and slightly different things that they also asked for, but we’ll get clarification on that, because I know members had questions about it.

Your comment about requiring the same licensing or that we should allow same licensing for commercial drivers versus casual drivers or personal drivers…. I’m going to use that term “personal,” “casual” — non-commercial drivers. One analogy that I’ve heard used is that any driver that drives normally should be able to drive commercially because it’s the exact same risk to themselves or to anyone else who is driving with them. By that logic, anybody should be able to run a restaurant from their home kitchen.

[3:40 p.m.]

Do you have any comments? How do we reconcile that?

M. van Hemmen: I would say the driving…. I think, with the example that I gave around service animals, that we’re in favour, very open to discussions with regulators. Already, even when we’re not required to, we engage in education of driver partners in areas that are unfamiliar to them. When it comes to driving on the road, a red light is a red light. Merging in and out of traffic is something that you need to understand and that, hopefully, you know how to do safely already. If we’re able to verify this, through your driving record — you have a driving record; we’re able to check that driving record — and then layer 24-7 feedback systems on top of that, we have a pretty good picture of who you are.

The alternative is that you have those kinds of similar checks beforehand, you have a test at one point in time, and then you go on forever. As the other member identified, you might not have driven for a very long time. There’s a whole host of things that aren’t checked in real time, beyond one point in time.

With ride-sharing, you have a feedback loop that allows you to be informed the entire time. I would say that I wouldn’t use the analogy that you were using.

B. Ma (Chair): In the analogy, it might be: if you allow a parent to cook food for their child, why not allow that same parent to cook food for everyone on a commercial basis and open a restaurant out of their home? Why…?

M. van Hemmen: The difference is that there hasn’t been a government test before.

B. Ma (Chair): I know it’s not a perfect analogy. I’m just trying to reconcile things.

M. van Hemmen: No. Where it falls apart, I think, is that there isn’t a government test beforehand that says you’re allowed to prepare food safely, whereas here you’ve gone through a government test that says you’re able to drive safely.

B. Ma (Chair): I appreciate that. Thank you.

My last question is about the $6.79 cost that you had flashed up on the screen. You’d mentioned that, provided that a driver’s cost is less than $6.79 per hour, they are likely to earn more than taxi drivers.

M. van Hemmen: It’s from the Krueger study, yeah.

B. Ma (Chair): I’m assuming that includes all their costs, their insurance, the wear and tear on their car, and so forth.

M. van Hemmen: Yeah, and the depreciation.

B. Ma (Chair): Usually standard mileage rates, when people submit expenses for mileage and so forth, are set to account for the gas, the insurance, the wear and tear, and so forth. I think it’s around 50 cents per kilometre right now. Based on that, we’re looking at about 14 kilometres per hour, maximum, that they’re driving.

M. van Hemmen: What Krueger did was that he looked at a range, because the 50 cents or 52 cents that you’re referring to is CRA’s tax reimbursement. What they’ve done is they’ve basically taken an average across the entire country.

What Krueger did is that he actually broke it out. Maybe it would have been, actually, better for my framing if I would’ve highlighted it. Costs typically range for drivers. His estimate was a range between $3 to $6.79 an hour. That’s largely based upon where you’re operating and what type of vehicle you are operating.

If you think about it, if you’re driving with our luxury product, like driving an Uber SUV — you’ve got a Lincoln Navigator, and you’re taking groups of people — your costs are higher than if you’re driving a Toyota Prius, which has lower operating costs. That’s kind of where that range came from. It wasn’t using just the tax average. He actually broke out the two things. I’d be happy to provide that study to the committee for analysis.

B. Ma (Chair): Okay. Thank you so much. Are there any other questions before we close off?

S. Chandra Herbert: Back to the question of drivers licensing, I guess. With class 4, the concern really is that you have to come to do the test and the TaxiHost program potentially as well — the Justice Institute, and so on — and that you feel that would restrict your total amount of potential labour. Is that the concern? And make it so that certain people — I guess the example you gave is women — wouldn’t be part of that, because they don’t already have class 4, and it’s an additional barrier.

Now, if some of this can be offered on line…. I think there is a value to education, and certainly in doing the work. I know in the tourism industry, for example, one of the big concerns is that people know the local neighbourhood. They get the region. They understand boundaries. They can talk about the region; they can be good ambassadors. Is it your expectation that companies would just want to do that, and that if they don’t, well, oh well…?

[3:45 p.m.]

I’m just trying to figure out a way to address one of the concerns you have with another concern others have, which is that you want people trained and knowing the region, as opposed to giving a bad name to the region because they don’t know it.

M. van Hemmen: We’ve looked at it generally in that government should be establishing rules for safety and to ensure that service, as it relates to human rights requirements, is enforced. When it relates to customer service, we all compete on that, right? When it comes to price and customer service, we compete on that.

I’d give the example of the city of Calgary and the city of Ottawa. Both did independent studies, and they both trained taxi drivers. In fact, Calgary had a very intensive in-person program for taxi drivers at the time.

What they found, once they did independent surveys, was that both the customer service levels and perceptions of safety were higher amongst people who were referring to Uber services than they were to taxi. In part, it was because rather than a one-point-in-time kind of training, there was the ability to provide feedback across the whole experience. Even if you have a bad experience, which, unfortunately, still happens — we’re people, and people make mistakes — there are accountability and feedback loops to allow for customer service after that fact to ensure that that can be rectified.

Then, specifically on TaxiHost — because that is separate from class 4, as it relates to training — our preference would be (1) if there is any retraining requirement, that it be on line; (2) that it relate to activities that are actually unique to the experience, such as what I talked about with service animals or with other populations, perhaps, who need additional attention, but that it not be a requirement for in-person hours and that it not be focused on the number of hours that you do. It’s like you’re just checking a box, but it actually should be focused on how you can actually meet that need that the public has, and meet it effectively.

That way, as you point out, it can be done easily on someone’s time, as opposed to having to go in when you might have another job, and to say: “Hey, I’m willing to pick someone up through the driver-destination feature that Uber has. I’m only picking someone up as I’m going downtown on my commute. I’ll only take someone back when they’re going in the same direction as I am, and when I’m not going far off my route.” We have the ability to match like that, right?

People aren’t willing to do that if they have to go through a lot of extra steps, so we need to look at how to not create additional barriers to people filling up seats in their cars in that kind of way, while still ensuring accountability and high customer service. We’ve found that through feedback loops, through technology, is the best way to do so.

S. Chandra Herbert: Just a follow-up. Does Uber, in other jurisdictions, do education, have requirements around education and around similar things they are required to do?

M. van Hemmen: Yeah, two examples. One is national, and then one is more local. Nationally, we have a partnership with CNIB around service animals, which I’ve talked to. A second one, which I think is very relevant for Vancouver as well, as I cycle from time to time, is bike safety, right? In certain cities in Canada, that’s less relevant, but it’s super relevant here, where we have such a high percentage of people who are actually on bikes.

Now, all drivers…. This is actually training where perhaps your ICBC should be more integrated into the licensing system, but it’s something that we believe strongly about. Share the Road in Toronto is a group that we’ve partnered with in order to build education materials for drivers around that — like, doing the Dutch reach when you’re going out your door to ensure safety.

Those are two examples that are kind of unique to the use case but aren’t focused on: “Do you know specifically where this address is in PoCo?” You don’t need to, because GPS will take you there. If you’re going the wrong direction, as a gentleman identified, your rider is quickly going to tell you: “Hey, on my GPS, you’re going the wrong direction. Let’s turn around and head to PoCo.”

A. Olsen: As I have been introduced to the subject, I’ve had a number of conversations with people about it, obviously — a growing number of conversations, frankly — on various aspects of the industry, how it has impacted communities in the United States and the wide-open approach or a more regulated approach. The advice that I’ve been given is to be very, very careful. The position that we’re in right now is one where many jurisdictions around envy the work that we’ve got ahead of us right now.

[3:50 p.m.]

They recognized — and I argued this when we were going through Bill 55 — that we’ve got to find a way to be able to have an industry operate in our province but, as well, recognize that there’s a regulatory framework that we have a responsibility for, for our constituents.

From your presentation, I don’t know that I get the sense from Uber that any of that experience has coloured the advice that you’re giving us, in the sense that it’s basically just we need to continue with a completely…. There seems to be this disconnect between the experience that Uber has had, the stories that exist…. But not only that — the highly qualified people that I’ve talked to, that have provided advice to me over the last number of months that I’ve been working on this file….

I guess, for me, I just want to leave that with you. But I’d also like your response to that. Basically, you’re here saying we need to have all of the five points, or all the four points that we’ve asked. The five points that you gave us were: just leave the door open for us. That’s the impression that I got from your presentation.

M. van Hemmen: I appreciate the feedback. I would say that’s not my intent with which to leave you. Because, I think, when we’re looking at jurisdictions across North America, ride-sharing…. It’s grown very quickly, but it’s still very new. So lots of the learnings that jurisdictions are having, as they are with any new industry: as you learn, you adapt.

I think a lot of the recommendations that…. Even like the one that TransLink put forward today, saying there shouldn’t be a fleet size restriction or caps, that there should be price flexibility. But what you should do in those instances is have that fee that allows for flexibility to help shape that usage, in an example. I think that’s something that Uber wouldn’t have…. It would’ve been a different conversation a few years ago with us on that, understanding how cities are wanting to do that. We want to be a partner with cities and regulators. I think that’s the perfect kind of example where we’re doing that.

Then the same thing with the drivers’ licensing. We’re not saying: “Hey, let’s, willy-nilly, let anyone on.” That isn’t in our best interest or in cities’ best interests. What we’re saying is: “No, let’s ensure that drivers who, first, have experience and, second, that you can verify are safe drivers are the ones that are able to participate.”

I hope that in the written comments, at least, that I provide that that nuance will come through more clearly to you. Hopefully, we can continue to have further conversations about that, because I think all of these questions that you’re asking are good questions. We’re happy to be part of the conversation and really appreciate to be given the opportunity to have our voice heard.

B. Ma (Chair): Thank you so much, Mr. van Hemmen — really appreciate you coming to present to us again and appreciate your time and your patience with our questions.

That concludes our witness list for today. I understand that members do have…. There have been several specific, data-based questions that we weren’t able to get answered today for ICBC, the Passenger Transportation Board, and so forth. We’ll collect those questions tomorrow after the hearings, in case more come up.

I encourage members to kind of compile them, if they do have them, just to bring forward tomorrow. Please remember that those questions should be very focused on any data that might be available.

ICBC and some of these other witnesses have been asked to make formal submissions in response to our questions. But if we have specific questions that we want answered, like the number of hours that people typically drive or so forth, which they may or may not have, then those are the kinds of questions that we want brought forward tomorrow.

We’ll be reconvening tomorrow at 9 a.m. in this room again. I hope you all have a wonderful afternoon and a pleasant evening. Thank you so much.

The committee adjourned at 3:54 p.m.