When I first told friends that I was researching Vancouver taxicab regulations, the most common question, bar none, was: “Do you know if Uber is coming back?”
Well I can finally tell them, “Yes, well sort of, but only if you want to order ice cream.”
Between 11 a.m. and 4 p.m. on Friday, July 18, Uber will be delivering ice cream at the tap of a button. A minimum $25 order gets you five pieces of ice cream. For those stuck in the office, an ice cream treat sure beats the standard coffee break.
But for Vancouverites wanting Uber back full time, it’s small consolation. Uber is not primarily a purveyor of ice cream; rather it’s a tech company that matches passengers to car services via a smartphone app.
Users request a ride and then track their car’s arrival using the app’s GPS display. Customers can choose from a variety of vehicles, including everyday sedans, black cars and luxury SUVs. Payments are made through the customer’s credit card, which the app stores for future trips.
The app asks passengers to rate their driver’s performance. The anonymous feedback on car quality, professionalism, and driving ability encourages drivers to improve service levels. Customers are also rated by drivers, and the dual rating system incentivizes both parties to be on their best behavior.
For a time, Uber was actually connecting Vancouver passengers and drivers. For a city that has some of the highest fares and longest wait times for taxi service, Uber was welcome competition.
Uber began Vancouver operations in May of 2012. At the time, the company was operating in “secret mode”, which meant only a limited number of vehicles were on the road. The soft launch helped build Uber’s cachet without overwhelming service capacity.
Uber’s first two Vancouver passengers were Reiko McKenzie of Real Housewives fame and Ryan Holmes the founder and CEO of HootSuite. The company generated goodwill by offering free rides to notable events in Vancouver like TEDx and Fashion Week, and by showering promo coupons to encourage use.
The party came to a complete halt six months later. Responding to complaints from the incumbent taxi industry, the provincial regulator issued a notice stating that smartphone apps connecting passengers and drivers must charge Passenger Transportation Board approved rates.
For Uber, this meant charging the minimum limousine rate— $75 dollars per trip. Since Uber’s business model is based on a lower price point with trips of shorter duration, they pulled out of the Vancouver market. This gives Vancouver the ignominious distinction of being the first and only city that Uber has been forced to retreat from.
Consider what the regulator was asking of Uber: it wanted the company to raise its rates, to turn a popular service into an unaffordable one. It’s akin to demanding that all coffee shops charge a minimum of $9 per cup. It made no sense.
Vancouver Uberites erupted on Twitter. They directed their complaints to Premier Christy Clark, then Minister of Transportation Mary Polak, and Mayor Gregor Robertson. Search #UberVANLOVE to get a taste of the debate.
However, unlike some of the company’s previous social media campaigns that successfully persuaded lawmakers to curtail attempts to block its service, the Vancouver one fell on deaf ears.
The setback has not slowed Uber’s growth and the company now operates in 142 cities and 40 countries around the world. Uber was recently valued at $18 billion dollars, indicating that investors expect the company to service a big chunk of the global taxi market.
Uber is not without critics. Taxi drivers across European capitals have protested the company’s arrival by blocking traffic. Their own customers have complained about the company’s “surge pricing” policy, which increases the cost of a trip when demand is high. The dynamic pricing model meant that some customers ringing in the 2012 New Year were dinged 6 times Uber’s normal rate.
Still, as the company grows, prices are dropping. In New York City, Uber users are now paying less than the cost of standard NYC taxi cab for a trip. For comparison sake, in 2011 a five-km ride in a Vancouver taxi cost 50 per cent more than it would in a NYC taxi. So, if Uber does return to Vancouver, passengers should expect a price that is competitive with the Vancouver taxi companies, if not below it.
I recently sat down in Vancouver with Uber’s GM for Regional Expansion, Jeff Weshler. He will be in the ice cream truck tomorrow, if you want to say hi. While Jeff is happy delivering ice cream around Vancouver, what he’d really like is to restore Uber’s operations in Vancouver. “Customers want choice,” he tells me. “In cities where Uber operates, residents see many advantages, including increased transportation options, a reduced number of drivers under the influence, and reductions in taxi crime rates.”
Jeff believes, “Vancouver should not be left behind, and Uber remains committed to working with the City and the regulator to bring light to the benefits of transportation alternatives.”
But it’s not just Uber and its competitors, Lyft and Sidecar, that have stayed out of Vancouver. Regulations have also prevented local companies like RIPE and the Pacific Coast Drivers Co-op from offering taxi service in Metro Vancouver. The big loser in all of this is the Vancouver taxi user.
At least for one day, Uber’s Vancouver base can lick ice cream instead of wounds. But after tomorrow it’s back to just four taxi flavours (Yellow Cab, Black Top, MaClure’s and Vancouver Taxi), plus the high prices and long waits associated with restricting customer choice.
Date: Friday, July 18
Time: 11 a.m. to 4 p.m.
Cost: Minimum order of $25 gives you five pieces of ice cream plus Uber swag
How to order: Download and user the Uber mobile app – iPhone and Google Play.
Benn Proctor is a graduate of Simon Fraser University’s School of Public Policy and a frequent user of taxis. His master’s thesis is titled “Assessing and Reforming Vancouver’s Taxi Regulations” .
Featured Image: Uber