Hello Uber

I turned the ignition on, like I had a million times before in my black Hyundai with silver trim, and took a nervous breath. My Nexus 5 was secured firmly in its goose-neck mount, facing towards me but low, below the radio so it couldn't be seen from outside. I nervously hovered my hand over the screen, and then tapped the "Go Online" button on the Uber app.

Half expecting a SWAT team, helicopters and a crowd of angry cabbies clutching crowbars, I looked around nervously, but there was nothing going on. The app glowed warmly, the car's motor hummed smoothly and I tried to force myself to relax. I was now an Uber driver.

Uber has caused a storm of controversy around the world, with vicious legal battles culminating in several taxi strikes in Toronto. The service operates in a grey area, using ultra-modern technology to connect riders with private drivers at more than half the price of a regulated taxi. The company started in San Francisco and within 5 years could be found in 54 countries in the world, making it one of the biggest tech giants in the world, up there with Microsoft, Google and Facebook. It is wildly popular with customers and offers a more grassroots, democratized transportation system then the outdated taxi cartels that have existed up until today.

But despite more than 84% public approval of Uber in Canada, municipalities have been fighting to maintain their transportation monopolies. 

The Taxi System

Bylaws across Canada prohibit unregulated transportation in exchange for money, but Uber gets around this by not actually exchanging transportation for money. Instead it charges users (passengers) to use the app, and pays its partners (drivers) a commission as a sort of "thank you". No money is exchanged between the passenger and driver, and in September 2015 an Ontario Superior Court ruled, after the City of Toronto tried to get an injunction against Uber, that Uber was not violating any laws.

Nevertheless bylaw officers and police in some jurisdictions have been going after Uber drivers as if they were hardened criminals. In Guelph the police own and manage the taxi medallion system, so they have a vested interest (perhaps a conflict of interest?) in getting rid of Uber. Uber drivers have been charged up to $500 when caught.

Down the road in Kitchener-Waterloo, which is Canada's technology hub and home Blackberry and Google's Canadian offices, the police are fully in support of Uber as is the city government, and the taxi unions have been left with vigilantism as their only recourse in their fight against Uber. Calgary and Vancouver both outright banned Uber, and we'll see how that works out in the next municipal elections. 

The taxi system in Canada today is a replica of the New York City system implemented in 1937. Regulators issue "medallions" which authorizes someone to drive passengers for pay. The regulators set the prices and control the supply of drivers, which drives up prices. In every city where this system is in place, one or two big monopolies have gained control of all the medallions, which has artificially inflated medallion prices. For instance, in Toronto the price of a medallion reache $800,000 before Uber brought them down to a mere half-million dollars. This means that cabbies fork out their entire life savings, or get expensive high-interest loans from medallion brokers (legal taxi-industry loan sharks) to drive. Then there is taxi insurance which ranges between $12,000 a year to $20,000 a year. This means that taxi drivers are forking out nearly $1,000 a week just to drive. They spend half the week just paying for the privilege to drive, and still need to feed and house their families.

It takes 15 minutes to drive across Guelph. One day last summer Katya and I hopped in a cab to meet my uncle and aunt at the pub (Shakespeare Arms...or Shakeys). It was only a 15 minute trip but the fare came to $42! We actually had to not order dinner because Red Top Taxi had practically robbed us. We decided to never take a taxi in Guelph again after that.

Then Uber arrived this past summer, and I tried it out. The exact same trip only cost me $18, and the car was clean and the driver was friendly (and spoke English), which is opposite to most taxis.


Driving with Uber is somewhat nerve-racking because of the confusion around Uber's legal status, but what is pretty black and white is the issue of insurance. 

In the US insurance companies were quick to spot an opportunity and created a "rideshare" add-on to people's personal insurance, which allows someone to be completely covered when using the Uber system. Not so easy in Canada, where all insurance policies and prices have to go through provincial regulators (which is why you don't see very much difference in prices in Canada,the commie bastards). 

Uber is apparently partnered with Intact Insurance to create something similar, but it is being held up by the Ontario provincial regulatory body. The Ontario Progressive Conservative party, in opposition in the legislature, has tabled a bill which has already passed a second reading which will create new regulations and insurance mechanisms for the "sharing economy" (Uber and AirBnB, specifically), but it can take months to be passed and that's only if the majority Liberals accept the final version. 

Until then, every Uber driver in Canada is technically without adequate insurance coverage. 

Uber has stepped in and offered up to $5 million in "contingency third-party insurance", which means that if an Uber driver gets into an accident and their insurance drops them (as they will, because driving passengers for commercial gain voids their personal policy), the Uber's insurance will cover any passengers and the other people involved in the accident, but NOT the Uber driver and/or their vehicle. 

Despite what the taxi industry claims, Uber does indeed do background checks on their drivers. I had to go through a 7-year criminal background check and a 5-year driving record check. My car needed to be inspected at an Uber-approved garage (they've partnered with Canadian Tire so this was easy). 

In 2014 Uber turned away 26 Toronto taxi drivers because they couldn't pass the criminal record check. In fact, in 2014 Toronto cabbies were charged 226 times with counts of assault, sexual assault, theft, forcible confinement and a bevy of other charges. In the past 3 years, only 4 Uber drivers have ever been charged (and 2 of these were dropped as false sexual assault accusations after dashcams showed the drivers did nothing). Risk-wise, it is more dangerous to take a taxi than an uber!

One thing that makes Uber so safe is the app. Uber has the information, including addresses, of every driver and every passenger. Every trip is logged and the route is tracked on GPS, from start to finish. It is virtually impossible to rob an Uber driver and get away, or for an Uber driver to kidnap or hurt a passenger and remain anonymous. The passenger's credit card is automatically billed for the trip, so Uber drivers carry no cash on them, which reduces the threat of robbery. In fact, because no money actually changes hands between passenger and driver, the law isn't sure what to do about Uber.

In US cities that have embraced Uber, drunk driving rates have plummeted. Uber provides good-paying jobs to people with a low barrier of entry and provides passengers with affordable transportation options. Ultimately the real victims in the "Uber Wars" are the taxi drivers, who have been bled dry by corrupt cartels and city regulators and who ultimately have no future. Uber, or something like it, is here to stay.

With all of this in mind I became an Uber driver. Money is tight this month as my freelance contracts are on hold over the holidays and my business slows down for the Christmas break. 

Which brings us back to my first night as an Uber partner.

After about 8 minutes of waiting my phone suddenly went "Ping Ping! Ping Ping!" I had a passenger! The Uber app synced to my Google Maps and the turn-by-turn voice directions blared over my car stereo system as I made my way to the address given. It was a cute college girl and two guys who wanted a ride to a restaurant downtown. I offered them candy canes ("No way!" the girl exclaimed, taking four of them) and we made small talk on the 7 minute drive. 

After I dropped them off I looked at my app. I had just made ten bucks! Ten bucks for 7 minutes of "work". Wow! I was hooked.

Since then I've taken a stoner from Guelph to Kitchener (where I hung around and drove people), some drunks from Boston Pizza to their home and a student to his exams at Conestoga College. I avoid downtown at bar time. I figure "let the taxis have them". I don't want confrontation with cabbies, nor do I want drunks puking in my car. Instead I offer affordable transportation for students, to and from work and back and forth from Kitchener, and I help keep the roads safe by picking up drunks from the restaurants and Christmas parties that abound. 


Popular Posts