🍁 Toronto Caps Uber & Lyft Driver Licenses (& Vehicles), But Exempt ZEVs
Canada's largest city institutes Uber/Lyft driver license (& effectively vehicle) cap, with ZEV exemption. Capping driver licenses is noteworthy approach, we explain why it's complex for NYC TLC
Toronto, Canada’s largest city, is following in the footsteps of what NYC did in 2018. However, it might be taking it one step further with a Uber/Lyft driver’s license cap, in addition to a Uber/Lyft vehicle cap (we suppose capping driver licenses is how Toronto is effectively capping vehicles as well).
In a surprise Toronto City Council vote, Canada’s largest metropolis has frozen (at least until a report is issued next year) the issuance of *new* driver and for-hire vehicle licenses for Uber and Lyft. Prominent Canadian media sources report the cap as both a moratorium on new vehicles and on driver licenses (i.e., would be equivalent to the TLC Plate Cap and a TLC Driver’s License Cap 👀).
However, our reading of the passed Toronto City Council bill implies it’s more of a driver’s license cap that effectively caps Uber/Lyft vehicles, but since Toronto is not a City we know very well (i.e., terminology might be different), we wanted to share how their media frames it and also how we understand what happened based on the the language contained in their City Council bill.
Interestingly, the vote to cap Toronto’s rideshare fleet (whether by driver licenses and/or vehicles), happened in conjunction with an expected City Council vote that approved requiring the city’s for-hire vehicle fleet be 100% zero-emission (ZEV) by 2031 (very similar political dynamics to NYC 😮, the Green Rides Initiative TLC Board vote is next Wednesday, October 18th!).
“I’m not worried about the industry. I’m worried about our air quality and I’m worried about newcomers to Canada being paid $7 an hour to drive around”
- City of Toronto Councillor Mike Colle
We aren’t Toronto City Hall experts, but quickly going through the language of the proposal there are some interesting specifics to note, outside of the driver licensing language. Specifically, the inclusion of exemptions for wheelchair accessible vehicles (WAV) and plug-in hybrid vehicles.
In addition, and perhaps learning from NYC’s implementation mistakes related to its historic 2018 NYC FHV License Pause (TLC Plate Cap), Toronto’s Mayor Olivia Chow justified the surprise vote to cap Uber/Lyft.
“In a speech to the chamber, Chow defended the freeze and its hasty implementation, arguing that announcing it beforehand would have sparked a run on licenses. She said the policy would boost the wages of drivers — many of whom are low-income, people of color, or newcomers — by cutting down on competition, and help tackle pollution from the transportation sector that is responsible for one-third of the city’s greenhouse gas emissions. The vehicle-for-hire industry makes up about four per cent to six per cent of that amount.”
- Toronto Star
Uber and Lyft’ response to the cap was predictable - the companies essentially threatened legal action, as they were caught off-guard.
“Mayor Chow’s cap will ultimately hurt the diverse group of Torontonians who rely on rideshare as part of their transportation mix and those who drive rideshare for additional income, especially in a time of rising costs,” reads a statement from Uber Canada. “There was no procedural fairness on the council floor today.”
- toronto.citynews.ca
Furthermore, new rules that restrict the app companies ability to access an unlimited supply of for-hire vehicles (again, via a driver license and/or vehicle cap), will annoy them. However, in our view, Uber/Lyft should shed these overused, and frankly stale, arguments and accept that they will be subject to some pretty predictable and reasonable taxi regulations. In fact, our advice (not that they’re asking for it) is Uber/Lyft management should embrace these sort of regulations, engage regulators and now focus more on onboarding traditional cabs.
To be fair, in New York City, Uber seems to have adopted this approach but still would obviously prefer that TLC remove the FHV License Pause (“TLC Plate Cap”) or provide more exemptions (i.e., hard to easily kick out a driver from the platform when there are only so many to choose from, it forces them to be much discerning in our view before deactivating a TLC driver without proper investigation).
Uber and others have recently attempted to effectively carve out an exemption to the TLC Plate Cap under the guise of “electrification”. Revel, at least, can argue it’s growing its own vehicle fleet that it maintains, employs its own drivers and are building a lot of charging infrastructure at great cost. That argument has some weight and perhaps a base-specific TLC Plate exemption for a very limited number of TLC Plates tied to charging infrastructure can be offered to them.
Promoting a zero emission NYC FHV fleet is a noble goal that can be achieved by focusing on converting the existing NYC TLC fleet, it does not require more vehicles to be added to our already congested City streets. Furthermore, to argue for congestion pricing and the addition of more FHVs is mental gymnastics that this publication finds intellectually dishonest and confusing to follow. Outer borough traffic, already bad, is likely set to get worse, as cars avoid Manhattan’s congestion tolling zone.
The NYC Taxi & Limousine Commission ultimately has the power to assess whether more FHVs are needed and we, as we’ve outlined in several articles, hope they remain steadfast in leaving the moratorium in place - primarily related to protecting driver earnings and helping the taxi medallion industry recover.
We also understand the need to protect the minority of drivers who don’t have claim to their own FHV License from any abusive leasing companies and believe (1) a FHV Lease Cap, similar to the rules that currently exist in the taxi medallion industry, should be instituted and (2) a portion of handed in (i.e., natural attrition) TLC Plates should exclusively be reissued (auctioned off) to individual drivers that would allow them to exit leasing arrangements.
🤔 TLC Driver’s License Cap?
Where Toronto has pushed the envelope is it appears to have capped for-hire vehicle driver licenses for Uber/Lyft, something that the Independent Drivers Guild (IDG) and other driver advocates have been pushing for in NYC. We think this policy would not work in NYC, as there are currently over 172,000 TLC-licensed drivers (i.e., you really want to add 70,000+ more TLC-plated vehicles to the road? It would collapse the entire industry, cause massive congestion - we think that’s a fairly uncontroversial take).
How you could make it work on a go forward basis, is if you follow the London Black Cab industry’s example of making it more difficult to get a commercial for-hire driver’s license via a difficult examination. In London they effectively have a “one driver, one no-cost taxi medallion” rule, but only after a driver passes a very difficult test called “The Knowledge”, which takes years to prepare for (which can be viewed as the effective medallion cost, in a way).
There are well documented controversies to this regulatory approach, but it is an approach that London took, while NYC embraced a taxi medallion system to protect professional for-hire driver earnings during the Great Depression (i.e., many London Black Cab drivers are not immigrants, not from London and because they are not natively fluent in English, it is often thought they have a harder time passing The Knowledge). Furthermore, London, unlike New York, has different driver licensing standards for different FHV sectors (black cab = yellow taxi, minicab = NYC FHV). In NYC, a TLC-licensed driver can drive across all FHV sectors (yellow taxi, green cab, Uber, Black Car, Livery, Lux Limo, etc).
This is a much more complex topic than many people appreciate because every city has a different regulatory history and approach when they originally tried to solve for protecting for-hire vehicle driver earnings. For example, London’s Knowledge examination has existed since 1865! You can’t ignore NYC’s Taxi/FHV markets unique history and the practicality of embracing sensible, but historically divergent regulatory approaches (i.e., London never had the medallion system, so imagine pitching that now or trying to implement that).
Well meaning driver advocates would do well to study taxi history, sometimes many think they’ve come up with brand new ideas, when they simply are just ignoring history and underrating the complexities involved in executing their ideas.
NYC’s Council, Mayor and TLC should feel proud that the regulatory precedent they set in 2018, is now being followed by other major North American cities.
“It was encouraging to see Mayor (Olivia) Chow stand up to big tech and challenge the status quo,” Kristine Hubbard, operations manager with Beck Taxi told Global News. “A cap on the number of vehicles is good for the environment and gets us closer to environmental goals.”
- GlobalNews.ca
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