BRITISH COLUMBIA

Uber Faces Resistance To Canadian Expansion

11/02/2014 03:00 EST | Updated 01/02/2015 05:59 EST
Pablo Blazquez Dominguez via Getty Images
MADRID, SPAIN - OCTOBER 14: In this photo illustration the new smart phone taxi app 'Uber' shows how to select a pick up location next to a taxi lane on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo by Pablo Blazquez Dominguez/Getty Images)
VANCOUVER - The taxi alternative Uber has been busy expanding its controversial UberX service in several Canadian cities in recent months, often against the wishes of local politicians and taxi regulators, who warn the service is bad — and potentially dangerous — for consumers.

The U.S.-based company recently launched its UberX brand, which uses a smartphone app to connect passengers with non-licensed drivers, in Toronto, Ottawa and Montreal.

The company is also believed to be planning an imminent UberX expansion into Vancouver, where it has been searching for managers and drivers through postings on its website and on social media. Similar job advertisements have also been posted for Calgary.

But wherever Uber goes, the company is forced to fend off criticism from local governments, regulators and the taxi industry. Critics argue UberX is attempting to skirt regulations designed to protect passengers and drivers, such as requirements for insurance, licensing, training and vehicle inspections.

"My message to Uber and any other company like Uber is: we have rules; we have laws in this province that are all about protecting the travelling public and ensuring that people can travel safely," B.C.'s minister of transportation, Todd Stone, recently told reporters.

"If Uber wants to operate in this province, they're going to have to operate under the same rules taxi operators currently abide by."

Consumers may be most familiar with Uber's traditional taxi service — aptly named Uber Taxi — which connects users with licensed cabs. Passengers pay the standard meter rates, plus a tip, and Uber takes a cut of the transaction.

UberX is a relatively new addition to the company's lineup. The service allows anyone over 21 with a vehicle to apply to become a driver, though Uber says it subjects applicants to criminal record checks and provides comprehensive insurance.

Municipal taxi regulators in Canada have generally concluded UberX cars meet the definition of taxis, and therefore drivers must be licensed. Uber, however, disagrees with that assessment and has been proceeding without such licences.

Last month, bylaw officers in Ottawa conducted a sting and fined two UberX drivers, and the city says more charges are expected.

The City of Toronto issued a statement last month that said UberX violates municipal bylaws and "may pose a serious safety risk."

Montreal's mayor has publicly said he believes UberX is illegal.

Uber isn't revealing its plans for Vancouver or other Canadian cities.

Vancouver's city council passed a motion last month imposing a moratorium on new taxi licences for six months while it studies several issues related to the industry, including services such as Uber.

B.C.'s transportation minister warned last week of stiff fines and legal action if Uber operates without the proper licences. The Opposition New Democrats plan to introduce legislation this week that would dramatically increase those fines.

Uber attempted to launch its black-car service in Vancouver in 2012, but the company withdrew from B.C. after the provincial transportation regulator imposed a minimum fare of $75 per trip.

Uber did not make anyone available for an interview, but in a written statement the company argued traditional taxi regulations are outdated and shouldn't apply to its service.

"It's important to note that Uber is not a taxi service — we are a technology company — and as such we don't believe it makes sense to force-fit the services we provide into a taxi regulatory framework that is often decades old," wrote Uber spokesperson Arielle Goren.

Goren said the company has been meeting with local governments and encouraging them to adopt regulations that would accommodate Uber services. The statement also insisted Uber drivers are subjected to more rigorous screening than traditional cab drivers.

In Vancouver, recent rumours surrounding UberX lit up social media, with many users on Twitter practically begging for the service to launch amid the usual complaints about a lack of taxis and long waits.

Similar grumbling about taxi service has helped fuel Uber's popularity elsewhere.

Last month, Foreign Affairs Minister John Baird took to Twitter to complain he waited 75 minutes in Ottawa for a cab that never came, ultimately concluding: "Tonight I see the need for more competition with @Uber." The post was retweeted nearly 400 times.

Joshua Gans, who teaches at the Rotman School of Management at University of Toronto, says Uber's popularity exposes problems with the traditional taxi industry.

"If the (traditional) taxi service is that good, I shouldn't want to order (an Uber car), so from an economics perspective, it's a no-brainer," says Gans, a frequent Uber Taxi user who has also tried out UberX in other cities, though not in Toronto.

"Whenever Uber has come into a city and has become popular, it's very hard for the city to get rid of them."

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