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Tech

Uber weighs in on recent licencing offence charges

Posted by Staff / December 6, 2012

Uber Taxi LicencingEver since Uber entered the taxi game in Toronto, there's been murmurs about the company's lack of a licence to dispatch cabs. Given that the Uber app merely connects customers with licenced cab drivers (Uber owns no vehicles), its stance is that it's not a transportation company and thus doesn't require certification to dispatch cars. As it happens, the City of Toronto doesn't share this point of view. The company was recently charged with a slew of municipal licencing offences, because, as Richard Mucha, Acting Manager of Licensing Enforcement told the Toronto Star, "if you plan on running a limousine service in the City of Toronto, or a taxi cab brokerage, then you require a licence."

We caught up with Uber's General Manager, Andrew Macdonald, to find out what the company thinks of the charges and how it plans to respond.

When was Uber charged by the City with the 25 municipal licencing offences?

As a matter of policy, I won't speak specifically to the charges mentioned, but I will speak generally to some of the issues raised.

When and how does Uber plan to respond?

We plan to continue our dialogue with the city and continue to contribute to the improvement of the industry for consumers and drivers alike. We think that ultimately the city wants to bring innovation, consumer choice and competition to the market.

What is your specific response to Mucha's claim that Uber needs a licence to dispatch?

Uber is a lead-generation technology platform for the limousine and TAXI industries. We aim to connect customers of high-quality transportation to the transportation providers closest to them. We don't own cars. We don't employ drivers. We parter with companies and individuals who are already licensed to provide great service to Torontonians. The technology we're providing isn't covered by the current city of Toronto by-laws.

To your knowledge, would the City be willing to grant you such a license?

I don't think it would be fair to speculate on this topic.

Has Uber ever applied for a licence? Why hasn't Uber taken the same approach as Hailo in this regard?

We haven't applied for a license because we are a technology provider. We believe the technology we're offering isn't covered by the current laws in place in Toronto. We do our legal and regulatory homework before going into a city and only launch if we feel that the Uber system is legal under existing regulatory framework.

Does Uber plan to continue to run its business in Toronto as usual for the forseable future?

Yes! Because we believe firmly in what we are doing, and we are operating in the right fashion. Customers are crazy about Uber. It's a convenient, efficient and elegant ride. It's a safe transportation option. We improve drivers' lives by helping them earn a better living. We help grow limo companies. We create new jobs and help the economy. We bring innovation to Toronto just as it refocuses on becoming an innovation hub. We make city living better and complement and improve the existing transportation infrastructure. We are part of a sustainable urban transport vision (Uber, bikes, TTC, car sharing, etc. = ditch your second car). We reduce drinking and driving by making safe transport available at the push of a button. I could go on and on and on (in case you can't tell!).

Is there anything else you'd like to say about the matter?

To address a few of unclear points in The Star article:

1) Uber's TAXI platform charges the consumer the fare indicated on the TAXI's meter plus a 20% gratuity. Our customers who use the Uber platform are fully aware that the gratuity will be applied for the driver, and are choosing to pay it by using the app (just as they would choose to tip at the end of a ride if they called or hailed a cab otherwise). The meter is used to measure the rate and then the metered amount is entered into the app.

2) The TAXI driver pays Uber a service fee which comes out of total fares.

3) As far as our research goes, it is common practice for some taxis and taxi companies to charge for extra services above the meter, such as credit card fees.

4) While we have encountered resistance led by incumbents and vested industry interests in some markets, we've made great strides in most of the 20+ cities to provide a high quality, reliable and safe transportation option for consumers, and a better living for drivers. For a recent great example of this, please see legislation passed yesterday in Washington.

Discussion

23 Comments

Ryan / December 6, 2012 at 11:02 am
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Firstly, I'm an Uber user. I like the service, but after reading this article it seems they're trying to exploit a hole in Toronto's by-laws, which I'm not comfortable with.

That feeling mainly comes from the line: "The technology we're providing isn't covered by the current city of Toronto by-laws."

Uber should be trying to work with the city of Toronto, not being so stubborn and at odds with the city.

That being said, it doesn't mean I'll stop using the service, because I really do enjoy it.
toldyaso / December 6, 2012 at 11:24 am
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Oh Uber, why are you so stubborn? What makes you think you can dispatch taxi's without a dispatchers' license?
Maybe you should have done a bit of research before starting...

This quote is hilarious:
"Yes! Because we believe firmly in what we are doing, and we are operating in the right fashion."

If you were operating in the "right fashion", you wouldn't have been charged with 25 municipal licensing offenses.
James / December 6, 2012 at 11:25 am
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Interesting article, and a nice viewpoint from Uber.

However, I'll continue enjoying Hailo with its non-inflated fees and lack of any legal challenges.
Rebecca / December 6, 2012 at 11:34 am
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This is not necessarily Uber scheming and bypassing standard laws. It is in fact the lack of applicable IP laws in this field and this is the closest law that can apply to the Uber services, which are not necessarily applicable to their services.

Laws are not able to adapt fast enough to ensure services like Uber are running properly. Laws are essentially archaic when being used to interpret any form of technology.
gorf / December 6, 2012 at 12:34 pm
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Just use Hail-o. At least they are legit!
Hamish Grant / December 6, 2012 at 01:14 pm
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As the Uber guy noted, this exact technique they are using here, worked to create legislation that certified their service as legal in Washington DC. They know that they're going to be charged but they also know they can win because what they're doing isn't covered in most taxi legislations, and this creates the necessity to draft appropriate legislation and open the door.

No right-minded legislator would forbid a service that makes taxi dispatching a) easier and b) more accountable.

Michael / December 6, 2012 at 01:18 pm
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I am a die hard Uber user. They have met and exceeded all expectations I was looking for in a TAXI/black car app. Their service is a win win for the drivers and more importantly us, the people of Toronto and for that we should stop fighting them and embrace the way their technology makes our lives easier.
MrsPotato / December 6, 2012 at 01:26 pm
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totally shady.
they don't want to follow the law, so they don't?!
Geoffry TO / December 6, 2012 at 01:29 pm
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I'm an Uber user, big fan of the service. It's typical for those businesses who are afraid, to seek help fending off competition. The most frustrating part when reading about the backlash is the simple fact TO companies could have just created there own and marketed it.
uber.com/invite/uberfreecredit4you Try it yourself, here's $10 towards your first ride. embrace technology (and a great car service which helps Torontonians)
MrsPotato / December 6, 2012 at 01:45 pm
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I think what Uber doesn't want you to realize is that they have ZERO responsibility to passengers in terms of regulation and consumer protection. It is a “rogue” taxi and limousine app. And that's it.

Your safety isn't their concern; and by blowing off the licensing they are legally required to have, they're proving they are nothing but a tech co.

Ultimately, they're putting us, the passenger at risk.

Passengers are not assured of being transported in a properly insured, publicly inspected vehicle operated by a driver who has cleared a criminal background check and who is required to provide nondiscriminatory, community-wide transportation service at a pre-set, regulated taxi fare.

This totally opens the door to personal safety risks due to lack of driver and vehicle regulatory oversight, uninsured accident claims, fare gouging and other illegal activity.

transportation service at a pre-set, regulated taxi fare.

You want to take this risk?
I sure as hell don't! Taxi's are risky enough!
Rick / December 6, 2012 at 01:50 pm
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Politicians dont follow the law why should they!! If there is a loop hole in the by-law then take advantage of it, everybody else does. The heat is coming from the dispatch companies in Toronto because they are losing their hold on the industry. Technology has finally caught up to them. Sink or swim.
Greg / December 6, 2012 at 02:02 pm
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I have used Uber numerous times - both taxi and black car service.

1) They are not breaking any laws. Current taxi companies are attacking Uber because they are losing business to them and fear that they will continue to lose more. Of course they are going to do anything they can to slow down success.

2) Taxi companies should have created their own apps earlier, and entered the market. A company that fails to adapt is hurting us, the consumer.

3) We, the consumers, should embrace companies like Uber who are offering us a new service. You don't to use it, thats fine, but as a consumer, I will never have a problem with additional options in a service industry

4) The risk, unsafe, blah blah - There's no added a risk. You are riding in the same taxis or black cars as you would otherwise, same drivers, same risk.


Bottom line, whether it is Uber, Hailo, or the next startup who offers us a new product or service - this is good for us. Greater options in the market place coupled with innovation in our city.


Larry Smith / December 6, 2012 at 02:08 pm
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MrsPotato said it quite succinctly, so I won't rehash those comments.

Uber provides a service that can only be categorized as a serious public safety issue, not a transportation company. Why anyone would order a car from a service that forces you to sign away your right to hold them accountable in the event of injury is beyond me.
Steve Fernandes / December 6, 2012 at 03:45 pm
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Instead of immediately slamming Uber as only wanting to circumvent laws or for exploiting loopholes as some comments here have done why is no one questioning the bylaws and what it is exactly the city is trying to do here? Maybe what the city sees here is a new technology that indeed laws haven't been prepared to cover (which does not make it illegal) and see this company all of a sudden on a steep rise (and the money that goes along with that) and want their piece of the pie, which they have contributed zilch to help foster.(as they do to almost all small business trying to make this city better) Let's not get into the whole convuluted backroom deals that exist between the city and taxi operators and airport limo operators that is more than obviously unfair but also completely unexplained to the public as of this moment! Point is the city of toronto does not help business at all in toronto (unless you have well lined pockets, right kind of contacts, and can talk the "talk"), on the contrary they make it quite difficult and demotivating to start any innovative venture that will actually make this city as international and cool as they've always desired so infantile like! P.s. People in this city have to stop being little blind sheep and instead of folllowing these anal retentive so called 'elected officials' and status quo burocracy and instead start questioning why the status quo is as such and what really goes on behind those city office doors and glass walls that we are forced to stand behind! Just saying, thank you!
smoods / December 6, 2012 at 04:27 pm
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Love this service - cant believe Toronto beaurocracy is stopping a service that definitely benefits the end consumer. try it for yourself, special promo for $10 free ride uber.com/invite/uberfreerideTO

Paul Kishimoto / December 6, 2012 at 05:36 pm
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A lot of hysterics in this thread.

The bylaws and rules were written at a time when no one was expecting smartphone ownership to grow so rapidly, much less anticipating that the technology would be used to create a new transport service. Now they are out of date.

This isn't really anyone's fault, unless you want to condemn past city governments for failing to own crystal balls. It also happens all the time: the CRTC hasn't kept up with mobile techology either, our copyright laws are poorly suited to digital media, etc. etc.

The city's bureaucrats aren't embroiled in some shady conspiracy, they simply don't have the option to throw out rules that are out of date (that's a good way to get yourself fired, no matter where you work), even though they are probably more conscious of the problem than anyone.

Uber should not have to wait, and cede market share to Hailo or others, simply because those others have more cunningly danced around outdated rules that need to be changed anyway. That would be winning via regulatory strategy, not by providing a better product to customers. Without forcing the issue, as they have, no one would care enough to think about updating the rules.

Existing operators will always use the regulations, if they can, to prevent competition—they're commercial entities out to make the greatest profit, and that's a cheap way to do it in the short term. However, I don't think they've considering the implications of Mr. MacDonald's "sustainable urban transport vision". With fewer car owners around, more people will use transport services — that includes Uber, but also traditional cabs. They'll get a smaller slice of a larger pie, so it's not at all obvious that they would be worse off.
Obvious / December 7, 2012 at 10:58 am
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There are some very obvious "inside" posts on this thread. Maybe if you didn't end your posts with some marketing rhetoric, you wouldn't be so obvious.
SK / December 10, 2012 at 07:08 pm
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The laws and rules are their for a reason...protect the public. Uber could have avoided all this mess by discussing options with the city..instead they chose to thumb their nose at City regulators...not too smart for a supposed technology company.
Me / December 10, 2012 at 07:49 pm
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Ah yes, BlogTO and it's double standard on who should and shouldn't have to do things legally.
Larry Smith replying to a comment from Me / December 15, 2012 at 03:53 pm
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It's not about applying a double-standard. It's about complying with the regulatory frameworks that govern transportation providers in Toronto - something Uber has not yet done.
Barista12 / January 30, 2013 at 10:25 pm
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First, Uber provides a great service. They allow the customer to track their exact movement, what they get charged for, etc.

Second, I've never had a bad experience with them. The drivers of the black cars are always professional and welcoming. They usually work for business clientele, meaning they have a high standard to sustain. The ability to get a taxi is also good, but i have never tried it yet.

Third, the cab companies are really out there trying to get these tech companies out of the city. The firsts time that I contacted Uber for their service, I actually got into a cab that looked similar to the Uber town car (mind you it was late at night). When I asked the driver if he was with Uber, he lied and answered with a yes. A few minutes later, my actual Uber driver calls me and inquires to my whereabouts. I say I'm already in an Uber car. As I realize on the phone that I have been scammed, I don't even try to get out of the cab, sorta fearing what the driver might do (stop in the middle of an intersection or something crazy like that).

I ended up getting charged for having to cancel my original ride, which I got refunded to me after explaining the situation to the Uber support staff.

Mind you, if you lose something in a cab, you will go through a lot of trouble getting it back. With Uber, just call your driver and he can get it back to you. Happened to me on one of my recent rides.

Overall, I love Uber. It is a perfect example of creative destruction (google it) in the taxi business. Sink or swim, and in the case of the typewriter, it sank.
Paul Jones / January 31, 2013 at 05:19 pm
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Toronto licensing is there to protect the rights of the consumer. Uber IS a dispatch service by definition, they take the order and dispatch the order. Uber charges the credit of the consumer. Uber, by floating our laws can charge what they want when they want. Is this what consumers of Toronto want?
James / July 9, 2014 at 12:42 pm
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Uber is not a taxi company that patrons will feel at ease. This is a non-licensed operation that should be stopped and penalized. There are a system of laws, regulations, safety, insurance and liability for this kind of service. We all abide by these laws and regulations and Uber MUST abide by them as well. Who is responsible for a belligerent or inebriated driver that takes no responsibility for the safety and security of others!..I read the terms and conditions for Uber and its a scam!! the City of Toronto should crack down and arrest these thugs!

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