Business

Uber vs. the world: How cities are dealing with ride-hailing technology

At the end of the day, there are only two ways governments can deal with Uber and its ilk — ban or regulate. Ignoring the phenomenon is no longer an option, says a Canadian expert in e-commerce and the sharing economy.

Cities trying to ban service are 'wasting their time,' expert says

Uber is facing legal hurdles worldwide, but the company keeps growing in popularity. (CBC)

Uber is here to stay and cities need to get on board, says a Canadian expert in e-commerce and the sharing economy.

"This company is so big and so pervasive, it's like the internet of transportation," says John-Kurt Pliniussen of Queen's University's School of Business. 

Even in the face of negative headlines about sexual assaults, concerns over data privacy, protests from taxi drivers, raids on its offices and outright bans, the California-based ride-hailing company continues to grow. This week, Toronto city council asked staff to develop new rules to accommodate it within municipal taxi and limousine bylaws.

Since it launched in 2009, Uber has expanded its services dramatically. It's now available in more than 300 cities in 58 countries. The Wall Street Journal estimates Uber is worth about $50 billion, almost twice its value in 2014. In the Greater Toronto Area alone, Uber says it has 500,000 riders a month and growing.

The reason, says Pliniussen, is simple: "People around the world love it."

With that in mind, he suggests, cities have no choice but to deal with this technology that's giving traditional taxi companies a run for their money. 

'We have to work with them'

Toronto decided it would regulate Uber in Canada's biggest city, though it hasn't yet worked the details yet. Mayor John Tory, to the chagrin of the local taxi lobby and its supporters on city council, has repeatedly said an outright ban wouldn't be practical.

"Most of the wise city councils are going to go the same way," Pliniussen said. "They're going to say, 'Yeah, we have to work with them, so let's just figure out what we want Uber to look like and let's get going.' "

There's plenty of precedent to follow. Uber estimates that more than 50 jurisdictions have adopted permanent regulatory frameworks for ride-hailing technology — a fact spokeswoman Susie Heath says the company welcomes.

"We believe that ride-sharing and Uber should be regulated and we have been working together with provincial and municipal governments across the country to make this a reality," Health told CBC News.

Toronto Mayor John Tory says cities must learn to balance fair regulation for taxi industries while safely introducing companies like Uber to the market. (CBC)

California led the pack when it adopted ride-sharing regulations in 2013, coining the term Transportation Network Company, or TNC, to describe companies that provides transportation services but don't technically own cars or employ drivers.  

Other U.S. states and cities — Seattle, Chicago, Colorado, Illinois, New York City and Washington, D.C., to name a few — have since followed suit, adopting their own TNC legislation.

Some places have more stringent rules than others, says Pliniussen, but they all generally follow the same basic principles —  they impose licensing requirements, insurance policies, vehicle inspections and driver background checks on private transportation companies like Uber. 

In Canada, Edmonton is on its way to being the first major Canadian city to regulate ride-sharing. The city is set to vote on a set of proposed regulations, which would see Uber drivers get official city taxi licenses, in November.

Kitchener-Waterloo, meanwhile, became the first in Ontario to propose a ride-hailing bylaw in August. Under the proposed rules, drivers would be required to have a GPS and a closed-circuit television system installed in their vehicles, and commercial auto insurance policies for a minimum of $2 million. 

Still, no region has been able strike a balance that leaves all parties satisfied, says Pliniussen.

In California, Uber employees are suing the company over payment, arguing they've been wrongly classified as contractors. In Chicago, taxi drivers are suing the city over what they say are unfair regulations that benefit Uber over traditional cabs. 

"These are the early days of the frontier of private transportation providers," Pliniussen said. "That's why there are all these news items." 

Taxi drivers honked horns and chanted 'shame, shame, shame' at the Uber supporters who were holding a rally in front of Edmonton City Hall on Sept. 30, 2015. (Terry Reith/CBC News )

'Uber is forbidden' 

Other cities have been much less accommodating.

London, England, on Wednesday proposed a set of rules that, if enforced, would dramatically alter how companies like Uber operate, forcing cars to wait five minutes before picking up a customer, banning apps from displaying available vehicles on a map and forcing customers to pay fares upfront. 

This week, Rio de Janeiro, became the first Brazilian city to impose an outright ban on Uber and similar technologies. Drivers who ignore the ban can be slapped with fines of nearly $500.

"Uber is forbidden," Mayor Eduardo Paes said after signing the the ban, which Uber has called "unconstitutional," into law. 

Uber has been banned entirely in Italy, Spain and a number of other areas. It was kicked out of Vancouver after a six-month stint in 2012. Ottawa considers the service illegal. So does Montreal.

French riot police push an overturned car as striking French taxi drivers demonstrate at the Porte Maillot to block the traffic on the Paris ring road during a national protest against ride-hailing service Uber in Paris, France, on June 25, 2015. (Charles Platiau/Reuters)

In France, authorities raided Uber's Parisian offices in March and arrested two of its executives in June.

The pair, Thibaud Simphal and Pierre-Dimitri Gore-Coty, face up to five years in prison and fines of 300,000 euros ($444,977 Cdn) per charge over allegations of fraudulent commercial activity, operating an illegal taxi service, and maintaining illegal databases containing personal information of both drivers and passengers.

Amsterdam has applied similar tactics. Police there raided Uber's office for the third time last week, according to Bloomberg News. 

'People won't stand for it'

Still, Uber continues to fight charges against it and operates in most cities where it's been deemed unwelcome, including Paris, Amsterdam, Ottawa and Montreal. 

Even cities initially cold to the company's advances are now eyeing regulations. Vancouver is reviewing the impact of ride-hailing technologies. Ottawa has launched a review of its taxi bylaws. Brazil's biggest city, Sao Paulo, recently passed legislation banning Uber, but Mayor Fernando Haddad has yet to sign or veto the bill, telling Globo network he wanted to find "a middle path" to address the issue.

Pliniussen said cities trying to keep Uber out know they are fighting a losing battle. He compared it to trying to stop people from using smartphones or ATMs. 

"It's impossible," he said. "They're wasting their time. People won't stand for it."

With files from Reuters

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