Uber drivers say proposed regulations could drive them out of business

Uber and taxi drivers, now bitter adversaries, are going to battle at Edmonton city hall this week. But this time they have something in common.

Taxis and Uber to lobby for changes to city's plan to make ride-sharing legal

Uber has been operating illegally in Edmonton since it rolled into town last December. That could change under new rules, which will go before council for approval this month. (Kai Pfaffenbach/Reuters)

Uber and taxi drivers, now bitter adversaries, are going to battle at Edmonton city hall this week.  But this time they have something in common.

Both the ride-share company and traditional cabs say the city's plan to revise its regulations and make Uber legal would drive them out of town.

Licensing director Garry Dziwenka unveiled the plans Sept. 4, which would make Edmonton the first city in Canada to legalise the controversial company.

Dziwenka said the city's goal was to make room for the new service while protecting traditional cabs.

In an effort to make sure Uber and other ride-share companies are safe, the city proposed rules that would require potential drivers to undergo criminal record checks, vehicle inspections, license applications and get commercial insurance.

That would set an Uber driver back approximately $6,800 a year. Uber spokesperson Xavier Van Chau called the proposal "unworkable," given most drivers don't work for them full-time.

Uber driver Eskinder just recently began picking up fares using the app to make some extra money on the weekends. CBC agreed not to use his last name because he could be fined by the city.

Eskinder said the expense would be too much to justify the few hours he works for Uber, and he has no intention of quitting his day job. He would have to stop.

"I don't think I can afford paying all of this money," he said.  "I can't keep this job like regular job. I work as a part time."

Uber officials said many of their drivers would be in a similar situation.

Last week, in an email to its Edmonton clients, Uber wrote that "if amendments are not adopted Uber will be unable to continue operating in Edmonton."

The company would like to see the burden of regulation fall on them, rather than individual drivers. Its business model depends on it.

The big insurance question

While Uber and its supporters may be able to convince city officials to relax licensing fees, it's unlikely the city will budge on insurance requirements.

While Uber says its drivers are covered by a commercial policy for up to $5 million worth of bodily injuries and property damage, critics say under Canadian law, commercial drivers are legally required to have their own insurance to cover claims incurred while transporting a passenger for profit.

That leaves drivers with no option but to splurge on a commercial policy.

"That's typically going to cost two to three times more than our personal coverage," said John-Kurt Pliniussen, an adjunct associate business professor at Queen's University.

"So all of a sudden now that the business model for an Uber driver has changed because we have that extra added expense."

Uber is working with Intact Insurance to remedy that problem. The two companies plan to devise a policy designed specifically for the kind of ride-share operations Uber drivers need.

Similar policies already exist in the United States, but it would be a first in Canada. The specifics of the plan are sparse for now, as Intact says it is awaiting approval from provincial insurance regulators before it goes public.

In the meantime, Uber drivers will have to pay some large bills if they want to continue to pick up fares under the proposed regulations.

And to make sure they follow the new rules, the city also plans to raise fines to $5,000 to keep drivers from operating illegally, as they've done since December 2014.

Taxis also threatened, say cabbies

Meanwhile taxi drivers say the regulations aren't stringent enough against Uber and other ride-share companies.

Balraj Menhas, president of the United Cabbies Association, said he doesn't understand why the city has gone to so much effort to accommodate a company that has thwarted Edmonton's bylaws for months.

He said at the very least, the rules for cabs and Uber drivers should be the same. In the current draft, the number of taxis is still capped, while an unlimited number of Uber drivers are allowed to pick up fares.

And while the rates for traditional taxis will be determined by city hall, Uber will set its own prices.

"It will be flooding the city taxi market," Menhas said. "It will be a big setback for the income of the taxi driver on the street."

He said taxi drivers plan to fill city hall on Wednesday, when city council will hear from the public on the issue.
After that, councillors will decide which way to steer the new rules before they are approved.



On mobile? See what costs Uber drivers are facing here