Uber legalized under new rules that take effect this fall, city council decides

Uber — and app-based ride-hailing services like it — will exist legally under a new licensing category and guidelines that come into effect this fall, Ottawa city council voted Wednesday, bringing a lengthy taxi bylaw review to an end.

Uber to continue operating illegally until new regulations come into effect this fall

Council chambers was packed Wednesday, April 13, as council reviewed a proposal to change taxi regulations and legalize ride-hailing services such as Uber. (Chloé Fedio/CBC)

An Ottawa taxi driver disrupted city council with a noisy exit after councillors voted to legalize Uber — and app-based ride-hailing services like it — under a new licensing category that will come into effect this fall.

"Think of what the hell you're doing, all of you," shouted taxi plate owner Tony Hajjar, calling Uber a "criminal organization" he likened to cigarette smugglers.

"These are families you're breaking up here," he said, referring to the city's 2,000 taxi drivers. "These people are your taxpayers. There are going to be a lot of homes going up for sale."

The changes, which also include a reduction in licencing fees for traditional taxi drivers, will come into effect on Sept. 30 — but Uber Canada has indicated it will continue to operate illegally until then with an effort to meet city requirements before that date.

"We look forward to working with the city to come into compliance as the bylaw comes into effect," said Uber Canada's Ian Black after the vote, adding that the company is following the rules in 70 cities across the world where it has been regulated. 

Ottawa has issued nearly 200 fines to Uber drivers since the company launched in Ottawa in October 2014 — and acting deputy city manager Susan Jones said that bylaw officers will continue to enforce the current rules until the new ones take effect.

Ottawa taxi plate owner Tony Hajjar called Uber a "criminal organization" as he stormed out of a council meeting after councillors voted to legalize app-based ride-hailing services, like Uber. 1:05

Some councillors scolded Uber for skirting the rules for the past 18 months and described the new rules as imperfect — even as they voted in favour of legalization. Eli El-Chantiry was the only councillor to dissent.

Coun. Keith Egli called on Uber to "do better" moving forward.

Coun. David Chernushenko warned, "We will be watching very carefully" to make sure Uber and its drivers follow rules created by the city.

"I do not like the way this came about," he said. 

Mayor Jim Watson also denounced Uber's "bull-in-a-china-shop method," but added that the company forced the city to adapt to the new reality more quickly.

"The number of people that were contacting me and contacting members of council was in the hundreds if not thousands that said, 'We want cheaper service, we want more reliable service, we don't want to be carrying cash around," he said.

Cameras not required

Uber drivers and app-based ride-hailing services will not be required to have cameras in vehicles under the new law — a main sticking point for the Ottawa taxi industry — but the question will be reviewed in one year when data on the issue is available.

Dire predictions of doom and gloom will not come to pass.- Coun. Diane Deans

In a close 13-11 vote, council voted that all vehicles for hire will be required to have a minimum $2 million in liability insurance, down from the minimum $5 million initially proposed by city staff. Taxis are currently only required by the city to have $2 million in liability insurance but the Ottawa taxi industry has voluntarily increased its coverage to $5 million.

Coun. Scott Moffatt, who introduced the motion, argued that $2 million — the same amount being proposed in a parallel bylaw review in the City of Toronto — is sufficient and helps "both sides."

Other changes include:

  • Eliminating the $1.50 service fee for customers paying with credit and debit in taxis.
  • Eliminating the $820 Algonquin College taxi course for drivers.
  • Reducing the taxi licence fee by 40 per cent, and eliminating it altogether for drivers of accessible taxis.
  • Maintain the exclusive right for taxis to accept street hails and use taxi lanes.
  • Allowing taxi drivers to offer reduced fares, but only when pre-arranged through an app. The city will not regulate Uber's pricing.
  • Vehicles in both licensing categories can be a maximum of 10 years old. 

Coun. Diane Deans, who heads the committee that reviewed the bylaw changes proposed by city staff last week, repeated at the outset of the debate that Ottawa is "taking the handcuffs off the taxi industry" with its new set of rules — even though the taxi industry has suggested it could lead to its extinction.

"The taxi business will remain lucrative," Deans said. "Dire predictions of doom and gloom will not come to pass."

Camera issue to be reviewed in 1 year

The taxi industry had been pushing for Uber and services like it to join them in having security cameras in vehicles, which has been a public safety requirement for cabs in Ottawa since 2008.

City staff had recommended that the new licensing category be exempt from having security cameras, as payment is done through an app without the exchange of cash, and because rides are pre-arranged through an app between drivers and passengers, who can see each others' online profiles.

Coun. Riley Brockington — who voted against forcing cameras in Ubers and services like after a lengthy debate at a committee meeting last week — introduced the motion to revisit the "contentious" issue in a year. 

​"I really struggled with that decision," he said of his vote last week.

Council is set to receive a report on compliance to the new rules, as well as public safety issues, every six months in the first year of the changes, and annually after that.

El-Chantiry had introduced a motion at council — after the same motion was shot down at the committee level — to force security cameras under the new licensing category but it was defeated 15-9. 

El-Chantiry, who is also the chair of the Ottawa Police Services Board, emphasized that security cameras in taxis have helped solve major crimes — including homicides — and that they could do the same in Ubers.

"I do believe in my heart, if anything, a camera is a deterrent," he said.

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