The hidden cost of Uber

Uber is in the news again. B.C.’s transportation minister says it’s a matter of when, not if, Uber’s ridesharing business will land in our province.

No doubt Uber’s introduction will improve customer service, especially in Metro Vancouver. We’ve all experienced far too many occasions where we’ve had to wait for sometimes up to an hour for a taxi. Price will also certainly be much lower than for your conventional cab.

Why, then, am I not so positive about the minister’s announcement?

Sometimes we’re too quick to forget the taxi driver in this Uber debate. Many taxi drivers literally purchase a job for themselves. Unemployed and often without the skill set or professional certification in Canada to obtain a conventional job, taxi drivers/owners borrow literally hundreds of thousands of dollars to purchase a taxi licence. Yes, you read that right — hundreds of thousands of dollars.

Uber_Protest_Portland_(16087787188)

Portland Taxi protest, January 13, 2015. Taxi drivers in many cities are concerned about Uber’s potential to undermine their livelihoods and passenger safety.

It’s not atypical for a taxi driver to have mortgaged all of their equity in their home to finance the taxi purchase. Just to make ends meet, many drivers must work a 12-hour day and do so 6, sometimes 7 days a week. After making loan payments on the debt incurred to buy the cab and paying for vehicle insurance, gas and maintenance, there’s often very little if anything left over for the owner to take home to his or her family.

The introduction of Uber will have a dire effect on taxi owners/drivers. Their volume of business will drop dramatically while their mortgage payments and other costs will remain a constant. Without the ability to continue servicing their debts, many will lose not only their taxi licence but they could even see their family homes foreclosed on.

In my books, that price is too high to pay for my improved convenience.

This entry was posted in British Columbia, Canadian politics, taxi, transportation and tagged . Bookmark the permalink.

3 Responses to The hidden cost of Uber

  1. carpools4bikes says:

    The city should help taxi drivers who paid inflated resale market prices for taxi licences sue the sellers to get their money back. Then the city can give each driver their own licence at low cost. That way, the drivers could earn the same income as they do now by working fewer hours.

    The city never should have put a limit on the number of taxi licences issued. This is what caused inflated taxi licence resale and rental prices. The city should have sold each driver their own taxi licence at low cost to begin with and used per-km congestion tolls on single-passenger taxis in the most congested areas during peak hours to control any taxi traffic congestion that resulted. That way, congestion tolls collected would have gone to the city instead of inflated taxi licence rent and resale revenues going to taxi licence speculators. Congestion tolls could be used to build the UBC subway and subsidize wheelchair taxis and wheelchair rideshare vehicles.

    Affordable passenger-directed rideshare vehicles are not just a matter of convenience. Many low-income people in outer suburbs and small towns need access to affordable rideshare vehicles to attend medical specialist appointments such as chemotherapy in Vancouver. As it is, it costs about $200 for each return taxi trip from White Rock to downtown Vancouver, a lot more than that from Chilliwack and beyond. Up to half of that money winds up in the pockets of taxi licence speculators, many of whom are very rich. The cost of the ride is further doubled by one-way municipal taxi boundaries that force suburban and small town taxis to return to home base without passengers.

    Uber drivers eliminate this appalling waste by carrying passengers on return trips and refusing to let taxi license speculators skim 50% off the top of every ride while contributing nothing to the system.

    UberCommute lowers costs even more by carrying multiple unrelated passengers, splitting the cost, and finding a driver who only needs to recover expenses, not wages, because they are already going in that direction for their own purposes anyway.

    By using UberCommute and sharing a ride with other passengers and a driver with similar destinations, a cancer patient or other person in White Rock can pay an affordable $10 for each door-to-door return trip for chemotherapy or other purposes in Vancouver instead of $200 for a taxi.

  2. carpools4bikes says:

    BC vs Alberta Political Contributions
    from Taxi Industry at Provincial Level

    BC NDP $101,820.00
    Alberta NDP $0.00

    BC Greens $0.00
    Alberta Greens $0.00

    BC Liberals $56,838.80
    Alberta Liberals $4,000.00

    BC Conservatives $0.00
    AB Progressive Conservatives $5,400.00

    Democratic Reform BC $860.00
    Alberta Wildrose $1,325.00

    SOURCES:

    http://contributions.electionsbc.gov.bc.ca/pcs/SA1ASearch.aspx

    http://efpublic.elections.ab.ca/efCTACSSearch.cfm?MID=CT_ACS

  3. Eric O'Dell says:

    I certainly feel for the taxi drivers that own their own licence. They are being put in a terrible position as a result of market changes. Should we try to stop change to protect them? Should our great grandparents have made sure to outlaw the motor car to protect the jobs of those in the horse and buggy business?

    The quality of service provided by the Vancouver taxi companies does not give any reason to protect them. Two of my sons live in Vancouver and are involved in the music business and have many times experienced the poor service provided by the Vancouver Taxi industry. They have been told they will have to pay a premium over the meter because they want to go to far out (even though they are going home to east Vancouver. but apparently to far south for the happiness of the drivers.)
    Yes, I feel for the drivers but most of the drivers do not own the licence. The licence owners are the ones who boosted the price to such astronomical levels. In at least some cases, they were speculating on the ever increasing value of the licence.

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