Ride-hailing in B.C. will hinge on future ICBC and transportation board decisions

Legislation gives Passenger Transportation Board more power to iron out details for Uber, Lyft and other ride-sharing companies

The provincial government introduced ride-hailing legislation to permit such companies as Uber and Lyft into B.C.

We asked four experts to help us understand what we know and what is to come. They are Erez Aloni, a sharing economy researcher at UBC’s Allard School of Law; Tom Ross, a UBC Sauder School of Business policy analyst; as well as researchers Chris Rowell and Garland Chow, also at UBC.

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Regulatory delays:

What we know: From today, there will be a 12+ month delay.

The independent Passenger and Transportation Board (PTB) will be granted more power to determine the details on how the sector will be.

Ross notes the five-member board is politically appointed. Three of five positions expire by next May.

Furthermore, the entrance of ride-hailing companies in B.C. will primarily hinge on when ICBC is able to develop a specific insurance product for ride-hail vehicles. This is expected to take until fall 2019, the province said, citing other reforms taking place at ICBC as the reason for the delay.

California took seven months to draft a ridesharing policy that then took effect about one year later.

 

Cap and boundaries:

What we don’t know: Whether ride-hailing cars will be free to roam between jurisdictions and how many there will be.

The PTB will determine whether or not a cap on driver numbers should be enacted. It will also rule on maintaining or scrapping vehicle boundaries by analyzing drivers’ data.

Chow said caps and boundaries are mechanisms to intervene in the free market to resolve various issues that may arise. Caps will limit road congestion as well as competition, he said.

In New York City, caps were demanded by both taxi and ride-hailing drivers. In August, the city was the first major American city to introduce a legal cap.

“Uber refused to work with caps in general,” said Chow.

 

Driver requirements:

What we know: Not everyone will be able to get behind the wheel.

B.C. will require a commercial Class 4 licence for all ride-hailing drivers. This, said Aloni, will effectively act as a cap on drivers. “The more you put barriers on entrance, the fewer people can work as drivers.”

Chow said ride-hailing companies likely will oppose the Class 4 licence scheme, as it limits their business model, which is predicated on unlimited driver supply.

A Class 4 road test, criminal-record check and drivers’ medical exam are required for anyone age 19 or older and with two years of Class 5 driving experience without a certain number of penalties and fines. The associated costs are an estimated $300. The test effectively means drivers will need to study a 282-page guide, tantamount to driver training, which has proven controversial in Quebec. Last year, Uber threatened to leave the province over its driver training requirements. Presently 15% of drivers have a Class 4 licence, according to the province.

“You want to have some kind of minimum qualifications,” said Aloni.

Despite it weeding out some potential casual drivers, as Aloni suggested, Chow said he doesn’t expect the Class 4 requirements to be too burdensome.

 

Workers’ rights:

What we don’t know: Will drivers be employees or contractors?

Ride-hailing is generally seen as a cheaper alternative to taxis as there is more flexibility for drivers to offer services due to less regulation.

While the B.C. government announced fares would be set by the PTB it was not forthcoming on how drivers would be classified under employment laws.

Ride-hailing companies have entered markets with their drivers acting as independent contractors, said Rowell, who noted this has come at a cost — namely workers’ rights surrounding employment insurance, benefits and injury compensation.

Again, said Rowell, any regulations imposed by the PTB will be balanced against the initial purpose of companies such as Uber — accessing a timely and cheap ride from point A to point B.

Last month Uber drivers in London, England went on strike to protest a lack of workers’ rights. Drivers’ pay has also been a much-debated matter.

Rowell said protecting drivers’ rights is a “tricky area” for government, should it challenge any company’s categorization of drivers as independent contractors.

The  B.C. Federation of Labour asked Victoria to not classify drivers as independent contractors.

 

Fares:

What we know: A per-trip levy will go toward accessible vehicles.

Driver pay has proven controversial. Last July Uber settled a claim to the U.S. Federal Trade Commission for $20 million over allegations the company exaggerated driver wages.

The PTB will set overall fare rates, but it is not year clear if such matter as a minimum pay rate for drivers (pay floor) will be implemented. In addition to a driver cap, New York City also set a pay floor, preventing what Chow describes as “destructive competition,” or a race to the bottom among drivers.

Government has already allowed taxi drivers to tweak off-hour fares via mobile apps.

Aside from a possible pay floor, another matter to be determined is a compensatory fee for current taxi licences. In New South Wales, Australia, its government has implemented a $1 per trip levy for five years to compensate taxi drivers who have paid tens of thousands of dollars for permits.

“I don’t sense the province is looking at” a special levy, said Ross. For taxis to survive, “you have to hope the taxi brand is still worth something on the street.”

One other levy is on its way to B.C. Where Uber has been criticized for not providing ride-hailing to disabled people, the B.C. government has decided to implement a per-trip levy that will compensate capital costs of accessible vehicles.

 

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