This is the second of four Canada Fact Check articles on Uber’s entry into Canada.
The main argument in Part 1 was that Uber’s flagship UberX service is unambiguously illegal in most cities in Canada because the law considers UberX a taxi service and Uber refuses to apply for a taxi licence. And it doesn’t apply for a taxi license for its UberX service for the simple reason that it does not want its UberX service to operate under the same rules as the rest of the taxi industry and incur the same licencing fee, insurance, and consumer safety costs that the rest of the industry pays. In other words, while Uber is competing for the exact same passenger dollars as the rest of the taxi industry, Uber wants to play by its own rules when it comes to fares and industry regulatory costs.
But Uber also knows that sooner or later the fact that its UberX service is operating illegally is going to catch up with it. In other words, it knows that UberX eventually has to operate under some sort of government sanctioned regulatory regime in Canada. And that’s why, long-term, it needs to have Canadian licensing jurisdictions implement separate sets of taxi rules tailored to its business model. Not tailored to its “innovative” technology as Uber and some of its boosters might claim, mind you, but tailored to the way Uber maximizes its profits.
To accomplish this, Uber has written its own taxi rules and hired well connected, high powered lobbyists with close ties to politicians such as Toronto’s Mayor Tory, to shop Uber written rules around to key Canadian licensing jurisdictions. And Edmonton is the first major Canadian city to make the Uber authored rules law.
To summarize: at the heart of Uber’s global business strategy is a political strategy. Because Uber doesn’t have the business smarts to compete with established taxi companies under existing industry rules, it has to operate either illegally or pressure local licensing authorities to create a separate set of taxi rules for its main service – UberX – to operate under. Continue reading