BALDREY: New B.C. barriers could easily scare off ride-hailing firms

Transportation Minister Claire Trevena has finally set the wheels in motion that could bring ridesharing (also known as “ride hailing”) services to B.C. by this fall.

However, it is not entirely clear yet whether any company will enter the B.C. market, given that barriers to a true ridesharing concept will likely remain in place.

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One of those barriers may be Trevena’s insistence that all ridesharing drivers must hold Class 4 driver’s licences, which are more specialized and harder to obtain.

Trevena outlined her resistance to drivers holding the standard Class 5 licence in a letter sent last week to Passenger Transportation Board chair Catherine Read, emphasizing that she considered this to be an issue about passenger safety.

“I am a firm believer in safety and believe that a commercial Class 4 driver’s licence provides a safer atmosphere for passenger-directed vehicle movements, with extra testing and a medical examination completed at time of application and in routine intervals thereafter,” she wrote.

One of the major ridesharing companies – Lyft – has publicly said requiring a Class 4 licence for drivers is a deal breaker for them, although a company representative appeared to be hedging his comments after Trevena’s letter was made public.

Safety concerns aside, I have long thought the NDP government’s reluctance to fully embrace the ridesharing industry is ground in the fact that it represents a rather free market model, with minimum regulations and freedom to go wherever it wants.

While the existing taxi industry’s political influence cannot be discounted, the NDP’s core philosophy is that government knows best, at least better than an open market. Hence its historical support of more taxation and regulations.

It remains to be seen whether geographic boundaries governing ridesharing services will be included in the final package, or what the fare structure is going to look like. I would not bet the farm on everything being wide open.

Another factor that may keep ridesharing at bay in B.C. is the fact that the two major ridesharing companies in North America – Lyft and Uber – have lost tremendous amounts of money and show no signs of turning a profit anytime soon.

This begs the question of whether fares must increase, or drivers’ wages must go down in order for these companies to stay afloat. Again, why should anyone be surprised by the NDP’s hesitation to embrace an open market industry that will potentially pay its workers low wages?

Indeed, Uber and Lyft drivers in 10 U.S cities (San Francisco, New York and Chicago included) staged a one-day strike earlier this month, protesting what they consider to be low wages and poor working conditions. How such an industry is going to fit within the NDP’s toughened employment standards legislation will be interesting to watch, to say the least.

The weight of these fiscal challenges may be enough to give these companies reason to reconsider expansion into untested jurisdictions like B.C.. In fact, a lengthy analysis of Uber recently published in the scholarly American Affairs magazine concludes that Uber’s business model is simply not sustainable (it quotes Uber’s own financial statements stating losses of almost $15 billion over the last four years).

Over time, another form of transportation service may increasingly meet the demands of consumers not satisfied with traditional taxi service and therefore serve as another obstacle to ridesharing taking firm root in B.C.

That would be “car sharing,” which is already offered by such companies as Modo, Evo and car2go in Metro Vancouver and some other parts of the province.

These companies are gradually increasing the sizes of their fleets and are relatively cheap (certainly cheaper in most cases than a rental car) to use. If ridesharing fare prices do indeed increase significantly over time, car sharing will increasingly look like a preferred option.

As well, the millennial generation appears to be less interested in purchasing vehicles (many of them don’t even bother to get a driver’s licence), which may bode well for ridesharing, but certainly for car sharing as well.

I suppose that Uber may eventually dip its toe into the B.C. market, but there remains a good chance it may not find the water to its liking.

Keith Baldrey is chief political reporter for Global BC. Keith.Baldrey@globalnews.ca

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