Ridesharing in Toronto – What’s the Next Step?

It happens so discretely you might not even notice at first.

A black sedan turns off York Street onto Station Street out front the Union Pearson Express station, pulling off to the side of the street. One passenger gets out of the back seat, and starts removing his luggage from the trunk. The other lingers in the back seat a moment longer to finish a compelling conversation he was having with the driver. Finally, he gets out, a big grin stretched across his face, and waves at the driver as he pulls away.

What appeared on the surface as nothing more than someone giving their friend a lift to the train station was actually an exchange of services. The exchange started twenty minutes previously, with the opening of a phone app, and was finally completed with an automatic charge to the passenger’s credit card as the driver pulled away. There was no long-time friendship, just a brief, pleasant exchange between a driver and two passengers who both thoroughly enjoyed the process, and do so on a regular basis.

That exchange of services on Station Street was no isolated affair. Every day in Toronto, tens of thousands of trips exactly like that one occur, with a casual driver using her personal asset to make extra money on the side and tech-savvy consumers drawn in by the convenience and affordability of an extremely efficient service. Through a simple rating system, drivers and passengers are both encouraged to be on their best behaviour, such that the experience is pleasant for everyone.

It’s true, ridesourcing (more commonly known as ridesharing, though I think that word is a bit disingenuous) has become finely engrained into Toronto’s transportation network. It’s not just a new fad anymore – it’s become programmed into people’s travel habits, and it’s even used as a verb by many.

And yet, this new service has not been without its challenges. Taxi drivers, who rely on driving to make a living and feed their families, are being undercut on every trip by amateurs with less training, experience, and much less insurance than they. In Toronto and much of Canada, a single provider of ridesourcing services has run a vicious artificial monopoly within the city. As the only ridesourcing company with enough cash to insulate them from the potential repercussions of operating in a legally grey area, they regularly raise and lower their prices and their margins, such that their drivers’ wages may fluctuate wildly from day to day.

Finally, perhaps the most important of all, is the legally grey state of the insurance provided by ridesourcing companies. Drivers are expected to use their personal insurance first and foremost, which can be very problematic, as many personal insurers have stated outright that driving on a ridesourcing platform may render their policies invalid.

An important decision lies ahead of Toronto City Council this week, as they vote on proposed regulations for ridesharing in Toronto. On one hand, to think that such a service could be so quickly banned and forgotten is to be naïve. The idea of burying our heads in the sand and maintaining the status quo is unrealistic and unfavourable. On the other hand, allowing this industry to run rampant and unregulated will undoubtedly create more challenges in the near future.

We need to look forward and accept the fact that this wildly popular new consumer service has merits, and lessons which we can learn from. We need smart regulations to protect the interests of everyone involved. Consumers and drivers need to be protected through reliable insurance, Taxi drivers need to be protected through flexible rules that allow them to compete on a level playing field, and society needs to be protected by creating conditions under which new start-ups can enter the market and thrive, rather than falling victim to a market dominated by a single monopoly.

This week’s decision isn’t about saving the taxi industry, and it’s not about giving into the demands of consumers. This week’s decision is about forward thinking regulations that are fair for everyone. If done correctly, Torontonians will be left with yet another choice added to the diverse mix of transportation options available in the city today.

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