U.S. ride-sharing giant Uber and the local Toronto government have been at odds since the company launched in the city during 2014. However, there is now seemingly an end in sight, a finality to the debate that will either see Uber legally adopted in the city or leave the Toronto market entirely. The most interesting aspect of the situation is that it could really go either way.
The city has long accused Uber of being a rouge company not legally licensed to operate in Canada, Ontario, or Toronto. The UberX service is not regulated in the city, while drivers are not properly licensed or insured to work as quasi-taxi operators.
Uber on the other hand argues that it is a technology company that provides a platform for passengers to link with freelance drivers. In its view, this means that it should not be subjected to the same regulatory rules as a taxi service, which generally means drivers with Class 4 licenses, vehicle checks, and commercial auto insurance.
It is an argument that shows no signs of being resolved, aside from the fact that Toronto is currently working towards amending its bylaws in the pursuit of accommodating Uber. However, the company would have to accept the new conditions before it is legal in the city, and if not then Uber may decide to pull out of Toronto entirely.
There are precedents for both scenarios around the country. In Edmonton Uber was legalized and the company agreed to the regulatory rules (Class 4 license, commercial insurance, vehicle checks, etc.) and will be operating legally in the city when its sorts out adequate auto insurance coverage. In Calgary it not go so well, where the city amended its bylaw for Uber, but the company did not agree to the stipulations and moved out of the city.
Could Uber afford to abandon Toronto, the largest market in Canada? In a monetary sense it could, but from a marketing perspective it would be problematic for expansion around the country. Interestingly, some experts think that the company can flirt with the rules, break them, and disagree with authorities and because of its strong consumer-base will get its own way eventually.
Brishen Rogers, a professor of law at Temple University says that Ubers customers are loyal and the economy of those consumers will ultimately sway municipalities into changing laws to adopt the ride-share firm.
“You follow some rules and try to skirt around some others and you break some others. And you know, Uber’s calculation, and I have to sort of admire their chutzpah in some ways, is simply that their product is good enough that sometimes if they break the rules they’ll be able to change the rules, because the consumers will want them to be in the city so badly. And that has happened.”
It is less than two month until the city of Toronto will reveal its revised bylaw that will hope to solve the Uber problem, and much now rests on that. It now really depends if the city is willing to play to Uber’s tune or whether the financial center of Canada holds firm and says no to the economic boost provided by the company.