Does Uber Stand A Chance Of Success In Vancouver?

Ramesh Ranjan
February 22, 2017

Uber’s been hot after the Vancouver market in hopes of extending its ride-sharing service to our west coast hub.

They’ve run massive campaigns targeting Vancouver highlighting the economic potential it can have for the city.

Its entrance into our market has had a number of obstacles: The lack of a reasonable regulatory framework, the enormous pushback of the taxi industry and little political buy-in.

Their targets are clear: Win people over and empower them to pressure Vancouver City Hall and the Province of British Columbia to create clear regulations for ride-sharing.

The History Of Uber

Uber was founded in 2009 by Garrett Camp and Travis Kalanick. They were trying to hail a cab and simply were not able to.

That bred the idea – why not press a button and get a ride? With technology as advanced as it is, they set out a vision to make this very idea come to fruition.

The ride-sharing startup received their first stage of seed funding, a cool $200,000 that same year. In 2010, they received more funding – $1.2 million and by the end of 2011, Uber had raised $44.2 million!

Opposition To Uber

With any movement, there are going to be opponents. When it comes to companies offering rides on the road, there’s one major opponent: The taxi industry. Companies like Uber and Lyft are a threat to taxi companies.

This resent for Uber has been evident all over the world. Berlin banned Uber in 2014. Taxi drivers in Berlin, London, Paris and other cities staged a massive protest on June 11 of that year.

We’ve seen taxi companies become increasingly frustrated with the possibility of Uber coming to Vancouver.

Vancouver’s Taxi History

Vancouver is a relatively young city but its taxi industry has been around for as long as the city. Harry Hooper became the first taxi driver, way back in 1903. Just seven years later, he opened Vancouver’s first taxi company, Harry Hooper Ltd.

The lack of a regulatory framework in the 1920’s led to the Canadian Taxi Wars. The result: Present day’s set of regulations. Much of this strife occurred because too many people were just starting up taxi companies out the ying-yang.

The larger companies that made sizeable investments in establishing systems and metres were having their market share eaten into.

So what exactly ended ‘the Wars’? The imposition of a minimum wage, standardized fares, liability insurance, taximeters and limits for new entrants to the industry.

This perfectly sets the stage for Uber’s significant efforts to enter markets all around the world, particularly Vancouver where challenges persist.

Uber’s Efforts To Get Into The Vancouver Ride-Sharing Market

In October 2016, Vancouver City Council voted to extend the moratorium on issuing new taxi licenses to next year. Regarding Uber, their position has been that it’s up to the Province to conduct a review of the taxi industry to determine whether it can co-exist with ride-sharing companies, like Uber.

Vancouver City Councillor Geoff Meggs told CBC News: "We all agree more service is warranted. But no one is I think keen to put out new taxi licenses if they're not going to be economically viable in the face of ride-sharing or any other changes the provinces could impose."

Uber knows that Vancouver would be the testing grounds for getting into other Metro Vancouver municipalities.

However, they also know that the Province of British Columbia can set overarching ground rules for ride-sharing companies, like Uber to play by. That’s also what Uber is counting on – a provincial framework.

Uber’s Marketing Campaigns In Vancouver

Uber has made one giant campaign to get into Vancouver’s market but tapping into sensitive areas in the taxi industry, like wait times.

A series of Uber ads in 2016 highlighted the long wait times for taxicabs in Vancouver and Victoria. One ad even showcased a fictional mother who missed her daughter’s doctor’s appointment because the taxi they requested never showed up.

Of course, it begs the question: Who takes a cab to the doctor’s office?

Yet, it also makes a powerful case for the desire for ride-sharing in Vancouver. A growing segment of the population, burdened by the rising cost of living doesn’t necessarily need cars or have the time to wait for public transit or taxicabs. The solution is Uber.

Can Uber Survive In Vancouver?

Sure, it can. With a regulatory framework that allows the taxi industry and ride-sharing companies to coexist and compete fairly, the possibilities are endless.

For example, the Government of British Columbia outlined a Taxi Bill of Rights. The Ministry of Transportation teamed up with Consumer Protection BC to lay out the rights and responsibilities of both the taxi passenger and the taxi driver.

However, many questions remain. Will similar rights be established for ride-sharing users and drivers? Will the Taxi Bill of Rights be reformed and overhauled to include ride-sharing users and drivers?

Such regulations must govern the safety and security of cars that operate under the Uber banner. Cab driver Terry Sahota has those same concerns. “Will Uber cars have a safety inspection every six months like taxis?” he asked The Province newspaper. “What about insurance, security cameras, criminal background checks?”

Then, there’s the fact that driver defections to Uber will have a major impact on the industry. In other cities, drivers are attracted by Uber’s better hours, better pay, and reduced costs. A taxi company in New York claimed to have lost 40 percent of their drivers to Uber.

Taxi licenses are very expensive and controlled in supply by Vancouver City Hall. People have put their life savings into buying a taxi license. This has been a big barrier to entry into the market and is a reason why many current cab drivers are upset at Uber’s entry attempts.

Selling that license with Uber in the fold will likely result in a dramatic fall in price, nevermind the reduction in cab sales.

The Reality: Ride-Sharing And Taxis Must Co-Exist

Given the tough economic situation that cab drivers and taxi companies are threatened by, the reality is that if the demand and political will are there, ride-sharing will be existent in Vancouver. It’s not a matter of if but a matter of when and how.

An industry that has long gone without any competition now has to face the test that so many entrepreneurs encounter upon starting up their own companies.

This is how it is all around the world in the taxi industry. Vancouver is next.

What are your thoughts on Uber? Does Vancouver need ride-sharing? Leave a comment below!

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