Taxi deregulation has finally come to Quebec with François Bonnardel’s bill 17, “An Act Respecting Remunerated Passenger Transportation by Automobile” is now law and will take effect on October 20 this year.
The new legislation takes control of regulation away from municipalities and into the hands of the province in an effort to allow industry stakeholders greater flexibility in coping with changing market conditions and new technologies.
While not perfect, it is by every means the best legislation to put in its appearance since the onset of the “Uber crisis” in 2015.
Here is what the legislation does:
1: Municipalities will no longer regulate the industry, instead, it will fall under the jurisprudence of Quebec’s Commission des transports du Québec (Quebec Transportation Commission) who will then oversee all matters relating to the taxi/limousine industry clean across the province.
2: It abolished the use of such terms as brokers and TNCs (Transportation Network Companies such as Uber) and replaces them with the term “transportation system”—a term that embraces all automobile modes of transportation including ridesharing. Transportation systems may have any combination of vehicle types. In other words, a transportation system can have both taxis and ride sharing cars in their fleet and work in tandem with the same dispatcher.
3: Ride sharing vehicles are restricted to receiving trip offers through app dispatching. They are prohibited from prearranged trips and telephone dispatching, which remain the exclusive preserve of traditional top light equipped taxis.
4: A driver may, for the sake of customer convenience, pick up a fare outside the city for which he is licensed if he should clear a trip within another city’s jurisdiction. That could conceivably include dispatched trips since Bill 17 makes no such restriction.
5: The new bill legalized price competition due to Uber’s persistent undercutting the regulated fares taxis had to comply with.
6: The medallion system—a system that limits the number of transferrable taxi permits, is now abolished. And therein lay the primary source of cabby opposition to the bill. After all, who likes seeing a relieving anyone of a $220,000 investment?
The government has provided $816 million compensation program for its 7600 medallion holders. It will be financed with a 90 cent per trip tax.
That’s average of $107,368.42 per permit holder. François Bonnardel, Quebec’s transport minister says that is the government’s final offer. In my opinion that is not an unreasonable offer.
Let us be clear about one thing though. An open entry system of cab licensing system as experienced in other jurisdictions will lead to extreme market fragmentation without a prohibition against fixed stand rents and leasing fees drivers pay to their fleet owners and dispatchers. Uber’s commission system is a much better system provided drivers are protected through collective agreements and employment standards legislation.
In fact, Uber’s commission system of stand rents is the primary reason many traditional taxi drivers migrate from taxis to Uber.
Industry stakeholders must overcome the taxi shibboleths of yesteryear and get into the 21st century if they wish to survive.
Drivers and their customers both substantially benefit from the new legislation. Here’s hoping other jurisdictions have sufficient wisdom to follow suit.