Canadian Underwriter

Edmonton becomes first Canadian city to legalize ridesharing services

January 28, 2016   by Canadian Underwriter

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The City of Edmonton has become the first in Canada to legalize ridesharing services.

The new ridesharing bylaw will come into effect on March 1

The City of Edmonton said in a media release on Wednesday that council has approved a new vehicle for hire bylaw, which will allow technology-based companies, such as mobile app dispatchers like Uber, to operate legally in Edmonton under a new class called “private transportation providers (PTPs).” The new bylaw will come into effect on March 1, providing time for the city and industry to begin introducing Edmontonians and vehicle for hire drivers to the new regulations.

“The regulatory framework in the new bylaw helps to answer citizen and business demand for more choice in the vehicle for hire industry,” said Edmonton Mayor Don Iveson in the release. “It represents a significant evolution of the industry and creates a model that will enable the taxi business and private transportation providers to co-exist.”

Under the hybrid fare model in the new bylaw, both taxis and PTPs will be required to charge a minimum of $3.25 for any trip pre-arranged through a mobile app or written contract. Rates above the $3.25 minimum may be negotiated between the PTP or taxi and the customer.

Only taxis will be permitted to pick up “street hails” or use taxi stands. Street hails, pick ups from taxi stands and trips arranged by phone dispatch will be charged at a stipulated metered rate of $3.60 for the first 135 metres and $0.20 for each additional 135 metres or 24 seconds waiting time, the release said.

Related: City of Edmonton seeks feedback on fares charged by taxis, vehicle for hire industry

The new licence fee structure also establishes two PTP dispatcher categories: regional PTPs operating less than 200 vehicles, and commercial PTPs operating more than 200 vehicles. The license fees for dispatchers, vehicles and drivers will be the same between taxis and regional PTPs: dispatcher/broker: $1000/year; vehicle: $400/year; and driver: $100/2 years or $60/year. Regional PTPs will also be required to pay an accessibility surcharge of $50 per vehicle. Licence fees for Commercial PTPs will be: dispatch: $50,000/year and per trip fee: $0.06. Commercial PTPs will also be required to pay a $20,000 per year dispatch accessibility surcharge.

Peter Ohm, acting branch manager for the city’s Current Planning branch, said that the goal was “to find the right balance between recognizing the long history of service by the taxi business and being responsive to innovation in the industry.” He said that the city will continue to closely monitor the impact of these changes and may make adjustments, if necessary, to address potential issues, such as predatory pricing, that may negatively impact the industry. “Edmonton is in a leadership position among Canadian cities in developing and implementing a response to ridesharing in the vehicle for hire industry,” Ohm said.

Under the new bylaw, drivers will be required to provide the city with proof of the “proper insurance and class of driver’s licence, as outlined in provincial law.” Criminal record checks and an annual vehicle inspection by a licensed garage and mechanic will also be required.

Related: Edmonton, Calgary grappling with how to deal with Uber private for hire vehicles

Fines for operating without a city driver’s licence or city vehicle licence under the new bylaw will be $5,000, and regular enforcement of unlicensed vehicles for hire will continue, the release said.

The City regulates the vehicle for hire program, which is funded on a cost recovery basis. Fees collected are used to pay for the resources needed to administer and enforce the bylaw.

The regulations in the new bylaw are the result of wide-reaching research on emerging vehicle for hire business models from across North America, and extensive engagement with industry stakeholders and the public, the city said. Public input on fares was captured through a 400-person random sample phone survey and an online survey which received over 3,000 responses.

The announcement came less than a month after Aviva Canada said that it will offer personal coverage for ridesharing drivers “that carry paying passengers in their own vehicles.” Aviva Canada said in early January that the coverage – an addition to an Aviva-insured personal auto policy – will be available for Ontario drivers in early February. The insurer will also be “working with regulators across the country to make the solution available in other provinces in the coming months.”