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City of Calgary committee holds special meeting to consider regulation of transportation network companies

November 10, 2015   by Canadian Underwriter

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Calgary’s Taxi and Limousine Advisory Committee (TLAC) held a special meeting on Tuesday to examine options for the committee to consider regulating Transportation Network Companies (TNCs).

City of Calgary administrators are recommending a hybrid open/controlled entry system for transportation network companies

In a submission presented by Mario Henriques, the city’s Chief Livery Inspector, city administrators are seeking TLAC input on a “proposed framework that would permit TNCs to operate within a regulated taxi and limousine market, under the premise that all market participants should be treated fairly and equitably.”

TNCs use smartphone applications that connect passengers with drivers who use their personal vehicles for profit, known as private for hire vehicles (PFHVs). Currently, the Livery Transport Bylaw 6M2007 does not allow unlicensed PFHVs to operate in Calgary based on a variety of public safety concerns, including inadequate insurance.

The submission report noted that at the Oct. 5 combined meeting of council, administration presented a report that recommended amending the regulatory requirements that would permit “on demand” limousine service to provide more flexibility for existing and new service providers, enhance consumer choice and improve existing fleet efficiency during peak periods.

Proposed amendments to the Livery Transport Bylaw included the elimination of the 30 minute prearrangement requirement for limousines, the reduction of minimum rates for on-demand limousine service and the expansion of vehicle-type options for limo service providers. The relaxation of the minimum rate would only apply to service providers that use an “approved smartphone application,” the submission added. “Only apps which calculate a trip fare based on distance travelled and which confirm the identity of the passenger by utilizing a credit card verification process would be eligible” for approval.

Related: Calgary warns of risks as UberX launches in city

The report noted that Calgary, like most large cities, has traditionally limited the number of taxi plate licences it issues in addition to regulating the rates taxis are permitted to charge consumers. “While these policies have resulted in a stable and sustainable taxi market that receives very high overall satisfaction ratings from consumers and citizens, they have also prevented direct competition by new market entrants such as TNCs and the private for hire vehicle partners of TNCs.”

City administration is proposing five regulatory options for consideration:

• TNCs continue to be prohibited – continue to regulate taxi and limousines in the same manner as today. Continue to prohibit PFHV operations;

• Dual regulatory framework – continue to regulate taxi and limos in the same manner as today, but allow PFHVs to operate and regulate safety considerations for both through licensing;

• Hybrid open/controlled entry system – change the way taxis are regulated (maintain limit on the number of taxi plates, but allow some flexibility in rate setting for taxi companies). Allow PFHVs to operate and regulate safety considerations for both through licensing. Rate flexibility means that taxi and limo companies would be free to set their own rates, but only if they use a city-approved smartphone app that confirms the driver and passenger identification, including the City of Calgary livery licence number for the driver and offers a trip cost calculation with a consumer option to accept or reject the trip. Trips arranged by “traditional dispatch or commenced by street hail” would be required to charge the regulated rate. PFHVs would also be free to set their own rates if a city-approved app with the above feature is used. PFHVs would not be permitted to accept street hail or to use traditional dispatch;

• Open system – direct public safety controls – remove restrictions on rates and number of taxi plates. Allow private for hire vehicles to operate and regulate direct safety considerations for both through licensing; and

• Deregulation – remove restrictions on rates and number of taxi plates. Allow PFHVs to operate. Leave all safety considerations in the hands of TNCs and business owners (brokers, etc.)

Administration recommends the third option: hybrid open/controlled entry system. “Option #3 is a progressive, customer centric approach which supports the existing taxi framework and provides additional transportation options for the travelling public,” the submission said. “Calgarians want two things: safety and consumer choice.”

The next meeting is scheduled for Nov. 27 and TLAC is to report back to council on Dec. 14.