{"id":123011,"date":"2017-10-11T04:49:16","date_gmt":"2017-10-11T08:49:16","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=123011"},"modified":"2017-10-11T04:49:16","modified_gmt":"2017-10-11T08:49:16","slug":"livelihoods-versus-technology-the-future-of-quebecs-control-over-taxi-industry","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2017\/10\/11\/livelihoods-versus-technology-the-future-of-quebecs-control-over-taxi-industry\/","title":{"rendered":"Livelihoods versus technology: the future of Quebec’s control over taxi industry"},"content":{"rendered":"
\"FILE:<\/a>
FILE: The price of a permit has decreased almost 40 per cent since Uber began operating in Quebec about four years ago, according to the province’s Transport Department. (Photo: Jaakko Hakulinen\/Flickr)<\/figcaption><\/figure>\n

MONTREAL \u2014 The head of one of the companies offering financing for taxi permits in Montreal insists there is still a market for the much-devalued commodity.<\/p>\n

The price of a permit has decreased almost 40 per cent since Uber began operating in Quebec about four years ago, according to the province’s Transport Department.<\/p>\n

Michel Hebert’s company, FinTaxi, is doing what it can to prop up the market by refusing to finance permits at a value below $110,000 \u2014 regardless of how much a seller is willing to offer.<\/p>\n

\u201cWe think the value of the taxi permit is higher than $110,000,\u201d Hebert said in an interview. \u201cAnd we are keeping that base.\u201d<\/p>\n

FinTaxi is wholly owned by the Fonds de solidarite FTQ, a massive investment fund with ties to the province’s largest labour federation, which counts the taxi drivers’ union among its members.<\/p>\n

Organized labour in Quebec doesn’t only have a vested interest in the future of the government-controlled taxi system to save jobs \u2014 there are tens of millions of dollars on the line for the Fonds FTQ if the permit market goes bust.<\/p>\n

FinTaxi and two branches of the Desjardins credit union finance the vast majority of taxi permits in Montreal and the city’s market is valued at hundreds of millions of dollars.<\/p>\n

It’s this web of thousands of livelihoods and millions of dollars that makes the crisis facing the province’s taxi industry so complicated.<\/p>\n

And Quebec has given itself six months to try and solve it and to chart a path for the future.<\/p>\n

Over the next half-year, taxi industry stakeholders and the Transport Department will try to come up with a formula to compensate taxi drivers and permit holders who have been hit hard financially since Uber’s arrival.<\/p>\n

It’s unlikely, however, that the Quebec government will relinquish its control over the taxi industry and dissolve the permit system, said Vincent Geloso of the right-leaning Montreal Economic Institute.<\/p>\n

\u201cThis is an issue where the government is crudely counting votes,\u201d he said. \u201cThere are few votes to gain from allowing competition.\u201d<\/p>\n

Quebec’s Transport Department limits the number of taxi permits in each city across the province, thereby ensuring a stable market for the taxi industry.<\/p>\n

The value of a permit in Montreal reached roughly $200,000 in 2014.<\/p>\n

Hundreds of taxi drivers have borrowed up to 75 per cent of the permit value from FinTaxi in order to buy the right to drive a taxi in the province.<\/p>\n

When Uber entered the market, it operated illegally outside the government-controlled permit system, thereby increasing the offer and diluting the value of the permits.<\/p>\n

Dominic Lemieux, whose union represents taxi drivers, said during the upcoming negotiations his side will push for an \u201cequitable system.\u201d<\/p>\n

\u201cWe all want to play on the same field,\u201d he said. \u201cBut we also don’t want to have a system where it’s a race to the bottom.\u201d<\/p>\n

Uber’s platform allows people with a car to spend a few hours a week making extra cash driving people around.<\/p>\n

That economic model has called into question whether driving a taxi can realistically continue to be a full-time job with a market protected by government regulation.<\/p>\n

\u201cWhy impoverish thousands of taxi workers to give a side income to people who already have a livelihood?\u201d Lemieux asked.<\/p>\n

Uber has been operating legally in Quebec under a pilot project since last October.<\/p>\n

The Transport Department said it would renew Uber’s pilot project for one year \u2014 but included more regulation that Uber has rejected.<\/p>\n

Uber has threatened to leave Quebec by this Saturday if it can’t reach a new deal with the provincial government.<\/p>\n

Whether Uber stays or goes is irrelevant to the precedent Quebec has set regarding who has the right to innovate in the province, Geloso said.<\/p>\n

\u201cQuebec is saying, to innovate in this province, you have to seek permission from the government,\u201d he said.<\/p>\n

One of the innovators to receive such permission is Teo Taxi, a company with a fleet of 120 electric vehicles but not a single taxi permit.<\/p>\n

Instead, Teo has a \u201cspecial regulation\u201d with the Quebec government allowing it to bypass the law that limits one company or person from leasing more than 20 permits, said Jean Vachon, a company spokesman.<\/p>\n

Teo operates within the government-controlled system and leases 100 permits \u2014 but has plans to grow significantly.<\/p>\n

When Teo began in 2015, it guaranteed a permit holder a seven per cent return a year on a value of $180,000.<\/p>\n

\u201cThe value of the permit has decreased since then,\u201d Vachon said.<\/p>\n

Teo is at the government negotiation table and would like to see a \u201ccirculation of permits that maintain their value,\u201d within the government-controlled system.<\/p>\n

\u201cIt’s relatively easy to become a taxi driver,\u201d Vachon said. \u201cIf we don’t limit the offer, there will be too many who will make a small revenue.<\/p>\n

\u201cTechnology should be at the service of society, not society at the service of technology. Modernization that starves people is not modernization.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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