NDP creating Lower Mainland taxi monopoly, alleges B.C. Taxi Association

Glacier Media

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taxi monopoly
Photograph By ISTOCK

The B.C. Taxi Association has accused the provincial government of helping the Vancouver Taxi Association create a monopoly in the Lower Mainland with the bulk of new licences possibly winding up with one ridesharing company, government documents show.

The association’s Gurdip Sahota told Transportation and Infrastructure Minister Clare Trevena Sept 7 that allowing Surrey-based company Kater to have multiple new taxi licences through multiple taxi companies is a cause for deep concern.

“We are alarmed to learn that any taxi company would ever think of obtaining additional taxis under 15% allocation” in order to assign that number to a ridesharing company such as Kater, Sahota said according to documents obtained by Glacier Media under access to information legislation.

Sahota was referring to a report authored by industry consultant Dan Hara, Modernizing Taxi Regulation, which recommended boosting taxi fleets throughout the province by up to 15%.

This 15% increase would translate into about 300 more cabs in the Lower Mainland and about 200 more cabs in the rest of the province for a total of 500 additional vehicles, according to Trevena. The ministry confirmed the VTA has been granted 200 additional taxi licences, which represents an increase in their fleet of 15%.

Sahota Letter Sept 718 by on Scribd

Kater struck a deal last summer with the Vancouver Taxi Association, long a supporter of former Vancouver city councillor and now Premier John Horgan’s chief of staff Geoff Meggs, to secure 140 taxi licences for the tech company’s own fleet of vehicles.

A Nov. 16, 2018 letter from VTA spokesperson Carolyn Bauer said Bonny’s Taxi, Black Top Cabs, Burnaby Select Metrotown Taxi, MacLure’s Cabs, North Shore Taxi, Queen City Taxi, Richmond Cabs, Vancouver Taxi, Vancouver Taxi doing business as DBA Handicapped Cab and Yellow Cab had applied for licences which would be used by Kater.

Bauer said Kater would purchase 50 vehicles to be on the road by January 2019. Individual companies would insure vehicles. Regulation of drivers would be the same as taxi drivers, she said.

Bauer Letter by on Scribd

Bauer said in a Dec. 28 email to Passenger Transportation Board director Jan Broocke and ministry manager of policy and communication Michael McGee that by February, the VTA would have 140 vehicles on the road using the Kater app.

“These vehicles will not accept cash, all trips must be prearranged through the app and paid for through a credit card,” Bauer said. “The total will be charged to the credit card on file once the trip is complete and an immediate receipt will be sent to the customer. Also available will be a driver rating.”

The cars would have the same rates as taxis and would not hail from the streets, Bauer said.

Bauer 2 by on Scribd

The ministry did not address allegations of helping build a monopoly.

“This is a business-to-business arrangement between the Vancouver Taxi Association and Kater,” the ministry said in a statement to Glacier. “There is no agreement between Kater and the province, nor does the provincial government have any involvement in this service.

“The provincial government’s role is to regulate Kater as it would any taxi service,” the statement said. “That means all current provincial and licensing requirements will be enforced – including safety inspections, insurance, compliance with licence boundaries and other requirements.”

Sahota, however, said, “Taxi companies should not be in the ridesharing/ride-hailing business.

“The greedy and self-entitled [Vancouver] taxi association . . . is trying to establish a monopoly position through this ‘Made-in B.C.’ solution.”

By December, Trevena was being told to tell the public the existing taxi model is outdated, with a shortage of cabs that are able to operate across municipal boundaries.

“We have always said that our approach to ride-hailing should allow the taxi service to modernize its services to compete on a level playing field when new services enter the market.”

December MInisterial Note by on Scribd

Kater is one of three smartphone app-based companies vying for a foothold in the Lower Mainland market, one of the few large cities in North American without such a service. Kater was founded by Monty Sikka, CEO of Surrey-based Monark Group.

The other two firms, Uber and Lyft, can’t operate under current rules due to insurance issues, which could prevent the Passenger Transportation Board from approving services. All three firms use similar smart-phone based apps for booking trips.

But, as of December, the ministry was watching Kater.

“Kater is actively hiring drivers; however, their page and their social media activities state they are looking to initiate ride hailing in 2019,” said an email from Chantelle Gergley of the ministry’s Passenger Transportation Branch to other branch officials and Steven Haywood, executive lead for taxi modernization and ride hailing in Trevino’s deputy minister’s office.

“Our enforcement staff are actively staying connected with Kater’s developments in this area as they participate in targeted enforcement around illegal operators.”

Gergley Email by on Scribd

However, as late as early January, the Kater situation was drawing queries from the ministry’s commercial vehicle safety and enforcement section’s manager of National Safety Code issues Karen Coverett. She asked Gergley, Haywood and others that, if the VTA was holding the licences, who would hold the insurance coverage, as the VTA does not have a code certificate.

Haywood responded that each taxi company would hold the insurance for their Kater vehicles.

But that wasn’t what the minister’s staff was telling her to tell the public. In a Jan. 22 ministerial briefing note, Trevena was told, “It is very important that the people signing up as drivers for these companies understand that they are assuming all of the risk related to providing a ride-hailing service.”

People close to Meggs have told Glacier Media that the chief-of-staff will help set the government’s agenda on issues such as ride-sharing laws around Uber and Lyft stemming from his taxi industry support.

Emails obtained by Glacier Media indicate Meggs was briefed Oct. 12, 2017, by then Premier’s Office staffer Derrick Harder on Trevena’ s Oct. 16 announcement of Hara’s appointment.

Meggs apparently also received the press release to be sent out by Trevena’s office.

“I think the lede is a bit aggressive – won’t Hara recommend steps to prepare the taxi industry for the introduction of a made-in-B.C. solution?” Meggs wrote.

The words “made-in-B.C. solution” Sahota references appeared in the subsequent news release.