What will you pay when Uber has no competition?
Update March 7, 7pm: The Vazken Kerametlian quote indicating airport Taxi drivers charge $65 per ride downtown was provided to Taxi News in January, 2024. In mid-February, the rate was increased to $70.
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Half of Toronto’s fleet of 5,500 licensed Taxis are now gone. This is not good news for consumers.
As of January 6, 2024 there were just 2,764 licensed Taxis working in Toronto. 1,785 of these plates are on vehicles which will age out and require replacement by January 1, 2025; whether or not their owners believe it is worth putting an expensive new vehicle on the street remains to be seen.
1610 plates have been returned to the City by drivers who cannot make enough money to renew them. In the worst-case scenario, a scant 1,000 licensed Taxis would remain operating next New Year’s, as compared to 55,000 rideshare vehicles.
All of this may seem like inside baseball, of no concern to consumers who care mainly that their ride is cheap and available quickly.
However, consumers grown accustomed to the idea of City-dictated rates (as with Taxis) and venture-capital subsidized rates (like Uber, to date) are not looking ahead to the day when there are no Taxis left, and Uber can charge whatever it wants in a market with no real competition.
This scene is beginning to play out now at Pearson Airport, where the Greater Toronto Airport Authority is re-negotiating ground transportation permits. Taxi and Limo drivers have received an insanely detailed, 46-page document dictating not only that they pay more money for the privilege of picking up passengers, but if they dare to discuss the financial details of their deal with ANYONE, in ANY WAY, their permit will be cancelled.
The details of the GTAA’s deals with Uber and Lyft are not being released.
“Passengers coming out of Arrivals walk straight into a swarm of Ubers,” airport driver Vazken Kerametlian tells Taxi News. “They generally never even get to where the Taxis are standing; but when Uber is surging prices during a snow storm, they come looking for us.
“What will happen when all the Taxis are gone?” Kerametlian asks. “We can only charge $65 to downtown Toronto. Uber can charge anything it wants. What then?”
“What then?” seems like a reasonable question to ask. Maybe the only person asking it is Probe Toronto private investigator Gary Walsh, who filed a complaint against Uber with Canada’s Competition Bureau on February 14th.
Walsh believes that Uber has intentionally used a predatory pricing program designed to drive market-priced competitors out of business for over a decade.
“Everyone following the market knows that Uber never made a profit until the second quarter of 2023,” says Walsh.
In fact, although Uber was founded in 2009, “from 2016 through the first quarter of 2023, Uber collectively racked up close to $30 billion in operating losses,” according to S&P Global Market Intelligence. “The company posted its first quarterly operating profit in the second quarter of 2023.”
In his February 14th, 2024 complaint, Walsh wrote “Specifically, Uber controls in excess of 51 per cent of the Toronto taxi market because nearly 3000 (sic) of the existent 5500 Toronto taxi licenses have been turned back to the city.”
“The most glaring evidence,” Walsh’s letter states, “is that for Uber, for the last quarter of 2023 posted its first profit ever thus it can be concluded they have always lost money using its corporate might to subsidize the costs of those…trips to remain artificially low – 40 per cent less than Toronto taxi fares.”
On its current trajectory, Toronto’s Taxis will be a thing of the past in a few short years, and Uber can charge consumers whatever it wants.
What then?
