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The Honourable Harry Lali
Minister of Transportation and Highways
Parliament Buildings
Victoria, B. C. V8V 1X4
Dear Minister:
Attached please find the results of the study commissioned by you on the taxi industry in
British Columbia.
The study team has, over the past four months, met with both industry and consumers as
well as regulatory bodies. We have participated in forums sponsored by the B.C. Taxi
Association and the Vancouver Taxi Association, and have held regional meetings in
Kamloops, Prince George and Victoria. We have also held consultations with the Motor
Carrier Commission, the Insurance Corporation of British Columbia, and municipal
governments and transit authorities. A more detailed list of our consultations is attached as
Appendix C of the Report.
We hope that our work is the beginning of a process that leads to enhanced stability within
the industry and enhanced service to the public.
We appreciate being given an opportunity to conduct this review and trust that you will
find the results satisfactory.
Sincerely,
Stan Lanyon, Q.C.
Chair, Taxi Review Panel

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Table of Contents
ACKNOWLEDGEMENTS
6
METHODOLOGY
8
EXECUTIVE SUMMARY OF RECOMMENDATIONS
10
Recommendations
12
INDUSTRY OVERVIEW
23
Regulations and Jurisdiction
23
Company Structure
24
Drivers’Conditions of Employment
25
Insurance Costs
26
Vehicle Inspection
26
Vancouver International Airport
27
Other Costs to the Industry
29
Small Companies
29
Structural Problems
29
INDUSTRY OBSERVATIONS AND SUBMISSIONS
31
Territorial Boundaries
31
Fare Structure
31
Insurance Rates
32
Driver Safety
32
Inspection
33
Regulation
33
Costs
33
Consultation
33
Subsidized Public Transportation Services
34
Internal Issues
34
INTRODUCTION TO THE RECOMMENDATIONS
Regulation versus Deregulation
35
Aspects of Regulation
35
Experiments in Deregulation
35
The Seattle Experience
36
Survey of Deregulation in American Cities
36
Summary
38
The Public Role of the Industry
39

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ISSUES & RECOMMENDATIONS
41
I. Financial Condition of the Industry
41
Fare Increases
41
Service Innovations
43
Financial Disclosure
48
Employment Standards
51
II. Regulatory Scheme
54
Single Regulatory Board
54
Structure and Function of Commission
57
Advisory Committee
57
Investigation Report
58
Reconsideration and “Leave to Appeal
58
Members of the Commission
60
Motor Carrier Commission Resources
61
Jurisdiction of Commission
62
Penalties and Enforcement
62
Incorporation of Utilities Commission’s Powers
64
Protocol Agreement on Process: Sections 32 and 39
65
of the Motor Carrier Act
III. Safety and Service Issues
66
Driver Training and Certification
66
Services for People with Disabilities
69
Driver Safety
70
Vehicle Safety
72
Inspection and Enforcement
72
Inspection Facilities
75
Vehicle Criteria
75
IV. Other Recommendations
76
Traffic Flow Issues
76
Taxi Association
77
Consumer Protection
78
Vancouver International Airport
80
Merit License System
81
Issues Outside the Scope of this Study
82
CONCLUSION
84
BIBLIOGRAPHY
86

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APPENDICES
90
A. TERMS OF REFERENCE
B. QUESTIONNAIRES
C. INDUSTRY AND STAKEHOLDER CONSULTATIONS
D. RECOMMENDATIONS OF THE B.C. COALITION OF
PEOPLE WITH DISABILITIES

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ACKNOWLEDGEMENTS
We would like to acknowledge the cooperation and participation of the many individuals
and organizations who assisted in the formulation of this report. In particular we express
our appreciation to the B.C. Taxi Association and the Vancouver Taxi Association both
for their written submissions and for the organizing of forums for the participation of their
members. We also appreciate the help and participation of taxi operators in our regional
meetings in Prince George, Kelowna and Victoria. As well, many individual
representatives of companies, shareholders, owner-operators and drivers took time either
to speak to us in person or to share their experience and expertise through phone
interviews and questionnaires.
We would also like to express our appreciation to the various representatives of the Motor
Carrier Commission (in particular to Colin Hanson), the Insurance Corporation of British
Columbia, the Vancouver International Airport Authority, the Motor Vehicle Branch, the
Greater Vancouver Transit Authority, and BC Transit for their help and information.
We are also grateful for the assistance provided by various municipalities throughout the
province, in particular the City of Vancouver and the City of Surrey who provided us with
a great deal of helpful information.
Our understanding of the issues pertaining to the disabled community were greatly
enhanced by our conversations with both the Coalition of Persons with Disabilities and
Advocates for Sight Impaired Consumers.
This study would not have been possible without the support of staff at the Ministry of
Transportation and Highways, including Claire Dansereau, Associate Deputy Minister;
Linda Foubister, Corporate Policy & Planning Branch; Ian McLeod, Director of
Communications and Sherry Barnes, Secretary.

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To these people and to all the others who gave of their time so freely, our grateful
appreciation.
Taxi Study Panel
Stan Lanyon, Q.C., Chair
John Webb, Technical Advisor
Bonnie Evans, Research and Writing
Peter Seidl, Research
Ministry of Transportation and Highways
Claire Dansereau, Associate Deputy Minister
Linda Foubister, Corporate Policy & Planning Branch
Ian McLeod, Director of Communications
Sherry Barnes, Secretary

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METHODOLOGY
This study was commissioned in December of 1998 by the Honourable Harry Lali,
Minister of Transportation and Highways, to look at the current state of the taxi industry
in British Columbia. Under our terms of reference we were asked to examine the financial
condition of the industry, the regulatory scheme, and the quality of service including issues
of training and safety. We were asked to examine options for resolution of these issues,
and to develop a report and recommendations for the Minister. We were further instructed
to focus on recommendations that would not increase overall costs to the industry.
In compiling the information on which this report and our recommendations are based, we
used a variety of approaches. Individual questionnaires were sent to taxi companies, and
distributed to shareholders, owner/operators and drivers. A separate questionnaire was
sent to hotels, airports and cruise lines who rely on the industry, and another to
municipalities who have both licensing and regulatory jurisdiction. In addition to the
questionnaires, phone surveys were conducted with taxi companies outside the Lower
Mainland and with a significant number of municipalities. Committee members interviewed
members of all Lower Mainland companies and either interviewed or received submissions
and/or questionnaires from approximately 80% of companies who are licensed by the
Motor Carrier Commission outside the Lower Mainland. In addition we were able to
survey by phone a number of companies outside the Lower Mainland who hold municipal
licenses only.
We attended regional forums in Kelowna, Prince George and Victoria, and a provincial
forum sponsored by the B.C. Taxi Association as well as a Vancouver forum sponsored by
the Vancouver Taxi Association. A meeting with Vancouver Airport Taxi Drivers was
arranged with the help of the United Steelworkers, Retail Wholesale Canada. In addition
to the forums we met with representatives of both associations on many occasions and

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interviewed individual drivers as well as owner/operators and shareholders whenever
possible.
We received written submissions from both the Vancouver Taxi Association and the B.C.
Taxi Association as well as from many individuals within the industry who took the time
to send us additional information based on their own extensive experience in the industry.
If there was a weakness in this aspect of our research, it was in our inability to find an
effective way to reach drivers who are neither owner/operators nor shareholders. Those
who did respond gave us interesting and valuable insights, but we acknowledge that there
were many drivers who did not have access to the questionnaires or the forums.
Along with the industry, we consulted extensively with various stakeholder groups
including the Motor Carrier Commission, ICBC, the Greater Vancouver Transit
Authority, the City of Vancouver, the Vancouver Airport Authority, the Coalition for
Persons with Disabilities, and Advocates for Sight Impaired Consumers.
In addition we conducted a literature review that included studies of systems throughout
North America, as well as various reports on general industry issues. In order to
understand the recent history of the taxi industry in B.C., and in particular the Lower
Mainland, we relied on the work done in previous studies for the Greater Vancouver
Regional District and the Motor Carrier Commission, as well as studies of the industry in
other jurisdictions.
Our research materials are listed in the Bibliography. A detailed list of respondents is
contained in Appendix C.

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EXECUTIVE SUMMARY OF RECOMMENDATIONS
Innovation is essential to the continued economic viability of the taxi industry and to its
potential role in public transportation. Improvements must take place in the kinds of
services offered, the types of fees charged, driver training, and the safety of both drivers
and vehicles. As well there must be an improved relationship between regulators, the
industry, and municipal and regional governments.
The services offered to the public must be expanded from the “exclusive ride” concept (in
which one passenger has exclusive use of a vehicle) to include “shared ride” services such
as shuttles, mini-vans and mini-buses, and taxi pools. This will require a corresponding
change to rates structures to enable the industry to provide individual fares, flat fares, and
charter fares in addition to the traditional metered fares. Such innovations will provide the
public with greater accessibility to taxi services at lower costs, and will give the industry
new service venues through which to improve their profitability.
In order to bring about these changes there will need to be closer collaboration among all
stakeholders including the industry, regulatory bodies, municipalities, regional districts,
educators and consumer groups.
The industry must take the lead on the issues of quality and diversity of service, driver
training, and vehicle and driver safety. It must comply with Employment Standards
legislation, and move away from its traditional resistance to change and toward
implementing innovations in service and technology. Where we have found that the
industry is hampered by regulations that impede innovation or encourage unfair
competition, we have recommended change. We have opted for a model of governance
that is more inclusive of all stakeholders, not only within the existing industry, but in a
new relationship that would see the industry integrated into overall public transportation
planning.

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Few of our recommendations require legislative change; most can be accomplished
through changes to regulations. It is only in the area of municipal exemptions, the
reconsideration powers of the Commission, and in the Commission’s ability to impose
penalties that legislative changes to the Motor Carrier Act are necessary.
It was apparent throughout the consultation process that the industry wants change. We
hope these recommendations lay the foundation for an on-going process of evaluation and
innovation that will provide stability to the industry and a high standard of service to the
public.

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Recommendations
I. Financial Condition of the Industry
Fare Increases
1. We recommend a change in the fare structure in order to include a range of fares that
will increase the industry’s flexibility and competitiveness. Metered rates should not
be the only rates allowed. Other rates, such as flat rates, rates for shared rides, and
individual fares should be permissible and prescribed by the Motor Carrier
Commission in order to benefit the industry and to lower costs for consumers.
However, because the industry has had only a 1.7% increase in the last eight years, we
recommend a modest general increase.
2. We further recommend that the Motor Carrier Commission and the industry negotiate
a flat fare rate between the airport and downtown Vancouver.
3. We recommend that there be an automatic review of taxi fares every two years.
4. We further recommend that licensing fees and concession fees be considered as a cost
factor in assessing tariff increases.
Service Innovations
5. In order to allow the industry to move from the “exclusive ride” concept (i.e. a single
individual going to a particular destination) to a more flexible regime that includes
“shared rides,” we recommend that Sections 70 and 71 of the Motor Carrier
Regulations be amended to provide for shared rides and a variety of fares.

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6. We further recommend the inclusion of the taxi industry in the planning of public
transportation. This could include pilot projects to establish the best way to implement
service innovations such as services to seniors or people with disabilities at a lower
cost to consumers.
Financial Disclosure
7. We support the position of the Motor Carrier Commission in Order 70/98 that any
increase in fares be subject to full financial disclosure from all persons falling under the
jurisdiction of the Motor Carrier Act.
8. We further recommend that the industry move toward employing the technologies of
the Global Positioning System (GPS) and metered receipts in order to facilitate
financial accountability (as per Order 70/98 of the Motor Carrier Commission) and
that the costs incurred be offset by a targeted fare increase.
9. We further recommend that the Motor Carrier Commission and the industry work
together to develop standard procedures and documents in order to facilitate this
process of fuller financial disclosure.
Employment Standards
10. We affirm the exceptions to the Employment Standards Act negotiated by the industry
and the government.
11. We recommend that there be periodic and random audits of taxi companies in regard
to employment standards compliance.

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12. We further recommend that those companies found not to be in compliance be barred
from access to the tendering of provincial contracts until they fulfil a period of
compliance from six months to one year.
II. Regulatory Scheme
Single Regulatory Board
13. We recommend that there be a single regulatory Authority for the licensing and
regulation of the taxi industry. We further recommend that the structure of the Motor
Carrier Commission be changed to include a Taxi Division charged with licensing and
regulation as well as policy and planning.
14. In order to establish minimum standards for the industry, we recommend that licensing
through the Motor Carrier Commission be required for all taxis operating in British
Columbia. Thus we recommend that the municipal exemption be deleted from the
definition of “limited passenger vehicle” within the Motor Carrier Act.
15. We further recommend that municipalities continue to be allowed to license and
impose higher standards on those taxis licensed to operate in their jurisdiction.
However, municipal licensing would require the additional approval of the Motor
Carrier Commission.
16. We further recommend that – unless exceptional circumstances exist – no licenses be
issued by the Commission within municipalities without the approval of the affected
municipality.

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Structure and Function of Taxi Division
17. We recommend that an Advisory Committee be established to work with the Taxi
Division on matters of policy and planning. Such a committee should include
representation from the industry, regulatory bodies, municipalities, regional districts
and other stakeholders.
18. We recommend that all applicants for a Motor Carrier Commission license be given a
copy of the investigative report submitted by the Motor Vehicle Department, and that
they have the opportunity to make submissions in regard to that report prior to the
Commission’s decision.
19. We recommend that the “leave to appeal” provisions be deleted.
20. We recommend that the grounds on which an appeal can be made be expanded from
only the issuing of licenses to all Decisions, Orders and Directions of the Motor
Carrier Commission, and that the time respondents have to reply to an appeal be
extended from five to fourteen days.
21. We further recommend that the Reconsideration Panel be integrated into the
Commission, and that the Chairperson have the authority both to set the number of
panel members and to appoint the panel in regard to any particular application for
review.
22. We recommend that a certain number of the members of the Motor Carrier
Commission be appointed directly from the industry and also be representative of
different parts of the province.

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23. We further recommend that representatives from the Greater Vancouver Transit
Authority (TransLink) be appointed to the Commission and be among those members
hearing applications originating in the Lower Mainland.
24. We recommend that the Taxi Division of the Motor Carrier Commission be provided
with the resources necessary to adequately carry out its obligations.
Jurisdiction of Taxi Division of Motor Carrier Commission
Penalties and Enforcement
25. We recommend that the Motor Carrier Commission be given the jurisdiction to
adjudicate violations under its own constituent statute rather than having to rely on the
Courts for prosecution. Thus Section 55(1) should delete the words “on conviction
and replace them with the following or similar words: “. . . is liable for any such
breach of this Act, Regulations, or Order and the Commission may . . . .
26. The current maximum penalty under Section 55 is $500.00 for a first violation and
$1,000.00 for a second violation. These amounts are too low to act as a deterrent and
are seen as little more than a cost of doing business. We therefore recommend that the
maximum penalty for a first offence be increased to $5,000 and to $10,000 for a
second offence. The minimum penalties in each case ought to be maintained.
27. We affirm the jurisdiction of the Commission over all vehicles used to provide a taxi
service whether or not they are licensed by the Commission. In order to make this
clear, we recommend that a new Subsection (h) be added to Section 56 and read “(h)
not being a holder of a license under this Act, operates a Motor vehicle at any time
on a highway for the purpose of transporting passengers for compensation.” This

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would entitle the Commission to impose monetary penalties on all unlicensed
operators.
Incorporation of Utilities Commission’s Powers
28. We recommend that the Motor Carrier Act be updated to include a listing of its own
jurisdictional powers rather than being incorporated by reference to the Utilities
Commission Act, R.S.B.C. 1996, c. 473.
Protocol Agreement on Process: Sections 32 and 39 of the Motor Carrier Act
29. There are both overlapping and complementary roles between the Ministry of
Transportation and Highways and the Motor Carrier Commission in the development
of public policy. We therefore recommend that the Ministry of Transportation and
Highways and the Motor Carrier Commission develop a protocol agreement that
outlines their respective roles as they relate to Sections 32 and 39 of the Motor
Carrier Act.
III. Safety and Service Issues
Driver Training and Certification
30. Currently the Justice Institute’s TaxiHost program offers the only standardized
training for taxi drivers. In the Lower Mainland, only taxis operating in the City of
Vancouver or licensed under the Vancouver Airport Authority are obliged to take this
training, and it is not available in other parts of the province. We therefore recommend
that the Advisory Committee expand and enhance the current TaxiHost program.

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31. We further recommend that certification through this program be made mandatory for
all drivers in the province, and that the training be provided in ways that are both
convenient and cost-effective for drivers. (i.e. community colleges throughout the
province).
32. We recommend that a criminal record check be required for driver certification thus
eliminating the need for separate chauffeur’s permits in different jurisdictions.
33. We recommend that the possibility of financial incentives for companies who bear the
cost of training for their drivers be investigated.
34. We further recommend that training be offered for managers and owners of taxi
companies. Such training should focus on issues pertaining to financial accountability,
regulations, legal concerns, employment standards and liability matters.
Services for People with Disabilities
35. We affirm the position of the industry that service to people with disabilities is an
important component of the industry and one that should be expanded. We therefore
recommend that the issues raised by the B.C. Coalition of People with Disabilities in
their submission to this Panel be addressed by the Motor Carrier Commission and the
industry. We specifically recommend that issues of driver training and sensitivity be
addressed as part of the mandatory driver training program (see Appendix D).

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Driver Safety
36. We endorse the recommendations of the Taxi Drivers Task Force. We encourage the
implementation of strategic devices to ensure driver safety including such technologies
as barriers, cameras and lights. We note that the Vancouver Taxi Association is
recommending that taxis be equipped with cameras. We also favour the use of
cameras in taxis, but we recognize the necessity, as stated by the Task Force, for local
decision-making on all aspects of driver safety.
37. We recommend that in cases where safety strategies involve a cost to the company,
such costs be included in a targeted fare increase.
38. We further recommend that a timeline be developed to ensure that safety measures are
in place within the year.
Vehicle Safety
39. In order to enhance public safety while decreasing costs for the industry, we
recommend that the frequency of inspection be increased to every three months from
every six months.
40. We further recommend that an incentive program be put in place whereby a taxi that
passes inspection and is part of an approved preventive maintenance program, may
increase the interval between inspections to six months.
41. We recommend that ICBC review the performance of licensed inspection facilities and
restructure their licensing process to include only those facilities that can ensure
quality of service and uniform standards.

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42. We recommend that an assessment of a vehicle’s fitness for service as a taxi be based
on mileage and condition rather than on the age of the vehicle.
VI. Other Recommendations
Traffic Flow Issues
43. We affirm the right of taxis, with or without passengers, to use HOV lanes.
44. We recommend that taxis be allowed a reasonable amount of time in no-stopping
zones to load and unload customers without being ticketed.
45. We recommend that taxi companies restructure their shift change procedures in order
to ensure an adequate number of vehicles on the road at all times.
Taxi Association
46. We recommend that the Motor Carrier Commission develop a regulation requiring
mandatory membership in a province-wide taxi association for all companies operating
in British Columbia. The structure of the association must allow for regional interests
to be adequately represented. We note that this recommendation in no way precludes
companies from forming additional associations (such as the Vancouver Taxi
Association) to promote their interests.
47. We further recommend that the association be consulted and represented in all
planning and policy decisions.

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48. We further recommend that the association, in conjunction with the Motor Carrier
Commission be given joint responsibility for driver training and certification.
Consumer Protection
49. We recommend that the taxi industry, through their association, develop a standard
Passenger’s Bill of Rights and Responsibilities to be displayed in every vehicle.
50. We recommend the implementation of a comprehensive complaint procedure for
consumers and that the possibility of a complaint line sponsored by ICBC be explored
through the Advisory Committee.
51. We recommend that a standard tag for driver identification be developed. The tag
should include a number unique to the individual driver. The number should be clearly
displayed on the tag and should also be located and displayed at another place within
the vehicle where it is – through the use of Braille or raised lettering – easily accessible
to sight-impaired passengers.
52. We further recommend that all taxis have their company name and car number painted
in a prominent fashion on the exterior of their vehicles.
Vancouver International Airport
53. We recommend to the Vancouver International Airport Authority that they reinstate
“short-trip queues” in order to ensure that drivers can be adequately compensated for
their time at the airport.

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54. We further recommend that the Airport advise the drivers of the timetable for
improvements to drivers’facilities.
Merit License System
55. We recommend that the Motor Carrier Commission reserve a percentage of new
licenses for a merit lottery for drivers who could not otherwise afford to purchase a
license or a share. Such a lottery should include stringent requirements for entry.
56. We further recommend that licenses thus granted be non-transferable and liable to
revocation if the terms of the license are not met, or in the event of retirement or death
of the licensee.

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INDUSTRY OVERVIEW
Regulations and Jurisdiction
The taxi industry plays a significant although often unacknowledged role in British
Columbia’s public transportation sector. Licensing and regulation of this industry occur
primarily under the Motor Carrier Act (MCA)and the Motor Vehicle Act (MVA). There
are three general sets of motor carrier regulations based on these Acts. The Motor Carrier
Regulations (B.C. Reg. 59/59 and 252/94) define types of carriers and various services
including licensing procedures and rules about fares and tariffs. In addition, a portion of
The National Safety Code covers requirements for a range of safety-related issues and the
issuing of certificates (B.C. Reg. 26/25, Division 37). Division 25 of this regulation
provides for vehicle inspection and maintenance requirements.
While the Commission has legislative jurisdiction over motor carriers, the Motor Vehicle
Branch (MVB) is responsible for the implementation and enforcement of the motor carrier
regulations, including safety inspection of vehicles. This function has been transferred to
the Insurance Corporation of British Columbia (ICBC).
Currently 2,400 taxi cabs operating in British Columbia are licensed under the Motor
Carrier Act and Regulations through the B.C. Motor Carrier Commission (MCC). Three
hundred motor carrier authorities have been issued to operate these 2,400 taxis. Of that
number 1,117 or 47% operate in the Lower Mainland. This number includes 386 taxis
that are also licensed by the Vancouver International Airport Authority and have exclusive
rights to pick up passengers at the airport.
In addition to those taxis licensed under the MCC, an undetermined number of taxis
operate throughout the province who are either licensed municipally or in some instances
operate without any regulatory authority at all. As well, a host of alternative services

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including courtesy cars, shuttle services and limousines have encroached on the taxi
industry’s traditional territory. Some of these services are not regulated by the MCC.
Company Structure
The larger taxi companies in the province operate under a shareholder structure. The
company owns the motor carrier authority, or fleet license, with its designated number of
plates, and runs the dispatch service. A single company may have authority to operate 100
cars or more under its license, but those cars are rarely owned by the company. Vehicles
may be registered in the name of the company, but are beneficially owned by the individual
operators. Those beneficial owners are shareholders in the company. The shareholders
elect a Board of Directors who, in turn, hire the general manager who is responsible for
hiring the dispatchers. Shares in the company are not formally traded in a share market
such as the Vancouver Stock Exchange, but are actively traded in a private market.
Notwithstanding the fact that the MCC is required to approve all assignments and
transfers, the Commission’s approval is not sought, and in fact, the Commission receives
no notice that the sale of a share in a license has taken place. Most commonly, each
licensed vehicle supports two shareholders who each own a half-share. The price of shares
is market-driven and therefore varies widely depending on supply and demand. The value
in the Lower Mainland, for example, can range anywhere from a low of $30,000 in
outlying areas to as much as $160,000 for a half share in the restrictive Vancouver market.
In smaller centres in other parts of B.C., a license for one taxi might cost as little as
$6,000 to $7,000.
In addition to shareholders, the company may also lease its plates to an owner-operator
who independently owns a vehicle. Owner-operators pay a set lease fee monthly as well as
dispatch fees to the company. They also have sole responsibility for all incidental costs
related to operating their vehicle including insurance, maintenance, fuel and repairs.

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Generally these owner-operators pay lease fees from $850 to $1,400 per month and
dispatch fees ranging from $525 to $950 per month. The MCC has issued orders that call
into question the appropriateness and/or legality of the leasing of such plates.
Drivers’Conditions of Employment
Drivers who are neither shareholders nor owner-operators generally operate as
sub-contractors to the shareholder. They lease the car on a per shift/week or monthly
basis. Shifts are usually twelve hours and rates can range from a low of $40.00 to a high of
$75.00 per shift depending on location, time of day, and day of the week. Drivers are
responsible for paying their lease rate up front and for fuel costs during their shifts. A slow
shift, mechanical breakdown, or an accident can mean that a driver actually loses money
on a shift, and often even an uneventful shift results in an income below minimum wage.
The taxi industry and the Employment Standards Branch have, over the last two years,
negotiated exceptions from the Employment Standards Act. The exceptions are similar to
those that exist in the trucking industry. B.C. Order-in-Council 1110 (July 30/98), B.C.
Regulation 270/98 exempted the industry from maximum hours of work (Section 35) and
the overtime provisions (Sections 40-42). Taxi drivers may work 60 hours per week with
no daily overtime or time-and-a-half weekly overtime. Double time commences after 60
hours. (The National Safety Code states that drivers are not permitted to work more than
60 hours over a seven day cycle or 80 hours over an eight day cycle). A taxi driver who is
neither an owner-operator nor a shareholder must be paid at least minimum wage for all
hours worked, averaged over a monthly basis. The employer is obligated to “top up”
wages if the driver receives less than the minimum wage from fares. A taxi driver who
leases a vehicle is entitled, averaged over a month, to minimum wage for all hours worked,
and to recover the amount of the lease payment and any other costs associated with the
operation of the taxi including insurance. These standards, in spite of being negotiated
with the industry, are widely ignored.

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Qualifications for drivers are low — generally a Class 4 license and a Chauffeur’s Permit.
Consequently there are always drivers whose local knowledge, communication skills and
driving skills are sub-standard. The establishment of the TaxiHost program, which is
mandatory in Vancouver and for drivers operating at Vancouver International Airport, has
improved but not remedied this situation, and drivers who are not obliged to take the
program have little or no incentive for doing so.
Insurance Costs
All taxis operating in British Columbia are insured through ICBC. They pay anywhere
from $4,000/annum to $12,000/annum for insurance, depending on the region in which
they operate and their driving record. ICBC reports that the taxi industry pays premiums
totaling approximately $12 million dollars per annum. However claims are paid out at a
rate of over $16 million. Premiums have been frozen by the provincial government since
1994 resulting in a net loss to the Corporation of more than $4 million dollars in the last
year alone. The industry disputes these figures and believes that rates are artificially high.
They believe that accident liability is automatically assigned to the taxi in the case of an
accident, thereby driving up their accident liability rates and premiums.
Vehicle Inspection
The area of vehicle inspection and safety is one that is also problematic for the industry. In
earlier days, inspections were done at MVB facilities by MVB inspectors. This function
was privatized and now certified private garages do the inspections and repairs and issue
safety decals. Vehicles must be inspected twice yearly, and any vehicle is subject to
roadside safety checks at any time. The current system is inadequate both in the view of
the industry and from the perspective of public safety. The industry generally complains
that there is no consistency of standards among inspectors and that a system based on

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kilometres rather than vehicle age better reflects the different rates of vehicle usage and
the actual road-worthiness of the vehicle.
Vancouver International Airport
The number of taxis authorized to operate from the Vancouver International Airport has
not changed since the 1980s. The Airport has agreements with nine companies from
various municipalities within the Greater Vancouver Regional District (GVRD). These
agreements date from the time that Transport Canada granted these licenses based on a
lottery system open to all taxi companies in the region. Some companies who opposed the
lottery system boycotted the process, and thus had no standing when Transport Canada
began issuing licenses.
As a result there was a disproportionate number of license representations among those
companies that actually participated in the lottery, and those companies continue to hold
the operating privileges today, as shown in the chart below.
Taxi Company
Municipality (Main)
Number of YVR
Licensed Taxis
Black Top Cabs Ltd.
Vancouver
14
Bonny’s Taxi Ltd.
Burnaby
83
Coquitlam Taxi (1977) Ltd.
Coquitlam, Maple Ridge
19
Delta Sunshine Taxi (1972) Ltd.
Surrey, Delta, Tsawwassen
32
MacLures Cabs (1984) Ltd.
Vancouver
33
Richmond Cabs Ltd./ Coral Cabs Ltd. Richmond
73
Surdell Kennedy Taxi Ltd.
Surrey, Delta
34
White Rock South Surrey Taxi Ltd.
Surrey, White Rock, Langley
17
Yellow Cab Company
Vancouver
81
386
The Airport’s Corps of Commissionaires operates the dispatching of taxis to the public
and administers the rules and regulations governing taxis at the airport. The dispatch

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system will be augmented in 1999 with a new Automated Vehicle Identification System
(AVI) that will allow for the tracking and monitoring of airport licensed vehicles. This
system will allow the airport to precisely pinpoint when a taxi has picked up a passenger
and to identify taxi drivers, matching them to the vehicle and the company.
In 1993, the Airport Authority undertook a comprehensive review of taxi-related issues.
This arose out of numerous customer complaints including that drivers lacked local
knowledge, refused to take short trips, used excessive speed, lacked English language
skills, were discourteous and rude, over-charged, or refused to accept credit cards.
The Airport Authority has moved to address all of these issues, and both taxi drivers and
companies are now being made more accountable. For example, the AVI system will be
able to track both driver and company complaints. In addition, drivers were required to
take the TaxiHost training, Level One, and as of April of this year are required to take
Level Two. In July 1999, the Airport will require that vehicles be no more than nine years
old, and effective January 2000, no car may be more than seven years old. The airport will
also increase the number of cabs, including wheelchair accessible cabs. Finally, fees for
taxi companies have been adjusted to $300 per car per year with a $1.00 fee per trip. The
Authority expects these fees to cover 65% of the Airport’s costs to run the taxi system.
The Airport Authority, along with the City of Vancouver, has provided the province with
leadership in improving the quality of taxi service in B.C. This report builds, in part, on
their initiatives.

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Other Costs to the Industry
In addition to licensing, insurance and vehicle costs, the industry is subjected to a wide
variety of other fees. Aside from the fees charged to Lower Mainland companies at the
Vancouver International Airport, contracts for exclusive service at other airports and
hotels are also costly. The industry is highly competitive and bidding wars over exclusive
rights quickly drives up the price of the contract. At the Victoria airport, for example, the
contract is worth over $200,000.00. Contracts for the hotel rights can cost a company
upwards of $80,000 per annum.
Small Companies
In smaller rural centres around the province, taxi companies are usually one or two-cab
operations in which the taxi owner is also the dispatcher and driver, with much of the
business being conducted via cellular phone or pager. These are often family-run
operations and have few of the organizational problems associated with larger urban
companies. Those small companies who operate under MCC authority sometimes face
competition from non-regulated companies operating under the municipal exemption (or
in some cases outside any regulatory structure). These unregulated companies operate
outside the standards of the Motor Carrier Act which can result in unfair or ruinous
competition for their regulated competitors. Like their peers in urban centres these small
rural companies also face issues of financial instability, insurance rates, and driver and
vehicle safety.
Structural Problems
Within the larger corporate structures in the industry there are inherent organizational
problems that exacerbate distrust and exploitation internally, and make financial
accountability nearly impossible to ensure. The high costs and low profitability of the

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industry increases the incentive for everyone concerned to cut corners and hide income
wherever possible. Drivers have no vested interest in either the mechanical condition of
their vehicles or the financial success of the company. Shareholders have no way of
knowing if drivers are accurately reporting their income, and have no incentive for
rewarding drivers for improved service or skill levels. Company managers are hired by the
shareholders and are therefore limited in their ability to effectively enforce standards
among people who can hire and fire them at will. The low entry-level standards for drivers
ensures that there is always an abundant supply of drivers willing to replace those who
might complain of their treatment. The result paradoxically is an industry that is both over
and under-regulated – a situation that ill serves those within the industry and compromises
the quality of service to the general public.

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INDUSTRY OBSERVATIONS AND SUBMISSIONS
In the course of our study, we received detailed and thoughtful submissions from many
members of the industry. Their issues, while diverse, often cut across urban/rural and
large/small company lines. They included:
Territorial Boundaries
The problems with geographical boundaries are most acute within the Lower Mainland,
but other centres also have problems. Taxi companies in both Whistler and Kelowna
reported competition from companies crossing boundaries in order to operate in their
license area. In the Lower Mainland there are opposing interests. Those companies based
outside of Vancouver clearly would like to see the regulatory structure changed to one of
regional jurisdiction in order to gain access to the lucrative Vancouver market. The
Vancouver companies are adamantly opposed to such a move. The Vancouver Taxi
Association in its submission pointed out: “If the industry is made regional, the
investment made by the Vancouver companies, be they financial or fiduciary, would be
for nothing.” They further argue that the result of opening the Vancouver market would
be to flood the city with too many taxis, while abandoning the suburban areas. This issue,
which is a basic dollars and cents issue, is the primary impediment to the formation of a
single industry-wide association.
Fare Structure
No one in the industry is satisfied with the current fare structure. Both associations
recommend increased fares. In their submission, the Vancouver Taxi Association asked
that fares be adjusted every two years in order to keep up with increases in overhead. The
B.C. Taxi Association suggested that fares be tied to the cost of living index and the needs
of the industry. They further suggested that fare increases be introduced on a regional
basis according to the needs of the industry. They specifically want any costs that are a
result of new government regulation to be covered by a corresponding fare increase.

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While urban taxi companies believed their rates to be too low, there were companies in
rural areas, where distances traveled are apt to be very long, who feel that their fares
structure is too high and only serves to encourage competition from other forms of public
transportation such as shuttle buses. Both associations and their members in the various
forums acknowledged financial disclosure to be a problem in the industry. In their
submission, the B.C. Taxi Association states that “. . . .it is exceedingly difficult to ensure
that accurate financial records are kept by the shareholders/drivers and/or the lease
operators.”
Insurance Rates
Universally the industry complains that ICBC rates are too high. They mistrust ICBC’s
accident statistics for the industry. They claim that any accident involving a taxi is
automatically deemed to be the taxi’s fault no matter what the reality might be. Thus, they
say, their accident rates are unduly inflated leading to an insurance rate that is
unrealistically high. The B.C. Taxi Association wants broader lines of communication
established, and both Associations have requested a review of the rates and policies of the
insurance company.
Driver Safety
The vast majority of drivers responding to the study questionnaire and participating in the
forums said that they had experienced violence while on the job. This finding cuts across
urban and rural lines. Many reported unsatisfactory responses on the part of local law
enforcement agencies, while others questioned the lack of involvement on the part of
Workers’Compensation in ensuring workplace safety. There were several suggestions for
making taxis safer for the drivers including the use of shields, lights, and cameras. The
Vancouver Taxi Association recommends the use of on-board cameras for both customer
and driver safety.

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Inspection
Both drivers and owners are unhappy with the current inspection regime. While they
didn’t take issue with the current regulations, they felt that standards lack any uniformity,
and passing or failing an inspection too often depended on the subjective judgement of an
individual inspector. They felt that inspections should be based on number of kilometres
driven rather than being based on vehicle age. Almost universally they oppose roadside
inspections. Both associations asked for a uniform system and standards of inspection.
Regulation
In general the industry feels that it is over-regulated. It feels there are too many
regulations from too many different sources covering all aspects of the industry. A single
owner-operator, for example, may be expected to comply with overlapping regulations
from municipalities, airports, the Motor Carrier Commission, ICBC, Workers’
Compensation and Employment Standards. The industry would like a single regulatory
body to oversee their industry.
Costs
The high costs of cars, insurance, dispatch fees, training, maintenance and other overhead
costs, combined with regulated fares, means the industry operates on the narrowest of
margins. All participants would like to see some relief in insurance rates, license fees, and
fuel taxes. They would also like their service exempted from the GST which they see as
essentially a 7% fare increase that adversely affects their ridership without providing any
benefit to them.
Consultation
The industry often feels at the mercy of regulatory bodies that make decisions affecting the
industry without consultation. It would like to see an advisory body set up to work with
the major regulators in order to have input on issues such as public transit, driver training
and service standards as well.

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Subsidized Public Transportation Services
We heard many complaints from the industry about heavily subsidized public
transportation that provide service in areas where the taxi industry feels it could easily
provide comparable service at a lower rate. They argue that this would give the industry
more financial stability, and also save taxpayers countless dollars. Handi-Dart was the
primary target of their criticism, both because it operates as a direct competitor to the taxi
industry and because it receives the highest subsidy for its service.
Internal Issues
The industry recognizes that it requires an industry-wide association to adequately
represent its interests. In order to maintain the financial viability and stability of such an
association, many in the industry feel membership should be mandatory. Such an
association could assist not only with representation outside the industry, but also help to
foster an atmosphere of co-operation among the companies within the industry. For
example, the formation and use of one central dispatch in the Lower Mainland for all
Greater Vancouver taxis was an issue that received much attention in our discussions.
Most industry representatives agree that a single central dispatch would help to
dramatically reduce costs to the industry. However they also made it clear that such a
system cannot be put in place until the companies find a way to overcome their inherent
distrust of one another. It may well be that a functioning industry-wide association could
help to ease tensions and allow the companies to work more co-operatively together when
it is in their best interest to do so.

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INTRODUCTION TO THE RECOMMENDATIONS
Regulation versus Deregulation
Aspects of Regulation
There are two forms of taxi regulation – economic regulation and safety regulation.
Economic regulation primarily includes three areas – control of entry (i.e. limitation of the
number of licenses issued), control of fares, and service requirements. Safety regulation
covers vehicle and driver safety. Safety regulation is, for the most part, uncontroversial.
Consumers want to know that the vehicles are safe and the drivers skilled. Even the most
committed of deregulators continue to endorse regulations in regard to vehicle safety and
driver knowledge. Governments try to ensure that vehicles are kept in good mechanical
condition, that the drivers are of good character, and insurance coverage is adequate.
Economic regulation has been treated very differently. In an era when many industries
have undergone deregulation, governments and regulatory bodies on many different levels
believed that the deregulation of the taxi industry would prove a panacea for many of the
problems that dogged the industry. The reality has proved more problematic.
Experiments in Deregulation
Many different jurisdictions have experimented with various degrees of regulation and
deregulation. Those in favour of deregulation argued that it would provide greater entry
into the industry, resulting in increased service and faster response times, and would create
service innovations that would in turn reduce fares. As well, government regulatory costs
would be reduced or eliminated. For the most part jurisdictions where deregulation has
been tried have found that the taxi industry experienced “market failures” or “market
imperfections.” An examination of the actual data shows that, as predicted, there was a
significant increase in new entries. However there was also a decline in operational
efficiency and productivity, an increase in rates, a decline in driver income and a
deterioration in service. Seattle is a case in point.

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The Seattle Experience
In 1979 both the City of Seattle and King County moved from a highly regulated industry
to essentially a free market system for taxis. In theory this would increase the supply of
taxis thereby decreasing wait-times and driving down fares. Seattle found that putting
more taxis on the street did not have the desired effect. Instead, the over-supply of taxis
reduced the earning potential of individual drivers, who responded by increasing fares.
New drivers were untrained and inexperienced which meant that the quality of service
deteriorated. As a result demand fell. The “no show” rate actually increased after
de-regulation.
By the mid-1980s both Seattle and King County began to impose moratoriums on taxi
entries and to set maximum fare rates. Beginning in 1991 and through to 1996, both have
increasingly re-regulated the industry. The impetus for this re-regulation was the concern
expressed by the business and tourism sectors that taxi services were of poor quality and
were a significant detriment to Seattle’s attractiveness as a business and tourism
destination. Nearly two decades after the beginning of Seattle’s experiment with an open
entry system, both the city and King County are still coping with the effects in terms of
service complaints and too many operators. Recognizing their inability to hire sufficient
inspectors to deal with service problems, they opted to increase the levels of
self-enforcement in the industry. All taxis must now belong to associations, and those
associations exercise responsibility for their members.
Survey of Deregulation in American Cities
In 1993 the International Taxi Cab Foundation commissioned an analysis by Price
Waterhouse of the issue of deregulation and re-regulation. Their findings were comparable
to those of Seattle. They reported that while the supply of taxis expanded dramatically
with deregulation, there were only marginal improvements in availability and prices rose in
every instance. At the same time service quality declined – trip refusals increased, there

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was a decline in vehicle age and condition, and the over-supply of taxis resulted in
aggressive passenger solicitation.
The negative aspects of deregulation were especially evident at airports and major tourist
attractions. Deregulation therefore incurred the enmity of the business community and
attracted adverse media coverage.
By 1993, after the widespread deregulation of the industry in the United States during the
l980s, only four of twenty-one cities continued to employ a fully deregulated system.
Those four were primarily among the smaller cities in the group where the impact was less
serious. Cities that had a relatively large population, a high level of airport activity, and
conditions conducive to low-cost market entry tended to have a negative experience. As a
result these cities either fully regulated or partially re-regulated taxi services.
In retrospect, the effects of taxi deregulation have ranged from benign
to adverse, depending on local conditions and markets. There appears to
be scant evidence that deregulation fully achieved the goals on which its
implementation was premised, though some goals clearly were achieved
(e.g. more taxis, less regulatory involvement by government). Market
imperfections peculiar to the taxi industry, including unusual product
supply (e.g. first in, first out queues at cabstands) and consumers’lack
of knowledge of taxi price and quality, tend to negate the improvement
in price and performance associated with deregulation in other
industries. (Price, Waterhouse, 1993, p. 19)

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Summary
Taxis are an essential part of the urban transportation infrastructure and, some would
argue, are in the nature of a public utility. (Indeed, in this province, taxis were once
regulated by the Utilities Commission.) A deregulated market suffers from destructive,
excessive or ruinous competition. It generally has debilitating economic and social
consequences. Not the least of these is its impact on the tourism and business sectors.
Local municipal authorities as well as large institutional consumers like airports and hotels
are particularly sensitive to the tie between taxi service quality and their city’s image and
reputation. Poor treatment of tourists by taxi drivers can tarnish the city’s reputation and
drive away business. Thus, maintaining clean vehicles in good mechanical repair; ensuring
the drivers’skills, character, abilities and knowledge; as well as monitoring issues such as
fares, accurate meters and insurance coverage, all operate in the public interest.
An objective assessment of the evidence forces one to conclude that the cost of taxi
deregulation outweighs its benefits. Paul Steven Dempsey, writing in an article entitled
“Taxi Industry Regulation, De-Regulation and Re-Regulation: Paradox Market Failure” in
the Transportation Law Journal of the College of Law, University of Denver, Volume 24,
No. 1, Summer 1996, concludes:
The fundamental questions are not whether taxis should be regulated,
but how they might best be regulated. That requires careful oversight by
the regulatory body to ensure the appropriate ratio of taxis to
passengers to ensure prompt, safe, and reasonably priced service for
the public, while allowing efficient and well managed firms to earn a
reasonable return on investment.” [emphasis in original] (Dempsey, p.
117)

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As was apparent in the Seattle example, deregulation has had several negative impacts in
jurisdictions where it has been tried, including a mass influx of new operators, lower
profitability and higher fares, and lower service quality. Regulation, however, especially
control of entry, has drawbacks as well. It encourages a market value for licenses which in
turn creates a heavy financial burden for the owner. This can lead to practices that have a
debilitating effect on the industry such as license leasing. The owner becomes more
concerned with protecting the market value of the license than in providing quality service
to the public. This can also mean lower standards of service and increased consumer
complaints.
The Public Role of the Industry
The industry would like its role in the public transportation system recognized. Achieving
such recognition must begin with the industry itself. A code of ethics, driver training,
management training and the adoption of best practices can only help the industry. This
involves not only professional training for all members of the industry, but the
establishment of industry organizations to develop the standardization of services and
innovations. The taxi industry must underscore its public role and make itself known as a
responsible and active partner in the development of public transportation. This is essential
to better transportation planning and to the development of the economy of the province
in sectors such as tourism.
From a public policy standpoint, the current management structure works against the
industry. Public officials repeatedly stated that there is no continuity in the management of
companies and that this has made partnerships with the industry difficult. In addition, taxi
companies often appear indifferent to the management of their employees. Their emphasis
is on the leasing of the vehicle rather than the work habits of the driver. The inability or
unwillingness of a company to exercise control over the drivers has a debilitating effect on
the quality of service, which in turn is a deterrent to public officials considering the
inclusion of the industry in publicly funded transportation programs.

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Thus taxi firms remain outside the planning process and local funding of public
transportation. This is a loss for both the industry and the public. On the other hand,
financial problems facing both transit and taxi operators make this coordination of services
attractive. Traditionally the taxi has primarily provided what has become known as an
“exclusive ride service,” that is a service in which a single individual has exclusive use of
the vehicle for a given period of time. Not surprisingly, the industry and the passenger pay
a price for reserving this vehicle one party at a time. As a public policy alternative it has
great limitations in providing greater public access to transportation. Far greater benefit
would ensue from a system of public and private service providers operating in concert
and using a variety of types of vehicles to provide a better and less costly service.

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ISSUES AND RECOMMENDATIONS
I. Financial Condition of the Industry
Fare Increases
In 1997, the taxi industry applied to the Motor Carrier Commission for a fare rate increase
of 19%. It was their first application since 1991. While they felt a rate increase would have
been justified before 1997, they were reluctant to ask for an increase that might alienate
customers and reduce their ridership in a market where fares were already perceived to be
high. They also cited the introduction of the GST as a factor in delaying their application
until 1997. The tax had a significant impact on the cost of a cab ride, and was, in a sense, a
de facto fare increase – albeit without benefit to the company. The MCC denied the 19%
increase and instead granted a rate increase of 1.7%. The part of their findings that centred
on the issue of financial disclosure is discussed below. Other reasons given by the
Commission for their decision included:
The absence of any rate increase requests from industry between the years of 1992 and
1996 was an indicator that the industry received adequate compensation for services
rendered notwithstanding the issue of GST put forward by the industry as a major
reason for no rate increases.
The supply of taxis has remained, for the most part, constant since 1991 and the
ridership availability has increased substantially since that time. As a result, the taxi
industry in the Greater Vancouver region has enjoyed positive conditions for sustained
profitability.
The Commission stated that it is prepared to review rates again in 1999, but only if and
when the industry is prepared to be financially accountable and present appropriate
financial data at the time of application.

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