Page 1

An Examination of the Taxi Supply

in the Lower Mainland

prepared for

The Motor Carrier Commission

of

British Columbia

Bonnie Evans

John Webb

October 2001

ii

Table of Contents

Table of Contents ....................................................................................................ii

Acknowledgements ................................................................................................. iv

Methodology............................................................................................................v

Executive Summary..................................................................................................1

Background .........................................................................................................1

Stakeholder Observations......................................................................................3

Other Jurisdictions................................................................................................5

Factors Affecting Taxi Supply and Availability..........................................................6

Summary of Options.............................................................................................8

Introduction ............................................................................................................9

Background...........................................................................................................11

Current State of the Industry...............................................................................11

Regulation .........................................................................................................15

Stakeholder Observations .......................................................................................18

Industry ............................................................................................................18

Vancouver International Airport Authority.............................................................23

Vancouver Port Authority ....................................................................................24

Public Transit.....................................................................................................25

Hotel and Doorman’s Associations........................................................................26

Municipalities .....................................................................................................26

City of Vancouver......................................................................................................... 27

City of Burnaby ............................................................................................................ 28

Cities of Surrey and New Westminster ........................................................................... 28

Cities of Richmond, North and West Vancouver.............................................................. 29

Consumer Groups...............................................................................................31

People with Disabilities ................................................................................................. 31

Seniors ........................................................................................................................ 32

Regulating Taxicab Supply: Other Jurisdictions.........................................................34

The Ontario Experience: Changing regulations in Toronto and Ottawa ....................38

Ambassador Taxis in Toronto........................................................................................ 39

Ottawa’s Taxi Review ................................................................................................... 40

Criteria determining supply in Toronto and Ottawa......................................................... 41

Factors Affecting Taxi Supply and Availability ...........................................................43

Supply...............................................................................................................43

Availability .........................................................................................................44

Formulae and Ratios...........................................................................................45

Share/Plate Values .............................................................................................46

Other Issues..........................................................................................................49

Enforcement and Regulatory Process ...................................................................49

Options.................................................................................................................50

Supply...............................................................................................................52

Criteria ..............................................................................................................55

Boundaries ........................................................................................................57

Choosing Among the Options ..............................................................................59

Appendix A: Notice to Industry................................................................................62

Appendix B: Terms of Reference .............................................................................63

Appendix C: Questionnaires ....................................................................................66

iii

Appendix D: List of Respondents.............................................................................69

Industry ............................................................................................................69

Municipalities and Districts ..................................................................................69

Other Stakeholders

...............................................................................................70

Bibliography ..........................................................................................................71

Articles, studies, reviews and submissions ............................................................71

Statutes, Bylaws.................................................................................................74

Online Sources...................................................................................................76

Newspaper articles, press releases.......................................................................77

Index of Tables

Table 1: Licensed Taxi Companies Operating in the Lower Mainland................ 12

Table 2: Ratio of Taxis to Population: Lower Mainland.................................... 13

Table 3: Estimated Price for One Share in the Greater Vancouver Area*.......... 14

Table 4: One Taxi Company’s Annual Statistics: Year 2000 ............................. 19

Table 5: Consumer Demand by Type and Time of Day ................................... 20

Table 6: Municipal Responses to questions of supply...................................... 30

Table 7: Proportion of Wheelchair Vans in the Lower Mainland........................ 31

Table 8: Municipal Licence Fees in the Lower Mainland................................... 44

Table 9: Taxi-Population Ratios in Major Metropolitan Areas ........................... 45

Table 10: Summary of Options...................................................................... 51

iv

Acknowledgements

We would first like to thank the Motor Carrier Commission of British Columbia and its

Chair, Claude Heywood, for the opportunity of preparing this report for the Commission.

We would also like to acknowledge the cooperation of the many organizations and

individuals who participated in this consultation process. In particular we would like to

thank the BC Taxi Association and the Vancouver Taxi Association as well as those

companies and individuals within the taxi industry who took the time to answer our

questions and provide us with information and statistics.

We are also grateful for the cooperation of the various municipalities, especially the City

of Vancouver, as well as TransLink, the Port of Vancouver, the Vancouver International

Airport Authority, the British Columbia Chamber of Commerce, the North Shore Disability

Resource Centre, the B.C. Coalition of People with Disabilities, the Seniors’ Advisory

Council, and the Vancouver Hotel and Doorman’s Associations.

The staff of the Motor Carrier Department, in particular Doris Sundquist, were always

ready to answer questions and supply information.

The Taxi Advisory Committee of the Motor Carrier Commission not only supplied us with

contacts and information, but also met with us to review draft sections of the report.

This report would not have been possible without the assistance and support of the staff

of the Motor Carrier Commission. In particular we would like to thank Jan Broocke,

Director and Secretary to the Commission, whose help and advice was invaluable, along

with staffers Lisa James, Sharlene Ferguson and Michael McGee.

The individuals who gave so freely of their time and expertise in this process are listed in

Appendix D.

v

Methodology

This consultation process was commissioned by the Motor Carrier Commission in May of

2001.

We were asked to address the issue of taxi supply in the Lower Mainland, an area that

includes the Fraser Valley extending east as far as Harrison Hot Springs, and to attempt

to find answers to a number of questions including:

• Is the current supply of taxis adequate?

• What criteria should the Motor Carrier Commission use to determine supply?

• What would be the impact of increasing supply?

• Are there objective factors or indices that can be used to assess the supply?

Under our terms of reference we were asked to consult with industry, municipalities,

relevant government ministries or agencies, as well as other stakeholders such as the

Vancouver Airport Authority, the Port of Vancouver, the Tourism Bureau, and advocacy

organizations for people with disabilities and seniors. Along with those consultations, we

undertook an extensive literature review, and telephone and email correspondence with

other jurisdictions that have been grappling with the issue of supply in order that we

might assess their methods and outcomes. In particular we looked at the process and

outcomes of extensive review and reform in both Ottawa and Toronto. In addition we

drew on data acquired during the taxi study of 1999 that resulted in

A Study of the Taxi

Industry in British Columbia

, (the Lanyon Report) and from the submissions made in a

public hearing on the issue of supply of taxis in the Lower Mainland held by the Motor

Carrier Commission in September of 1999 (after the release of the Lanyon report).

It is important to note that our Terms of Reference do not ask for recommendations, but

rather for a series of options along with an analysis of their relative strengths and

weaknesses. We will attempt to lay out those options, drawing on both our exchanges

with representatives of the various stakeholders and our extensive research into the

repercussions of change in other jurisdictions.

vi

Questionnaires were distributed to municipalities and other stakeholders and interviews

were conducted either in person, by telephone or via mail/email.

Our research materials are listed in the Bibliography. Our terms of reference are

contained in Appendix B. A complete list of individuals and agencies who participated in

this review is listed in Appendix D and the questionnaires we distributed are reproduced

in Appendix C.

1

Executive Summary

The taxi industry in North America and Europe has been subject to various regimes of

regulation for the past 366 years. In Canada regulation of supply was imposed in most

cities during the thirties and forties. An exception to this was Montreal, where the supply

of taxis was actually deregulated following WWII.

During the latter decades of the twentieth century, major cities in most western and

some eastern countries experimented with various forms of deregulation and selective

regulation. Such changes were usually accompanied by studies, analyses, public

hearings and reviews. British Columbia was no exception. A series of studies of the

industry have been undertaken in this province, most recently

A Study of the Taxi

Industry in British Columbia

(the Lanyon Report)

.

While the Lanyon Report commented

on all aspects of the industry, it specifically refrained from making recommendations on

either taxi supply or territorial boundaries.

Background

There are 35 companies licensed to operated taxis in the Lower Mainland. These

companies hold a total of 1,233 certificates (plates) including approximately 85 for

wheelchair accessible vehicles. The largest companies are in Vancouver, Burnaby and

Surrey, with an average fleet size of 112. By comparison, in municipalities with a

population under 100,000, company size ranges from two or three cars to a high of ten.

Industry sources report that approximately 80 – 85% of owners drive their cars for at

least one shift. Other drivers are either casual hires or, more likely, have a lease

agreement with the owner. Lease rates, according to industry sources range from

$1,500 to $2,000 per month. That rate does not include fuel, insurance, maintenance or

dispatch fees. Dispatch fees average approximately $850 per month.

The average ratio of taxis to population in the Lower Mainland is 1:1381, considerably

below that of most other major Canadian metropolitan areas where the average ratio is

1:714.

2

The supply of taxis is limited through regulation. The Motor Carrier Commission (MCC)

licences a fleet and stipulates the number of vehicles that a licensee may operate. Each

vehicle must have a motor carrier certificate and plate. A licensee may apply, through

the regulatory process to increase the number of certificates/plates held under the

licence. Within this regulatory structure, the taxi industry has, through the creation of

corporate structures, made it possible for individual shareholders to transfer (i.e. sell)

individual shares in the company that represent all or part of a certificate/plate. The

usual practice in Vancouver is for one share to represent the equivalent of one-half a

certificate/plate – each plate being worth two shares. Because the value of certificates is

very high, most sales are of one share, rather than of the whole certificate.

While Vancouver has one of the lowest ratios of taxis to population, it has one of the

highest share values in North America. Purchase of a share essentially gives the owner

the right to one-half of a certificate – in other words, the right to drive a taxi 12 hours

per day. Share values are difficult to ascertain, and vary according to location and other

factors, but industry sources tell us that the price of a single share ranges from a low of

$75,000 to a high of $210,000.

Regulation

Taxi supply is controlled through both the issuing of licences and certificates by the

Motor Carrier Commission of British Columbia and the issuance of municipal licences.

The MCC also controls, through the conditions of licence, the territory in which the

licensee may operate. Holders of MCC plates are also required to hold municipal

business licences in the territories where they operate. Most municipalities also have

bylaws which regulate some aspects of the taxi service in their municipalities. The most

stringent standards are imposed by the City of Vancouver. In a few cases, municipalities

have withheld approval of municipal licences to owners of MCC issued plates.

3

In 1998 the MCC imposed a moratorium on licensing for all forms of passenger services

that would have an impact on taxi services. In September of 1999, that moratorium was

lifted for other forms of passenger service, but continued for taxicabs.

Stakeholder Observations

Meetings with the two industry associations were dominated by discussions of boundary

issues, enforcement and the need for greater flexibility in operations. Neither association

was opposed to an increase in supply, although the Vancouver Taxi Association saw a

greater need for an increase. They felt that Vancouver could accommodate another 25-

30 taxis. Both associations were opposed to increasing supply through the issuance of

licences to new companies, preferring to increase supply through the granting of

additional plates to existing companies. Both also suggested that caution should be used

in adding new plates while the impact on existing plates holders was assessed.

There were some differences between the companies operating inside Vancouver and

those operating in other areas in assessing their peak busy times, but all agreed that a

wait time of up to 25 minutes during busy times was not unusual. Wait periods were

influenced by the time of day, weather, season and special events. Both associations

pointed out that wait times during rush hours would not be eliminated by an increase in

taxi supply as traffic congestion was the predominate factor at those times.

All companies are aware of an increased need and demand for wheelchair accessible

vehicles. The Vancouver Taxi Association felt that a change to their conditions of licence,

allowing them to use larger van-type vehicles would free up wheelchair accessible

vehicles to more exclusively serve people with disabilities. Currently wheelchair

accessible vehicles are in demand, because of their larger carrying capacity, for cruise

ship passengers and downtown shoppers with large parcels.

Companies feel the need for more flexibility in the terms of licensing. They would like to

be able to use a certain proportion of their plates on a part time basis in order to more

efficiently respond to the peaks and lulls in their businesses. Presumably this could come

4

in the form of non-transferrable licences which, having no share value, would remain

profitable despite operating for fewer hours.

The Associations are divided on the issue of boundaries. Companies outside Vancouver

would like to see boundary restrictions removed or at least eased during peak times.

The Vancouver companies want boundaries to remain in place at all times and

enforcement of those boundaries to be stepped up.

Heavy users of taxi services, such as the Vancouver Airport, the Port of Vancouver and

the major downtown hotels, all reported delays during peak hours. The Port has

particular problems as it may need to transport as many as 6,000 to 9,000 passengers

within a two-hour time frame during the summer cruise ship season. It feels it could use

substantially more taxis than are now available, and would like to see boundaries

opened in order to use companies from outside the city.

Hotel and doorman’s associations pointed out that there is a high demand among their

customers for luxury vehicles, a niche market that neither limousine or taxi companies

have been able to fill. The MCC has recently issued 19 certificates to limousine

companies for such vehicles in order to supply that market, however City of Vancouver

bylaws will have to be amended in order for the City to grant municipal licences.

Municipalities, for the most part, feel that the supply of taxis, with the exception of

wheelchair accessible vans, is adequate. While Vancouver and Burnaby have guidelines

spelling out a certain ratio of taxis to population, neither are currently using those

guidelines. Only Surrey and Vancouver clearly stated that more taxis were needed. The

City of Vancouver has made representation to the MCC on the need for additional

services in the city. On non-supply issues, the City of Vancouver would like to see the

higher standards they impose on Vancouver taxis applied to companies in the rest of the

region, in particular the Taxi Host program for drivers. It also sees a need to improve

driver training for those drivers who operate wheelchair accessible vans and carry

people with disabilities. Several municipalities said they would like to see an easing of

5

boundaries. Smaller municipalities prefer to leave the question of regulation to the

province, pointing out that their resources are already stretched to the limit.

All stakeholders recognize the need for an increase in wheelchair accessible vehicles.

Advocacy organizations representing people with disabilities had many complaints, not

only about supply but about service and fares as well. In addition, a representative from

the City of Vancouver reported that the City continues to receive complaints about this

aspect of taxi service.

Seniors didn’t perceive supply as inadequate, but also complained about service, driver

attitudes and vehicle cleanliness. They noted that Vancouver companies had a higher

standard of service than those of other parts of the region, and felt that was due to the

TaxiHost program. They would like to see TaxiHost made mandatory throughout the

region.

Other Jurisdictions

Regulators of the taxi industry are primarily concerned with providing a quality service to

the public. Among the objectives of regulation are public safety, consumer protection,

availability of service, quality of service, reasonable profitability of service and reduction

of traffic congestion and pollution. How to accomplish these objectives is the subject of

debate, much of it ideologically driven by those who support free market principles of

supply and demand, and those support government intervention and regulation.

Ideology aside, it would appear that deregulation of the industry usually results in

oversupply, increased fares and consumer complaints, increase in traffic congestion and

aggression, and the elimination of equity in shares/plates or licences. New Zealand

appears to be an exception to this rule. While the supply, at least in urban areas, has

increased dramatically, observers note lower fares, higher standards and a more diverse

range of services. However there are some reports out of New Zealand that indicate

drivers have had a substantial reduction in earnings despite driving longer hours.

6

The government of Australia and most Australian states and territories have undertaken

various extensive reviews of the taxi industry. Both Western Australia and the Northern

Territories have deregulated supply in their regions. In both cases, compensation equal

to the full market value of existing licences was offered to owners at the time of

deregulation.

Both Greater Toronto and Ottawa, as a consequence of amalgamation, have undertaken

extensive reviews and regulatory changes to their taxi industry. Both municipalities

focussed on service quality, driver standards, share/plate value and boundaries. Toronto

introduced a new class of taxis, known as “Ambassador” taxis. With the exception of

wheelchair accessible vehicles, only Ambassador taxis are eligible for new licences in

Toronto. While holders of licences granted before this new regime was introduced

continue to be able to operate and to lease or sell their licences (now known as

“Standard” licences), Ambassador licences are non-transferrable and vehicles can only

be driven by the owner of the licence.

Ottawa, after commissioning two studies and reviewing the various options has adopted

Toronto’s Ambassador system, and is moving toward a gradual elimination of boundaries

within the new municipality.

Toronto, despite a review of criteria for determining taxi supply commissioned in 1997,

has not yet decided on criteria and is considering yet another study. Its current bylaw

stipulates that a maximum of 100 new Ambassador licences may be issued each year.

Ottawa has settled on a taxi/population ratio of 1:668.

Factors Affecting Taxi Supply and Availability

Supply can be regulated in two ways, either directly through restricting the number of

licences or plates issued, or indirectly through stringent vehicle and driver standards

combined with high licence fees. As already noted, the supply of taxis in British

Columbia is controlled through the issuing of licences and plates by the Motor Carrier

Commission at the provincial level and municipalities at the local level. Most companies

7

must obtain municipal business licences and in a few instances, municipalities withhold

those licences or impose additional regulations on the licence holder. With the exception

of wheelchair accessible vehicles, no new permanent licences or plates have been issued

by the MCC since 1998.

Criteria for determining supply vary greatly. Some municipalities use a simple population

ratio, others rely on complaints from the public. Perceptions about the adequacy of

supply are heavily influenced by the availability of the existing supply. Availability

depends on a number of factors including time of day, day of the week, time year,

weather and traffic. Competition also plays a role in determining if more taxis are

needed. Communities well served by alternate means of transportation are less likely to

perceive the taxi supply as inadequate, even if population ratios would indicate

otherwise. Generally speaking, the ratio of taxis to population in the Vancouver area is

substantially below that of other cities.

Boundaries also play a role in the calculation of supply. Drivers who have to return to

their home territories with empty taxis waste hours and fuel and are unavailable to the

public during that time.

Neither the issue of supply nor that of boundaries can be discussed without

acknowledging the underlying issue of share/certificate value. Restricted supply has

resulted in a steady increase in the market price for shares, with prices in Vancouver

going as high as $210,000 for one share. Historically it has been difficult for jurisdictions

to strike a balance between the companies’ need for market stability and the public’s

need for increased and improved service, whether the issue has been undersupply or

oversupply.

In areas where supply has been too tightly controlled a whole new shadow industry of

unlicensed, unregulated cabs has evolved. In both New York and Los Angeles, these

unlicensed cabs out-number licensed taxis. Major centres in Canada are beginning to

experience similar problems. The Pearson Airport has a high number of unlicensed cars

soliciting passengers.

8

Toronto and Ottawa have both attempted to balance the competing interests of the

companies and the public through the implementation of a new licensing classification

under which new licences can be neither transferred nor leased. Called “Ambassador

taxis”, these vehicles can only be driven by their owners and therefore can only operate

for a 12 hour shift. With the exception of wheelchair accessible vans, both cities have

stopped issuing transferable certificates (plates) although taxis licensed under previous

regulations can still be bought and sold.

Summary of Options

Supply

•

Maintain the moratorium on all vehicles

•

Maintain moratorium with the exception of wheelchair accessible

vehicles

•

Continue the moratorium on new licences but grant additional plates

to existing companies.

•

Lift the moratorium and resume the normal process for new plates

and licences.

•

Give primary responsibility for determining supply to municipalities,

the Greater Vancouver Regional District, or another regional

authority

•

Lift the moratorium but only issue a new class of non-transferable

licences with specific standards for driver training and experience

and vehicle age

Criteria

•

Issue plates based on a set ratio of population to taxis

•

Issue plates based on perceived need within communities as

expressed in the application process.

•

Issue plates based on a formula that considers population,

competition, number of visitors, availability of public transit and

other factors.

Boundaries

•

Retain existing boundaries

•

Retain existing boundaries, but allow wheelchair accessible vehicles

to pick up and deliver passengers in any region

•

Ease boundary restrictions at certain times of day and/or for certain

events.

•

Phase in boundary elimination over a period of several years

•

Eliminate all boundaries immediately

9

Introduction

The current interest in the regulation of taxi supply is not new. In 1635, King Charles I

of England ordered the licensing of London hackneys so as “to restrain the multitude

and promiscuous use of coaches”.

1

And in the same century, a system of licensing

“sedan chairs” was introduced in Japan.

2

In the more than 300 years since those first

licences were issued, the business of transporting small numbers of passengers on short

trips has been subject to legislation, regulation and review.

Regulation in Canada began in earnest during the nineteen thirties and forties when first

unemployed workers and later soldiers returning at the end of WWII began to flood the

market with taxis. By the end of the 1940s most cities in Canada as well as the United

States had put in place regulations limiting the supply of taxis. An exception to this was

Montreal, where supply was actually deregulated following WWII. Since then,

particularly over the past twenty years, the taxi industry has been regulated, de-

regulated, and re-regulated – in North America and throughout the rest of the world.

Countries as diverse as the United States, Sweden, Australia, New Zealand, Korea,

Ireland and Japan have been reviewing and experimenting with various forms of

regulation.

3

In every case, changes to the regulations governing the supply of taxis have

been highly controversial and subject to the competing interests of existing licence

holders, regulatory bodies, municipalities, and the various stakeholder groups that

represent the general public.

On the positive side, there is a wealth of information available to anyone considering

changes to their own supply regulations. Nearly every possible combination of regulatory

regime has been tried somewhere in the world and the results documented. Most major

cities and/or provinces in Canada have, in recent years, undertaken at least one detailed

studies of their taxi system, and have, as a result, implemented changes.

In British Columbia there have been several such studies. Most recently, in 1999, the

Ministry of Transportation and Highways commissioned

A Study of the Taxi Industry in

British Columbia

, (the Lanyon Report) that looked at the state of the industry

10

throughout the province and made a series of recommendations, some of which have

been adopted through legislation and/or regulation.

Although the Lanyon Report commented on the issue of regulation versus deregulation

of taxi supply, it did not make any recommendations on that subject or on the issue of

boundaries which affect availability. Specifically it said:

There are two issues of primary importance to the industry that we do not

directly address within the framework of this study – that of taxi supply and

territorial boundaries. . . .This issue [territorial boundaries] along with the issue

of supply, is of paramount concern to many in the industry. It is our view that

these issues ought to be included in the long-term public planning process

involving not only the MCC and industry, but the GVTA and the municipalities.

4

In this report, we will look at both of those issues. One cannot consider the

supply

of

taxis without also considering their

availability

. While supply is directly controlled

through licensing and regulation, availability is subject to many factors, including time of

day, weather, airport and/or port demands, traffic congestion, availability of alternate

means of transportation and, most significantly, geographical boundaries.

11

Background

Current State of the Industry

Currently there are 35 companies licensed to operate taxis in Regions 14, 14A and 15.

These regions include all of the Lower Mainland and extend up the Fraser Valley as far

as Harrison Hot Springs (District of Kent). These 35 companies hold a total of 1,233

certificates (plates) including approximately 85 plates for wheelchair accessible vans.

5

Table 1 lists existing licence holders, their location and the number of plates allocated to

them by the Motor Carrier Commission (MCC).

6

The two largest companies in the region are located in Vancouver where Yellow Cab is

the largest single licence holder with 198 certificates. Black Top, also of Vancouver, is

second in size with 160 certificates, while Bonny’s Taxi of Burnaby is third with 98

certificates. The average number of certificates per company in the three largest

municipalities (Vancouver, Surrey and Burnaby) is 112, while in municipalities with a

population of 100,000 to 175,000, the average number per company is 20. For

municipalities with populations under 100,000, numbers range from two or three cars to

a high of ten cars.

Industry sources report that approximately 80 – 85% of owners drive their cars for at

least one shift. The second shift is usually covered through a lease agreement

negotiated on a monthly or yearly basis. Non-owner driven cars are also leased.

According to industry sources, lease rates for a single shift range from $1,500 to $2,000

per month. In addition the lessee is responsible for fuel, insurance, maintenance,

dispatch fees which average $850 monthly – and in some cases – must also provide the

car.

The ratio of taxis to population in the Lower Mainland varies from place to place, but on

average is 1:1381. Table 2 shows a breakdown of ratios by municipality. Because some

companies are licensed to serve in more than one municipality, these figures are not

totally accurate, however, they give a general idea of the range of ratios within the

region. Most other large municipalities in Canada have substantially lower ratios, the

national average being 1:714.

12

Table 1: Licensed Taxi Companies Operating in the Lower Mainland

Location

Company

#Plates

Accessible

Plates

Abbotsford

Abbotsford Taxi

15

0

Central Valley Taxi Ltd.

18

n/a

Matsqui Taxi Ltd.

5

0

Agassiz

Agassiz-Harrison Taxi Ltd.

3

0

Aldergrove

Aldergrove-Langley

6

n/a

Burnaby

Bonny’s Taxi Ltd.

98

5

Burnaby Select Taxi Ltd.

4

1

Queen City Taxi Ltd.

11

2

Chilliwack

Bob’s Cabs (1973) Ltd.

10

n/a

Chilliwack Taxi Ltd.

10

2

Sardis Taxi Ltd.

5

0

Coquitlam

Gordon Wayne Wilgosh

1

0

Bel-Air Taxi (1982) Ltd.

34

2

Coquitlam Taxi (1977) Ltd.

26

0

Port Coquitlam Taxi Ltd.

12

0

Alouette Transit Systems Ltd.

7

n/a

Delta

Delta Sunshine Taxi Ltd.

26

3

Tsawwassen Taxi Ltd.

23

n/a

Maple Ridge

Meadow Ridge Taxi Ltd.

10

0

Syd’s Taxi (1984) Ltd.

10

1

Mission

Mission Taxi (1980) Ltd.

6

0

New Westminster

Royal City Taxi Ltd.

46

2

North Vancouver

North Shore Taxi (1966) Ltd.

84

1

Sunshine Cabs Limited

38

n/a

Richmond

Coral Cabs Ltd.

19

0

Kimber Cabs Ltd.

18

18

Richmond Cabs Ltd.

56

2

Surrey

Guildford Cab (1993) Ltd.

33

n/a

Newton Whalley Hi-Way Taxi Ltd.

50

2

Surdell Kennedy Taxi Ltd.

54

7

White Rock South Surrey Taxi Ltd.

45

4

Vancouver

Black Top Cabs Ltd.

160

1

McClure’s Cab (1984) Ltd.

40

0

Albert Gary Tarantino

1

0

Yellow Cab Company Ltd.

198

2

Vancouver Taxi

51

30

Total

1233

85

13

Table 2: Ratio of Taxis to Population: Lower Mainland

Location

Population

Taxis

Ratio

Vancouver

543,071

450

1:1206

Burnaby

187,992

113

1:1164

Surrey

323,509

182

1:1778

Abbotsford

111,708

38

1:2940

Richmond

157,537

93

1:1694

Coquitlam/Port Coquitlam

157,081

80

1:1964

New Westminster

52131

46

1:1133

Chilliwack

63,080

25

1:2523

North/West Vancouver

126,655

122

1:1038

The overall supply of taxis is limited through regulation. The licence to operate a taxi

company with its accompanying certificates and plates can only be obtained initially

through the regulatory process. The MCC licences a fleet and stipulates the number of

vehicles that a licensee may operate. Each vehicle must have a motor carrier certificate

and plate. The Motor Carrier Act says that a licence may not be assigned or transferred

without the approval of the Commission, and that licensees must maintain “care and

control” of their operations. Nor may a “plate or certificate” be sold independently of the

licence. Each licensee is issued a specific number of plates which may be increased from

time to time through application to the MCC.

Within these parameters, the industry has created corporate structures through which

the transfer of certificates/plates is possible. Companies are structured so that all or a

part of individual plates/certificates are owned beneficially by individual shareholders.

Each share in a company gives the purchaser a portion of the company’s assets (real

estate, dispatch system, etc.) and a 50 per cent interest in one plate. So, for example,

Yellow Cab, a licensee with a total of 198 plates would have 396 shares – each share

including a 50 per cent interest in a certificate/plate. An individual shareholder with two

shares (i.e. 100 per cent of a certificate/plate) will commonly retain one share while

14

selling the second share. Because the value of shares is very high, most sales are of one

share rather than the equivalent of a whole certificate.

The value of a share depends on various factors, including market demand, location,

whether the share is for a day or night shift and whether an airport licence is included.

The purchase price for the share may or may not include an actual car. While we cannot

state definitively the market value of a share, industry sources tell us that the price of a

single share (i.e. the equivalent of half a car) can range anywhere from $80,000 in

Coquitlam to a high of $210,000 for a taxi licensed for use in Vancouver and at the

airport. This means that the cost of a single certificate or plate (two shares) can be as

high as $420,000. This is considerably higher than any other major municipality in

Canada, and higher even than most of the major metropolitan areas in the United States

for which statistics are available. In New York City, for example, where only a handful of

licences were issued after a moratorium that lasted for more than fifty years, individual

plates (the equivalent of two shares in Vancouver) currently have a market price of

between $180,000 and $190,000 (US). Plate prices in Sydney, Australia are valued at

around $350,000 (AU)

7

while in Dublin, Ireland the average plate costs £80,000.

8

Table 3 shows the range of estimated prices paid for shares in the Vancouver area.

Table 3: Estimated Price for One Share in the Greater Vancouver Area*

Vancouver

$140,000 - $210,000

Burnaby

$75,000 - $100,000

New Westminster

$60,000 - $80,000

Surrey

$75,000 - $100,000

Coquitlam

$80,000

* Note: These are estimates only and don’t necessarily reflect actual sales.

15

Regulation

The number of taxis in the Lower Mainland is controlled through the licensing structure

of the Motor Carrier Commission (MCC) and the bylaws of municipal governments. In

addition, the Vancouver International Airport Authority contracts with individual

companies for airport service. If the contracted companies do not have airport service as

part of their condition of licensing, they must request a change from the MCC. Most

licences in the Vancouver area, issued by the Motor Carrier Commission, are for five

passenger sedans. Competing forms of transportation such as limousines, shuttle buses

and courtesy cars either operate under different conditions of licence or are unregulated

and are not specifically included in this study.

The MCC, as a condition of licensing, stipulates the territory in which a company is

authorized to conduct its business. Companies can deliver passengers to any

destination, but are not generally allowed to pick passengers up or solicit business

outside their designated zones. That means, for example, that a Burnaby company

licensed only to operate with the City of Burnaby can deliver a passenger to Vancouver

or White Rock, but cannot be dispatched to or pick up passengers in those

municipalities. Some companies operate within one municipality, but many are licensed

to operate in more than one. Thus Surrey companies may also serve Delta, and North

Vancouver companies operate in West Vancouver. Any company whose area of

operation includes more than one municipality generally has to obtain a municipal

licence for each separate municipality.

In October of 1998, the MCC issued notice that it would not accept any applications for

licensing in the Lower Mainland which would alter the supply of taxis, or any other

applications for passenger services which would impact on taxi services.

The MCC delayed hearings on this matter until the completion of a study commissioned

by the Ministry of Transportation and Highways,

A Study of the Taxi Industry in British

Columbia

, (the Lanyon Report).

16

The Lanyon Report did not comment directly on issues of taxi supply, although it did

touch on many of the factors that affect supply. It reviewed the effects of deregulation

of supply in various other jurisdictions, but did not make recommendations concerning

deregulation. It also refrained from making recommendations on the issue of boundaries

which is one of the primary factors influencing both supply and availability.

As a result of the recommendations of the Lanyon Report, the Province passed

legislation that eliminated the issuing of municipal taxi licences to companies lacking

MCC licences. Thus the Commission became the primary licensing body for taxi

companies throughout the province. At least some municipalities continue to grant or

withhold municipal licences to MCC authorized companies as well as to regulate service

and safety standards.

Municipal bylaws controlling licensing and standards for taxis vary from municipality to

municipality and are complicated by the confusion among some municipalities about

their powers under the Local Government Act (previously called the Municipal Act).

Several representatives of municipalities commented that they didn’t implement

standards and/or criteria for their local taxi companies because they felt they had no

authority to do so. Others have set in place vehicle and driver standards. The City of

Vancouver has the most stringent standards for taxi companies operating within its

jurisdiction, including standards of vehicle age, size and safety, driver qualifications and

means of operation.

In September of 1999, the MCC held a public hearing on the issue of the supply of taxis

in the Lower Mainland. As a consequence of that hearing, the MCC continued its

moratorium as it applied to “taxicabs” as defined by the Commission. However, the

moratorium was lifted on other forms of passenger transportation systems, for example,

limousines.

In March of 2001, the Commission notified the industry that it would be undertaking

consultations with industry, municipalities and other agencies and stakeholders in order

to gain a better understanding of perceptions about the supply of taxis and in order to

17

identify factors that influence the supply of taxis in the region. The moratorium would be

continued until that consultation process was completed. (Appendix A: Notice to

Industry)

18

Stakeholder Observations

Industry

Meetings were held with the two industry associations. The Vancouver Taxi Association

represents three of four companies operating within the City of Vancouver, Yellow Cab

Company, Black Top Cab Company and McClure’s Cabs. The BC Taxi Association is a

provincial organization representing many of the companies outside of Vancouver and

one company in Vancouver. The meetings were dominated by issues of boundaries,

enforcement, and regulatory flexibility. On the specific question of supply, there was

general agreement among the representatives of the Vancouver Taxi Association that

the city could sustain another 25 – 30 taxis with certain provisos, while the BC Taxi

Association was less certain of the need to increase supply.

Both associations, understandably, were strongly opposed to issuing licences to new

companies who might wish to enter the market. They would like to see any increase in

supply come in the form of additional certificates/plates issued to existing companies. As

noted above, share prices are very high in this region and shareowners were especially

concerned with protecting the value of their investment. There were suggestions by

both associations that new licences and/or plates should be added incrementally or as

temporary, time-limited plates while the impact on existing business is studied.

Both Associations said that the use by specific client populations as well as the weather,

season, and the time of month/week/day determine how busy they are. The Vancouver

Taxi Association reported a marked difference in demand between daytime and night

time shifts, as did several members of the BC Taxi Association. However, one

representative from a Surrey company said that an analysis of their trips sheets showed

no difference between the day and night time shifts – that both shifts averaged 1000

trips per day with 30 cars.

19

One company, operating in the City of Vancouver and at the Vancouver International

Airport, provided us with their statistics for the year 2000 which are detailed in Table 4.

Table 4: One Taxi Company’s Annual Statistics: Year 2000

Average trips per cab

15,020

Trip cost average

$7.70

Average vehicle revenue

$115,647.77

Average wait time (normal conditions)

8 minutes

Average wait time (inclement)

14 minutes

Average travel time

14 minutes

Average distance traveled

3.25 kms.

YVR trips as percentage of total trips

1.56%

Percentage of YVR trips to downtown core

70%

Vancouver taxis are busiest at rush hour on a rainy day, and wait times for customers

during those times can be very long. Average wait times during normal periods for both

associations were reported as averaging 10 minutes under normal conditions (i.e. not

rush hour) and up to 25 minutes during peak times or inclement weather. With the

exception of Burnaby, whose patterns closely follow those of Vancouver, taxi companies

in the outlying municipalities, such as Surrey, New Westminster, and Coquitlam, are

busiest during the winter. Vancouver and Burnaby companies both profit from

Vancouver’s summertime tourism industry, while other municipalities experience a

slowdown in summertime business. In the words of one representative of a taxi

company in Surrey, “People don’t come to Surrey in the summer; people leave Surrey in

the summer.”

All companies report that they are very busy near the end of the month when social

assistance cheques are issued. They also reported a dramatic increase in the use of taxis

by social service and other agencies (e.g. Ministry of Human Resources, Insurance

Corporation of British Columbia, Workers’ Compensation Board) to transport their

clients.

20

Table 5: Consumer Demand by Type and Time of Day

Vancouver Taxis

Suburban Taxis

4– 6 am

Airport trips

Airport trips

6 – 9 am

(Rush hour) Airport,

Workers, schools, cruise

ships

(Rush hour) workers,

schools, post office, airport

10 am – 2 pm

(Lull) workers moving

around downtown, seniors,

medical appointments,

MHR, WCB clients

(Steady) Seniors, medical

appointments, courier

services, MHR, WCB clients

2 pm- 5 pm

(Rush hour) workers,

schools

(Rush hour) workers,

schools, post office, ball

teams

5 pm – 7 pm

End of rush hour,

restaurants, shows

Handidart overruns, tour

bus drop-offs, restaurants

7 pm – 3 pm

(Very slow) except for mini-

rush at bar closing

bars, casinos, restaurants,

shows (including employees

of those businesses)

Weekends

(Busy) tourists, shows,

bars, restaurants

(Slow) shows, bars,

casinos, restaurants

Summers

(Busy) extra tourist volume

(Slow) Very limited tourist

activity, little school activity

Proximity to major transportation centres such as the Port of Vancouver and BC Ferry

terminals has an impact on demand, although in the case of the Port, the demand

comes in a very narrow window. Both associations complained about competitors who

either operate under different conditions of licence from the taxi companies, such as

limousines and shuttle buses, or who are unregulated, for example, vanpools.

HandiDart, a service for transporting people with disabilities, came in for a large share of

21

the criticism as a subsidized competitor. While several companies also have working

relationships with HandiDart, taking their overflow, it is an uneasy relationship at best.

The associations suggested a variety of criteria for evaluating the need for an increase in

the supply of taxis. Wait times, population increases, increase in arrivals at the airport

and port were all suggested as factors to be considered. One representative from Surrey

felt strongly that no single formula is really workable because local factors vary

significantly from place to place. Several representatives from both associations pointed

out that wait times during rush hour are not likely to be significantly affected by an

increase in the supply of taxis, as traffic conditions (traffic gridlock, construction) are the

dominating factors during that time.

Both associations agree that there is a need for an increase in wheelchair accessible

vans. One company in Vancouver reported that demand for wheelchair accessible

service exceeded their capacity by 600%. A Surrey representative reported that the

addition of four wheelchair accessible vans to their company fleet had no negative

impact on ridership in the rest of their fleet, but rather brought them new ridership and

increased referrals from HandiDart.

The Vancouver Taxi Association pointed out that the wheelchair accessible vans

currently on the road are often used at venues like the Port of Vancouver, where

passengers tend to have more luggage than will fit in a conventional taxi. They pointed

out that the acquisition of non-wheelchair accessible vans would meet the demand for

increased carrying space. This would have the effect of freeing up wheelchair vans to

serve the customers who need them. The City of Vancouver recently amended its

bylaws to allow the use of non-wheelchair accessible vans. Companies wishing to take

advantage of this change by adding such vans to their fleets will have to apply to the

MCC for a change in their conditions of licence.

Both associations feel that the restrictions imposed by regulations make it more difficult

to run profitable businesses, and in discussing the possibility of an increase in supply,

had several suggestions as to the issuance of licences that would allow them to operate

22

more efficiently. They talked about the need for more flexibility in hours of operations –

that a system whereby some plates could be used on a part time basis during busy

periods, rather than 24 hours a day would give them much needed flexibility.

It should be noted, however, that there appears to be some misunderstanding as to

regulation. There is no Motor Carrier licensing requirement that compels licence holders

to operate their vehicles 24 hours per day, so it may be that the motivation to keep cars

on the road all the t