No cab licence required: Sioux Lookout deregulates its taxi industry

Anyone with a car can now pick up passengers in the northwestern community. Will the move actually make travel cheaper and more convenient?
By Brennan Doherty - Published on Mar 16, 2020
Last month, Sioux Lookout’s town council got rid of its taxi-licensing system. (Colin Perkel/CP)

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Doug Lawrance says issues related to taxi companies have been among the most rancorous he’s faced as the mayor of Sioux Lookout. The others have to do with garbage collection.

Bickering with the town’s cabbies about licensing fees, fares, and insurance in a business with razor-thin margins taxed everyone’s patience, he explains. So, last month, Sioux Lookout’s town council put a stop to the arguments by ripping up its licensing system completely. Anyone with a car can now pick up passengers without the need for a taxi licence. “We’re out of it now,” Lawrance says. “We don’t set the price of a bottle of milk in the store; we don’t set the price of a taxi ride.”

Readers unfamiliar with Sioux Lookout may assume that getting a cab in a town 350 kilometres northwest of Thunder Bay is difficult if not impossible. They’d be wrong. Small-town Ontario is nearly devoid of public-transit options, so taxis often fill the gap whenever someone can’t drive (car won’t start) or shouldn’t drive (a few pints too many). Without comprehensive bus or rail service, some Ontario towns are considering making it easier for cabbies to get behind the wheel — some experts, though, warn that deregulated options don’t necessarily provide more affordable service.

Most of Sioux Lookout’s visitors arrive by air. The town is a major medical and educational hub for dozens of First Nations communities across northwestern Ontario. Last year, Lawrance says, Sioux Lookout had 90,000 overnight stays in hotels and hostels on the edge of town for outpatient services at the Meno Ya Win Health Centre. One of the agencies responsible for coordinating health care provides its own in-house transportation system for patients, Lawrence says, while Handi Transit — a not-for-profit that runs two large vans on daytime routes — serves as a proto-bus system for Sioux Lookout’s roughly 5,200 residents.

Bracebridge, a town on the Muskoka River, is also considering deregulating its taxi industry. Mayor Graydon Smith says that its rules aren’t particularly onerous for drivers but that the town struggles to retain good drivers and provide regular service when local bars close for the night. In fact, Smith’s main rationale for deregulation is to provide more safe options for getting home after a night on the town. “We want them to make the right choice,” he says.

Not everyone agrees that deregulation is the right idea. Matti Siemiatycki, an associate professor in the University of Toronto’s department of geography and planning, says that Uber tries to sell riders on its affordability compared to traditional taxis but that the benefit evaporates in periods of so-called surge pricing, when demand is high. “It's at that point that people are looking for taxis, which are regulated and have a fixed price,” he explains. “It cuts both ways.”

Sandy Sethi, a dispatcher with Muskoka Taxi — which is based in nearby Gravenhurst but operates in Bracebridge — says many people flock to the Ontario town only during the summer cottage season anyhow. She believes that anyone who wants to drive a local cab should be rooted in the community through registration or property ownership. “It should be regulated,” she says. (TVO.org reached out to every listed cab company in Sioux Lookout for comment — one says that it is no longer in business, and another declined to comment. The remainder failed to respond or did not have anyone available for comment.)

Offering any kind of affordable mass-transit option in small-town Ontario can be difficult. “It’s the challenge of geography,” says Siemiatycki. Residents of smaller communities travel greater distances than their city-slicker counterparts and live in lower-density areas, making transportation more expensive. Siemiatycki says that both distance and density “put a sharper point” on the need for a solution.

Faced with such challenges to delivering service, Innisfil, a town in Simcoe County just north of the GTA, struck up an arrangement with Uber to subsidize rides for residents. Paul Pentikainen, Innisfil’s senior policy planner, says the pilot, introduced in 2017, cost roughly $800,000 last year. A conventional bus route would have been cheaper, he acknowledges, but it wouldn’t have provided door-to-door coverage at all hours of the day or night. “For us, this is a way that we can provide coverage across the entire town more cost-effectively,” he says.

Pentikainen says that Innisfil’s project has attracted international interest, but Siemiatycki questions whether it would be a viable long-term option for smaller Ontario communities. In a report to council co-authored by Pentikainen last March, city staff noted that the pilot’s gross costs for the unpaid portion of Innisfil Uber trips would likely be close to $1.2 million — up from the $900,000 or so set aside in the town’s budget. Municipal staff recommended hiking fares for all trips to and from a variety of destinations, including local GO bus stops, community centres, and an industrial park. “Now they’re looking for ways to cut back — either by rationing how many rides people can have, or by raising the cost,” Siemiatycki says.

There are also questions about how ride-sharing services compare to taxis in terms of safety. Siemiatycki hadn’t looked at any academic studies on the topic but acknowledges that questions have arisen in the press. Earlier this month, the Globe and Mail reported that Nicholas Cameron’s mother and girlfriend filed a multimillion-dollar lawsuit against Uber alleging “wanton and outrageous disregard” for safety. Cameron died in a crash on Toronto’s Gardiner Expressway nearly two years ago. “I think it’s critical that you have those regulations in place that puts safety first and that makes it the paramount consideration of any type of service that’s being provided,” Siemiatycki says. Uber says it conducts background and driving-record checks on its partners every year.   

A spokesperson for Uber suggests the company’s model can work in smaller Ontario towns. “In smaller communities, Uber offers residents both flexible work opportunities and access to more conventional transportation options,” Uber spokesperson Evangeline George wrote in an emailed statement to TVO.org.

Innisfil also has taxis, although Pentikainen says they’re licensed by the town under the same restrictions as Uber drivers. Municipal council has waived the usual licensing fees on Innisfil’s three taxi companies every year since the pilot began, he notes, but this isn’t a guaranteed arrangement.

Lawrance says he hasn’t received any complaints about the decision to deregulate Sioux Lookout’s taxi industry— although he notes that Uber isn’t currently operating there. Unlike in nearly every municipality considering this issue, the majority of local taxi companies agreed with the idea, he says, adding that at least one resident has asked him why the town had been regulating taxis in the first place. In terms of service quality, he notes that he doesn’t believe that taxis needed a regulator to ensure standards. When council was considering its decision, Lawrance says, he asked municipal staff to look into all complaints about taxis over the past two years: “They couldn’t remember the last complaint about taxis.”

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