Table of Contents
FOREWORD PART I: INTRODUCTION
PART I: INTRODUCTION1
PART II: BACKGROUND 5
PART III: INCENTIVES FOR CHANGE12
PART IV: BEST PRACTICES27
PART V: THE SOLUTION44
Executive Summary of the Review of the Toronto Taxi Industry
This study was conducted on behalf of the Task Force to Review the Taxi Industry (the Task Force). The Task Force is chaired by Councillor Denzil Minnan-Wong and is comprised of the following members: Councillor Brian Ashton, Councillor Brad Duguid, Councillor Dennis Fotinos, Councillor Doug Holyday, Councillor Howard Moscoe, and Councillor Bill Saundercook.
The purpose of the review is to consider the financial and legal aspects of the industry as presented in various reports and submissions to the Task Force, and provide recommendations to meet the prescribed goals of the Task Force.
The work of the Task Force is supported by a staff team, chaired by the Commissioner of Urban Planning and Development Services, and represented by the Office of the Mayor, Licensing, Legal, Finance/Treasury, and the Corporate Policy and Planning Division of the CAO's Office. An external consultant, StrategyCorp. Inc., also provides support to the staff resource team. The role of the staff resource team is to provide an independent analysis for the consideration of the Task Force in their development of policy options respecting the taxicab industry.
Part I of this report provides an introduction by way of a description of the guiding principles and goals of the Task Force. It also discusses the approach to the study and scope of the review.
Part II of the report presents background information including a brief overview of the history of the taxi industry in the City of Toronto. It addresses the significant policy changes that have led to the evolution of plate values, leasing and the current industry structure.
Part III of the report introduces the issues facing the Toronto Taxicab industry and the incentives for Toronto Council to implement change. It also provides a summary of the feedback and proposed solutions received from taxicab stakeholders.
Part IV of the report includes an overview of the best practice examples culled in the research.
Part V of the report includes the recommendations, organized by a five key points for reform to meet the guiding principles and goals of the Task Force. Recommendations are addressed with respect to regulation and enforcement, structure of the industry, working conditions, customer service, and quality of taxicabs. This section also includes recommendations respecting the development of an implementation plan that will address a performance review plan and a communications plan.
PART I: INTRODUCTION
At its meeting on April 16, 1998, by adoption of Clause No. 2 of Report No. 3 of the Emergency and Protective Services Committee, the Council of the City of Toronto established a Task Force to Review the Taxi Industry. The creation of this Task Force was the culmination of a number of recent articles and the concerns expressed by the public, taxi owners and drivers, the Toronto Board of Trade and the tourism industry respecting the state of the taxi industry in Toronto. These concerns include:
Council endorsed a work plan on ways to reform the taxi industry based on the following guiding principles:
The goals of the review are defined in the report to the Task Force dated June 22, 1998 and entitled "Status of the Review of the Toronto Taxi Industry", namely to propose recommendations, an implementation plan and communication plan that will ensure that the Toronto Taxicab industry:
Recognizing the growing frustration within the taxicab industry and on the part of the Toronto public respecting the deteriorating condition of taxicabs and taxicab service, Council established the Task Force with a very aggressive schedule to report on ways to improve the taxicab industry. The original timeline of 90 days was subsequently extended to provide additional time for staff to research and consider the complexity of the industry and how it is likely to respond to various changes. This extension was also to accommodate the busy meeting schedules of Task Force and Emergency and Protective Services (EPS) Committee members and the following timeline is now established:
Release of Report October 7, 1998
Task Force to Review the Taxi Industry October 22, 1998
Special EPS Committee to hear deputations October 27, 1998
Council October 28-30 or November 25-27, 1998
The approach to the study is to compile and understand information about the Toronto taxicab industry and the issues now plaguing it. Every effort was made to consider as much input directly from industry participants as possible. Comparisons to other jurisdictions are made respecting similar problems, failed reforms, and best practices. Recognizing the short timeframe, priority was given to the most severe issues: Toronto Licensing and enforcement, structure of the industry, quality of vehicles, skills of drivers, and customer service. Various options were assessed in terms of legal liability and financial and operational impacts.
The proposed solution was developed by testing various scenarios with respect to achievement of Task Force principles and goals, ability to implement within a reasonable timeframe, and the impact on stakeholders. The implementation of the recommendations, most importantly, should enhance the image of Toronto taxicabs from the eyes of the public and visitors and should improve immediately, and over time, to become a positive reflection on Toronto as a world-class city.
Although an implementation plan is critical to the success of such initiatives, time did not permit for a specific plan to be developed. However, the report does provide some guidance in this regard.
1.4 Scope of the Review
The report provides an overview of the industry including historical background information and the legislative regulations; a summary of issues identified by many stakeholders; financial, legal and policy analysis of options for solutions; and recommendations for reform that meet the goals of the Task Force to Review the Taxi Industry. The work proceeded in three phases as defined in the approved workplan; namely, research and consultation, analysis, and report and recommendations.
1.4.1 Research and Consultation
The research conducted addressed the best practices and experiences of other jurisdictions in initiatives taken to reform troubled taxi industries. Successful experiences in London England, New York City, Halifax, Vancouver, and Montreal were studied in more detail and summaries of the relevant elements of these jurisdictions are included later in the report. The research also focussed on economic and financial reviews of renowned experts and academics.
The resource team gathered extensive statistical information from Toronto Licensing and the various submissions to the Task Force in an effort to reasonably describe the current operating environment. This included an overview of the By-law, relevant sections of the Municipal Act and sample enforcement and commission scenarios.
An integral part of the researching phase included consultation through public deputations that were held on June 9th 1998. Stakeholders, including drivers, owners, designated agents, tourism industry representatives, and a few members of the taxi-riding public, presented their individual perspectives on the problems facing the industry and proposed solutions for reform. Taxicab industry stakeholders were also invited to submit written materials or provide comments to the Task Force hotline. Although views among stakeholders vary and there was often no consensus on issues for drivers or owners as a group, all views were given careful consideration by the Task Force. A summary of these concerns is included later in this report.
A list of research materials and submissions received are included in the Appendix to the report and copies of materials are available in the Clerks office for review as provided for within the Municipal Freedom of Information and Protection of Privacy Act.
1.4.2 Analysis and Consultation
Consultation was a key component to the workplan that continued through the analysis phase of the work. Workshop sessions that were held on July 6, 1998, were considered by the Task Force to be a rewarding exercise that offered a useful source of information and possible solutions. The workshops provided participants the opportunity to debate issues and consider solutions to improve the industry within the context of the legal framework that will set the boundaries for any short-term change. The intent of the workshop discussions was to provide a forum for interactive discussion among different points of view. Comments were taken in context, recognizing that participants presented their own individual perspectives and did not necessarily represent the views of others. Nonetheless, many of the workshops were successful in reaching consensus on a number of solutions that work towards achieving the goals for the Task Force. A summary of the work achieved by the workshops is included later in the report.
The financial analysis includes the development of a financial model of the supply and demand relationship for taxi services, an analysis of the viability of various taxi industry reform options, and an analysis of the impact on plate values, lease rates, driver income, and operating costs for these various options. The legal feedback provides opinions on various proposed solutions within the context of the existing legislative framework. From a policy perspective, recommendations are presented to ensure that the goals of the Task Force are met, giving consideration to the legal and financial information.
1.4.3 Report and Recommendations
The report and recommendations are comprised of five relatively distinct components, as described in the forward to the report. The key points to the 50 recommendations in this report can be organized by five points that:
1. Creates a Taxicab Passenger Bill of Rights
2. Creates Ambassador Class Taxicabs
3. Improves Training
4. Improves the Training
5. Strengthens Enforcement
Once considered by the Task Force to Review the Taxi Industry meeting scheduled for October 22, 1998, the report is to be submitted to a special meeting of the Emergency and Protective Services Committee on October 27, 1998, at which time, public deputations will be heard. It is expected that the Emergency and Protective Services Committee will forward the report to the October 28-30 or November 25-27, 1998 meeting of Council for approval. It is therefore recommended that the Task Force approve the attached draft Report of the Task Force to Review the Taxi Industry and forward it to the Emergency and Protective Services Committee and Council for approval (Recommendation No. 1).
PART II: BACKGROUND
2.1 Industry Overview
The taxicab industry in the City of Toronto has grown considerably since the former Metropolitan Licensing Commission, (MLC) (now known as Toronto Licensing) was formed in 1953. The evolution to the industry structure has seen varied trends in the approach to allocating licenses and the characteristics of licenses. Other significant features that influence the current operating environment include provisions in the By-law related to vehicle quality, training requirements, and industry culture. These characteristics all impact the level of customer service provided by the taxicab industry.
In 1953, 1,500 taxicab licenses were issued and no new licenses were issued until 1961. In 1968, three owner's lists were set up based on the number of taxis already owned (1 license, 2-9 licenses, and 10 or more licenses), and new issues occurred in a proportion of 50:20:20:10. By 1973, the number of licenses had increased to 2,105. In 1976, as a result of the Lastman report, the list to acquire a taxicab license was combined with new issues going to owners and drivers in the ratio of 1:9. In 1985, the ratio was changed to the current ratio of 1:1 for owners to drivers.
To be placed on the drivers' list for license issuance, a driver must drive full-time for three years. After issuance of a license, a driver must comply with all aspects of the By-law, including driving full-time for a five-year probationary period, after which time, the license can be leased or sold. To remain on the owners' list for license issuance, owners must manage taxicabs on a daily basis for a five-year period. During this period, an owner can rent the taxicab on a daily basis, but, they cannot lease the license and a designated agent cannot represent them. Owners that are not bound by this probationary period can lease their taxicab and may choose to be represented by a designated agent. The current waiting time for a new license is estimated to be in excess of 20 years. Figure 1 below shows the number of licenses issued over the period 1976 to 1996. The last issue occurred in 1993, when 68 new plates were issued, for a total of 3,480 plates in circulation.
Figure 1 - License Issuance 1976-1996
Source: Toronto Licensing Commission
Two key economic features of licenses were introduced as the Toronto taxicab industry evolved that are, in part, responsible for the state of industry today. The first critical change to the characteristics of taxicab licenses occurred in 1963 when the MLC allowed licenses to be sold on the open market. This change was significant in that up to this time, a license was only valuable as a means to make an income from driving. The ability to sell the license in the open market transformed it into a capital asset, with value created by a limited supply.
The second change occurred in 1974 when the former Metropolitan Toronto Licensing Commission permitted the leasing of taxicab licenses. Under the provisions of leasing, owners are required to provide a maintained and insured vehicle that is fully equipped and licensed as a taxicab. This change was introduced for several reasons. First, the Commission felt it was unable to enforce the then current By-law prohibiting leasing due to collusion between the driver and owner. Second, some felt it was better for drivers, because in most cases it was cheaper to lease than to rent on a daily basis. Third, leasing created a perception by many drivers that it allowed them to achieve status of entrepreneur rather than driver/employee.
The proliferation of plate leasing can be observed from Figure 2 below, increasing from 32.1 per cent of available plates in 1982, to 78.0 per cent in 1997. Table 1 below shows plate value for the same period, and the rate of return implied by the lease rates (market capitalization of lease rates). The rate of return remained relatively stable at approximately 12.6 per cent per annum. Under current conditions, the rate of return represents a spread approximately 8.0 per cent over a risk-free investment such as Canada bonds. Presumably, the spread represents the risk-premium associated with investing in a taxi license.
Figure 2 - Plate Lease Trend 1982-1997
Table 1 - Rate of Return Implied by Plate Value and Lease Rates
Lease Rate $
Rate of Return
on Plates %
2.2 Industry Structure
Over the years, a variety of arrangements have evolved between plate ownership and the delivery of taxicab services. The result is an industry structure that provides for up to five participants to be associated with each taxicab: owner, Designated Agent (DA), lessee, driver, and an alternate driver.
2.4.1 From the Point of View of the Owner
There are generally three options available to a plate owner. These options include:
(i) Hire a designated agent: lease or give control of the plate to a designated agent for a monthly fee;
(ii) Lease directly to a driver: lease the plate directly to a driver; or
(iii) Owner-driver: drive the taxicab with an option to hire alternate drivers on a shift basis.
The first two options are associated with plate owners who do not wish to be active in the daily driving of a taxicab. With respect to the third option, the license owner may join a brokerage, operate independently, or operate as a member of the Independent Taxicab Operators Co-operative.
2.4.2 From the Point of View of the Designated Agent
A designated agent will usually enter into a lease or shift rental agreement with a driver on the owner's behalf. Designated Agents must be licensed as a taxicab owner or a driver and were introduced, primarily for the benefit of elderly owners and industry widows, to assist in the management of taxicabs. A designated agent will:
(i) lease a plate on behalf of the owner to a driver without providing a car;
(ii) lease a plate to a driver along with insurance and brokerage services without providing a car; or
(iii) lease on a weekly or monthly basis or rent on a daily shift basis the plate along with a car, insurance, and brokerage services.
If the agreement is on a monthly basis, the driver is generally expected to provide for the car and associated operating costs, including fuel, radio/meter rental, dispatch fees, insurance, and maintenance, even though this arrangement contravenes the current By-law. With a weekly lease or daily shift rental, the designated agent usually provides the vehicle and related costs, while the driver pays a weekly or daily fee plus fuel. Each arrangement dictates a different range of payment.
From the Point of View of the Lessee
A lessee has two options available:
(i) drive the taxicab with the option of hiring alternate drivers; or
(ii) rent the taxicab on a daily shift basis.
It should be noted that subleasing is not allowed under the current By-law provisions.
From the Point of View of the Driver
A driver has several options available to operate a taxicab and may:
(i) lease a plate, either through an owner directly or through a designated agent;
(ii) purchase a plate on the open market; or
(iii) acquire a newly issued plate from Toronto Licensing (if they qualify on the drivers' list).
There are generally three possible lease arrangements:
(1) Cash-in: Drivers obtain a taxicab and equipment on a shift basis from the agent or lessee. The average cost of a taxicab for a shift is $65. It is estimated that 22 per cent of drivers operate on this basis.
(2) Plate lease only: The agent provides the plate and the lessee provides the vehicle and pays the insurance and brokerage fees. According to Toronto Licensing records, in 1997, the average cost of this form of lease is approximately $850.00 per month.
(3) Package deal: The designated agent provides the plate, insurance, and brokerage fees. The lessee provides the vehicle. The average cost of a package is reportedly $2,000-$2,500 per month, a 40-50 per cent mark-up.
The break down of the number of direct plate leases and package deal leases is not known, however, records indicate that a total of 1,339 leases are under control of a designated agent, or 39 per cent of total plates.
2.3 Customer Service Quality
The decline in customer service quality is a trend influenced by the economic and qualitative factors of the taxicab industry. License characteristics and the structure of the taxicab industry have evolved a culture that is generally not focussed on customer service. Other characteristics of the industry that contribute to the lack of customer service include the quality of the fleet and the training requirements for drivers.
2.3.1 The Toronto Taxicab Fleet is Aging
Toronto Licensing records show that the quality of taxicabs is declining due to an increasingly aging fleet. Currently, over 55 per cent of the taxicabs are over six models years old, compared to 20 per cent in 1994 and 0 per cent prior to 1990. The percentage of newer vehicles in the fleet has steadily decreased since 1982, as shown in Figure 3. The aging fleet is attributable to the age extension in the By-law, which allows vehicles beyond six model years of age to remain on the road, provided that they do not have more than two major mechanical failures.
Figure 3 - Age of Fleet
Training Requirements for Drivers
In 1996, Toronto Licensing replaced its three-day training program with an upgraded training program that runs for 16 days and covers a fairly comprehensive curriculum. The majority of licensed drivers, approximately 11,000, are operating from the outdated original training program.
The Current Operating Environment
The Toronto taxicab industry is regulated by the City of Toronto as provided for in the Municipal Act and by By-law 20-85. In May, 1998, the City of Toronto Council approved Report No. 6 of the Special Committee to Review the Final Report of the Toronto Transition Team that recommended the separation of the administrative and adjudicative functions that previously formed the former MLC. The adjudicative process, previously conducted by the Licensing Commission, will be carried out by the Licensing Tribunal once the changes are implemented. Toronto Licensing is the administrative body and operates as a service area under the Department of Urban Planning and Development Services that reports to the City of Toronto Council through the Emergency and Protective Services Committee. Toronto Licensing is currently undergoing restructuring process that is expected to be complete by the end of 1998.
2.6 Legislative Framework
Toronto Legal Services provides the following general principles of law respecting the authority of Council and the governing of the taxicab industry. Municipal Councils' possess authority granted by law and the authority to enact by-laws for the licensing, regulating and governing of businesses that is contained in section 257.2 of the Municipal Act. The specific authority of the Toronto City Council to enact by-laws for the licensing, regulating and owners and drivers of taxicabs is contained in section 232 of the Municipal Act.
There are two key components of the Municipal Act that have influenced specific recommendations in this report. The first deals with the purpose of municipal licensing and the second deals with the provision of taxicab services by airport plated taxicabs within the boundaries of the City of Toronto.
With respect to municipal licensing purposes, in simple terms, the courts have limited the licensing authority of municipalities to regulating for municipal purposes and not participating in the business arrangements between industry participants. With respect to airport plated taxicab, an exemption in the Municipal Act currently exists, that allows airport taxicabs to pick-up fares within the City of Toronto boundaries. This facilitates taxicabs, unlicensed by the City of Toronto, to pick up fares within City boundaries under the guise of transporting passengers to the airport.
By-law 20-85 is the governing legislation established by the municipality, and sets out the controls for the Toronto taxicab industry. The By-law is extremely complex and is the result of isolated changes made over the years. The intention of the By-law and the objective of regulation is to serve the interests of the public, while offering a structure that can support the wellbeing of its participants. The By-law addresses provisions for quality and inspection of vehicles, enforcement, responsibility and accountability of industry participants, and training requirements. There are a number of provisions in the By-law that are difficult to enforce or have not been given priority by Toronto Licensing. These issues are discussed in more detail in the report.
PART III: INCENTIVES FOR CHANGE
The taxicab industry background reveals its incentives for change: a disjointed system of poor customer service, declining taxicab quality based on an aging fleet, and a complex, sometimes ineffective, regulatory system. The majority of stakeholders who consulted with the Task Force have serious concerns with the industry. Moreover, the image of the taxicab industry is not positive to residents or visitors to Toronto, nor is it suitable for a world class city.
The incentives for change are described in this section by observations of the industry and feedback from stakeholders that describe problems and propose solutions.
3.1 Industry Observations
Issues are discussed with respect to regulation and enforcement, industry structure, customer service, and vehicle quality. Comments are derived from the evaluation of industry statistics and research, and also from letters received from the public.
The structure of the industry has given rise to the absentee owner, and furthermore, has led to notion of a taxicab plate as a financial investment similar to other income-producing investments such as bond, further boosting the plate's market value. The higher the market value, the less opportunity a driver has to purchase a plate. As long as the supply of plates is restricted and there is surplus of taxi drivers, drivers will continue to depend on leased plates.,
It is believed, with plate leasing and the creation of the middleman or designated agent, a growing number of plate owners have a decreased incentive to provide a high quality or type of service since it has no direct financial impact. The owner's financial benefits stem from plate lease revenues. Therefore the greatest benefit would be to keep the lease fees at a high percentage of the driver's gross earnings and promoting practices to keep the operating costs low. Thus vehicle replacement is deferred to the extent that is allowed by the By-law.
The City has received many complaints from the public and visitors who are dissatisfied with the service provided by Toronto taxicabs. Some speak of rudeness and refusal to accept passengers who are travelling a short distance. Other letters address the physical condition of taxicabs that feel unsafe and leave a poor impression on the City of Toronto. Some link the state of Toronto taxicabs as a negative in the bid to host the Olympics in 2008. One such letter from a concerned citizen referred to the deplorable state of taxis in Toronto and compared them to service "reminiscent of the third world with beaten up cars and interiors, non-existent suspensions and questionable safety standards. Add to this surly drivers with few language skills and little or no city knowledge and we've got a major problem." The content of this letter reflects a common public perception of the taxicab industry as the message is repeated in many letters received by the Task Force.
The aging taxicab fleet is increasingly affected by rising vehicle inspection failure rates. It is estimated that 70 taxicabs are providing service to the public under dangerous and unsafe conditions at any one time. One recent inspection noted a vehicle in service with nine mechanical defects that would each render the vehicle dangerous and unsafe. Recent taxicab random inspection blitzes resulted in pulling 14 out of 21 taxicabs inspected (67%) out of service.
It would appear that owner-operated taxicabs are maintained at a higher quality standard than fleet vehicles. Figure 4 shows the Toronto Licensing vehicle inspection failure rates for the years from 1992 to 1996 broken down in the categories of owner, agent and lease.
Figure 4 - Vehicle Inspection Failure Rates
Prearranged vehicle inspections are held three times a year. Although all three categories show an increase in failure rates from 1992 to 1996, the failure rate and the percent increase is significantly lower for owner-operated taxicabs in comparison to Designated Agents and lessees.
The proportion of owner-drivers have been on a steady decline with only 25 per cent of the industry remaining as owner-drivers. This decline is perhaps partly responsible for the deterioration in customer service and taxicab quality.
3.2 Stakeholder Feedback
Many industry participants advocate change although the ideas and proposals among them vary greatly. It should be noted that a significant number expressed frustration towards the Task Force, noting that the industry has been over-studied without meaningful change. Many note increasing frustration as the quality and respect of their industry disintegrates around them.
This section provides an overview of the key issues, concerns, and proposals for change that were received by the Task Force through deputations, written submissions, the Task Force hotline, and the workshops. The main issues supported by the research and the focus of the submissions include:
1. reform to Toronto Licensing, particularly with respect to enforcement and unlicensed and out-of-town taxicabs;
2. industry structure and the resulting safety and working conditions for drivers;
3. customer service skills of drivers; and
4. quality of taxicabs.
3.2.1 Regulation and Enforcement
Many in the industry place responsibility for the current issues, and particularly the lack of enforcement, Toronto Licensing. Those who commented, supported the recent change to separate the administrative and adjudicative functions, although they noted that it is too early to conclude whether improvement has been achieved.
There was complete consensus to improve the enforcement of out-of-town and unlicensed cabs in Toronto. Industry participants articulated that the lack of monitoring and enforcement of the activity of cabs from other jurisdictions has seriously hampered the ability of Toronto cabbies to earn a fair wage. Many demanded additional enforcement staff while some felt that a common look for Toronto taxicabs would help enforcement efforts, and others suggested an increase to the fine, penalty and regular spot checks.
Although there is general support for three scheduled inspections annually, a number of participants commented that the inspection process is often confusing and they are not provided with vehicle inspection requirements. As a result, many have their vehicles pre-inspected by a mechanic, and fail the Toronto Licensing inspection because they aren't aware of the criteria they are trying to meet. Otherwise, there was general agreement that the current inspection program is acceptable. Some participants also suggested that pre-hearing for show cause hearings should be abolished and replaced with fines.
Possible corruption in the industry and the inaction to deal with certain by-law contraventions such as plate leasing, was also raised as a concern, as was the undefined roles of Designated Agents. One of the workshops recommended that the Licensing Commission needs more authority to impose more meaningful penalties. Others suggested that the Commission should have industry representation or transfer responsibility for industry regulation to transportation experts such as the TTC. A number of participants also called for the transfer of responsibility for public complaints from Toronto Licensing to individual brokerages.
Some participants also suggested that Licensing should provide for more taxi stands, particularly in strategic high traffic areas such as the Sky Dome and the new Air Canada Centre.
3.2.2 Industry Structure
Concerns raised with respect to industry structure focussed on the perception that deplorable working conditions for many drivers results from the current industry structure. Many stakeholders passionately linked low driver income to the poor quality of service. They felt that pride in one's work and the ability to earn a reasonable wage directly relates to the quality of service offered to the customer. Many drivers indicated that low wages result from leasing and too many participants in the organizational chain.
Chain of Participants
Comments regarding the chain of participants also included widespread agreement that absentee owners and passive investors are often an unnecessary and detrimental link in the chain. Several participants concluded that measures must be put in place to limit or abolish absentee owners by increasing responsibilities for owners to ensure they add value to the industry. There was general agreement that taxicabs should not serve purely as investments to individuals not committed to the industry. One of the workshops suggested that licenses of absentee owners be taxed at a higher rate by the City. Although many stakeholders feel that taxicab licenses should not be viewed as a pension, most are sensitive to retirees and industry widows.
Some industry participants argue for the elimination of Designated Agents, while others indicate that management services offered by Designated Agents are necessary.
There is no consensus on how to reform the industry structure to resolve issues associated with leasing. Some suggest that leasing should be abolished and others felt that leasing is necessary to ensure continuous service during the night and for periods of inclement weather. Others felt that leasing should continue within particular controls respecting rates and terms. Similar positions were stated respecting Designated Agents and whether they should continue as part of the industry and in what capacity. One of the workshops suggested that Toronto Licensing should assume the role of designated agent or regulate Designated Agents.
The majority of parties who spoke agreed that pride of ownership is a necessary component to the success and commitment of industry participants. However, deputants were outspoken on the methods that should be employed in determining whether the present structure should be expanded by distributing new plates or buying-back and redistributing old plates. While there was division regarding whether owners or drivers interest should predominate in the decision-making process, there was general agreement that aging cabbies and their families, who now rely on their plate as a pension, should be given adequate protection. Alongside discussions regarding the distribution of plates, participants expressed strong opinions on the merits of limiting the transferability of existing and future plates. Some supported the existing system of unlimited rights of transferability. Others argued that the plate is the property of the City and thus it should revert back to the City when the owner ceases to use the plate for the purpose for which it was intended.
Similarly, with respect to new plates, some felt that the market has greatly improved since the early 1990's and that the market could support more taxicabs. In fact, some participants suggested that the market should determine the appropriate number of taxicabs to serve Toronto. Other participants suggested that there are already too many taxicabs on Toronto streets and that additional taxicabs would lead to even lower incomes for drivers, and more pollution and congestion.
A number of drivers support a solely owner-driver taxicab system that maintains a one-plate for one-driver situation, as an ideal goal for the industry. Many agree that drivers who have a greater stake in the business provide better service. Some proposed that the owners and drivers lists should be abolished altogether or that license issuance should be limited to those who intend to operate the taxicab as an owner-operator. Although there was no consensus on how to reach this goal, one workshop suggested that any plan should allow drivers to get a plate within five-ten years.
One of the workshops reached agreement that open deregulation would not benefit the industry and that opportunities for the City to purchase licenses from absentee owners and the distribution of licenses only to drivers should be explored. Another group commented that the inflated cost of licenses now prohibit most drivers from buying a license on the open market. Many participants suggest that the plate should be considered an asset such that it can be used for collateral to finance the purchase of a plate. One other option presented called for the City to provide a lease-to-own plan for taxicab licenses.
One of the workshops proposed a two-tiered system of taxicabs with a standard service and a higher quality ambassador service to focus on business and tourism. This system calls for a higher level of driver training with limited acceptance to phase in the increase and to serve as a barrier to entry, distinguishable vehicles, possibly higher tariffs, and non-transferable licenses. One of the workshops concluded that owners or brokerages should assist drivers in establishing a pension. They also feel that the taxicab and taxicab expenses should be the owner's responsibility and not passed on to drivers. Many suggest that a Driver's Bill of Rights should be put in place and that the Taxicab Advisory Committee should be equitably represented, including public representation, and democratically elected.
3.2.3 Customer Service
There is little denial among industry participants, that customer service in the taxicab industry is inadequate and must be addressed. The industry is concerned respecting its perceived image and many individuals expressed the desire to participate in change that will focus on customer service. While examples of exceptional service exist and many drivers operate sensitively to customer needs, the majority of public feedback creates a view of a corrupt and complacent industry. Often, passengers complain of reckless driving and unprofessional services.
"Members of the Toronto Board of Trade have become increasingly concerned about the frequency and severity of complaints about taxis. These complaints have come from customers at their businesses (restaurants, hotels, entertainment venues), as well as from their own personal experiences. Many of the complaints have to do with the cleanliness of the vehicle, the courteousness of the driver or the driver's knowledge/comprehension of City destinations." (The Toronto Board of Trade, Submission to City of Toronto Task Force to Review the Taxi Industry)
It should be noted that a number of drivers, although in agreement that customers deserve top rate service, indicate that they are barred from providing such service due to unfair working conditions. Some participants agree that if Toronto taxicabs were safe, reliable, and offered exceptional service, more Toronto residents and visitors would use taxicabs.
All five workshops agreed that a Taxicab Passenger Bill of Rights, visibly posted in each taxicab, would prove an effective measure to communicate a positive vision for the taxicab industry to customers. Many suggest that it would set expectations for customers and performance requirements for drivers. As such, participants feel that the Taxicab Passenger Bill of Rights should include condition of the taxicab, qualifications and services provided by the driver, and information respecting complaints if services are inadequate.
Issues were raised in a number of workshops respecting taxicab services for the disabled, and many felt that more focus should be given to increasing services for passengers with special needs. Some taxicab customers with disabilities indicate that it is often difficult to arrange for taxicab services, particularly for short trips. They also note that many drivers do not offer assistance into or out of the taxicab and some are reluctant to provide service to people with seeing-eye dogs. Other issues include securing wheelchairs and scooters, using side barriers on ramps, seeking passengers waiting indoors, and leaving a no show slip so passengers can make alternate arrangements. One suggestion is to provide incentives for such services such as a minimum fare for each trip that could be funded by the industry. While many drivers express sensitivity to special needs, they also raised concerns that such services require more time to provide assistance or load wheelchairs and consequently, the number of overall passengers served and revenues are reduced.
A number of participants relate the quality of customer service to driver training and feel that an integral step to deliver better service is to provide better training. Many participants cite examples of other jurisdictions where taxicab drivers are perceived professionally. Some feel that a number of poor quality drivers in Toronto create a bad impression for the industry and that more rigorous screening would increase driver standards and value. In addition, some propose that penalties imposed on bad drivers would force them to improve service or leave the industry.
A number of individuals suggest that the current training program offered by Toronto Licensing is a significant improvement over the recently reformed three-day program. However, they note that an expanded version of the course would introduce a more professional image for the industry. For that reason, many support a suggestion that training should be provided by colleges or other outside institutions and others feel that brokerages should participate in training. In order to achieve the desired standard of professional drivers, some participants suggest that english language and comprehension should be a prerequisite to training. Suggestions for the training program include: Toronto geography and tourism, taxicab safety, driver safety, hospitality, gender sensitivity, business practices, promoting a professional image, preventative vehicle maintenance and standard in-car training. A number of individuals felt that drivers should participate in the development of the training program. Some participants suggest that new licenses should be probationary and that drivers should be required to prove their abilities before receiving a full license. Others propose that a driver's qualifications and accomplishment should be visibly posted in the taxicab.
Many participants suggest that while a new advanced training program would produce new high quality drivers, many of the existing drivers operate from the three-day training program and would benefit from retraining. Many support the concept of regular mandatory training that would encourage continuous improvement by drivers and could relay current tourism information. Many agree that any training program should offer some flexibility for evening classes to allow drivers to continue working while completing training requirements.
Finally, some participants note that drivers would only be receptive to advanced training if they could be assured of a reasonable wage in return.
Driver Safety is considered a key issue by some participants who indicate that taxicab drivers are open targets for aggressive and criminal acts. There is no consensus in the industry, however, on actions to improve driver safety. Many recognize the importance of awareness and suggest that training can prepare drivers for most situations they encounter. Others express extreme vulnerability and feel that extreme measures, such as barriers between passengers and drivers, cameras, panic buttons and prepayment systems are required.
3.2.4 Quality of Taxicabs
There was little defense expressed by stakeholders for the current condition of many Toronto taxicabs. Some indicate that the structure of the industry does not provide for investment in better taxicabs. Concerns were widespread and include high operating costs, particularly with respect to insurance and demands for key money, and corruption in the industry. While most participants agree that the vehicle age extension should be eliminated, a few feel that if a car passes a rigorous safety inspection, it should remain on the road. Some participants also support an extended vehicle retirement date for owner-operated taxicabs, as they do not get as much use as a fleet vehicle.
There is no consensus on appropriate vehicle quality provisions. Proposals range from no limitations subject to mechanical inspections to provisions for brand new vehicles that will be retired from the taxicab industry by five model years old, and every option in between. Some suggest that more onerous provisions could not be supported since drivers are often forced to pay for the vehicle, even though the By-law requires the owner to provide the taxicab. A few stakeholders propose banning the use of former police vehicles as taxicabs, recognizing the rigorous use subjected to police vehicles.
There is general agreement that improvements to vehicle quality regulations should be phased in, to ease the financial burden of replacing taxicabs, particularly for fleets. Many agreed that the vehicle and quality provisions for vehicles must be economically viable for stakeholders.
Through research, deputations, written submissions, and workshops, the Task Force considered a number of proposals and suggestions for reforms. While some plans were comprehensive, others were general in nature, however general support for change is evident in most submissions. Nevertheless, all ideas have been duly considered, and while no single plan, in isolation, is recommended for adoption, the proposed solution collects elements of many individual submissions to form a solution that meets the principles and goals of the Task Force.
The analysis consists of two main components that include:
1. a discussion respecting a number of proposed solutions; and
2. a financial comparison of a number of options presenting impacts on the industry, based on specific assumptions, if various changes are introduced.
3.3 Proposed Solutions
As evidenced by the appendix, more than 70 submissions were submitted by stakeholders that offered a myriad of recommendations for reform. The discussion below, does not exhaust each individual proposal submitted to the Task Force. Rather, it provides a general summary of comprehensive submissions and attempts to address the key proposals raised by stakeholders.
The Toronto Board of Trade Proposal
The Toronto Board of Trade recommended a 5-point plan to reform the taxi industry in Toronto that is comprised of the following:
The Toronto Board of Trade also submitted a report to the Task Force entitled "Improving the Quality of Toronto's Taxi Industry" dated June 1998, that proposes "quality as the cornerstone" and addresses a number of regulation and enforcement matters. The report raises safety, driver ability, and driver income as key issues. The Board of Trade also indicates that acceptance and compliance of the By-law by industry participants would provide the ability for the By-law to be meaningfully enforced. The Board of Trade notes concern that the intention of the current regulations is to ensure quality service, however, "they are not being enforced on the road". While the report refers to "numerous calls to review the existing set of regulations in order to update, eliminate and redefine the provisions", it indicates that the Task Force, in such a short time frame will not be able to complete that task. In their view, the Task Force should focus on those sections of the By-law that address quality of the taxicab industry.
Task Force Response to the Toronto Board of Trade Proposal
The recommendations in this report address the concerns raised by the Board of Trade by improving vehicle quality, addressing provisions for lease cancellations, and regulating Designated Agents. The Provincial Safety Standards Certification is part of the inspection criteria currently used, along with more specific criteria used by the Toronto Licensing inspection facility. Recognizing the concerns associated with quality of vehicles, more lenient mechanical inspections are not supported. With respect to joint ownership of taxicabs between owners and drivers, the principle of the plan is to ensure that owners assume responsibility for their taxicabs and that Toronto Licensing aggressively enforce the contravention of the By-law respecting vehicle ownership that commonly takes place.
The Fotinos Plan
The Fotinos Plan is premised on the creation of a separate statutory entity, the Toronto Taxi Authority, of which City Council shall be the sole shareholder. It proposes that the Toronto Taxi Authority issue bonds for the purposes of financing a compensation scheme for existing taxicab owners.
The plan calls for taxicab owners to receive payment for licenses calculated by applying a 13 per cent annual rate of return on the original purchase price of the license, to a maximum of the current market value of $85,000.00. Licenses would be returned to the City and leased to drivers, for an estimated $650.00 per month, to finance the compensation plan. Over time, excess funding could be applied to the serve the industry and its participants.
Response to the Fotinos Plan
Legal Services advise that there is no express or implied grant of authority to City Council to create the proposed Toronto Taxi Authority and issue bonds for the purposes of financing a compensation scheme for existing taxicab owners. Specifically, the authority of City Council, as it relates to the provision of funds to business enterprises, is prescribed by section 111 of the Municipal Act. By this provision, City Council "shall not assist directly or indirectly and commercial enterprise through the granting of bonuses in aid thereof, and, shall not grant assistance by giving or lending any property of the municipality, including money." The opinion of Toronto Legal Services is that the making of ex-gratia payments to holders of taxicab owners licenses through a Taxicab Authority established by the City for this purpose constitutes direct assistance to a commercial enterprise through the giving of money. Accordingly, by reason of section 111 of the Municipal Act, City Council lacks the authority to make such payments.
With respect to the issuance of debentures to finance the purchase of taxicab licenses from current owners, section 147 of the Municipal Act provides that a municipality may incur debt for municipal purposes. In addition, section 140 of the Municipal Act suggests that debentures may be issued for municipal capital purposes with enduring benefit to taxpayers. Payment on licenses that the City already has the authority to issue or revoke, does not provide any benefit to taxpayers. In effect, the City purchase of licenses is a purchase of no real dollar value, since the purchase does not offer any return or benefit that the City does not already have.
Other legal issues arising from this plan relate to the authority for City Council to determine unilaterally, the amount of compensation to existing licensees and to charge lease fees to service annual debt charges on the bonds. The authority of City Council to charge fees in the context of licensing and regulating businesses is limited to charging license fees. Under section 257.2(3) of the Municipal Act, in setting the amount of the fees to be charged for a license, City Council is required "to take into account the costs of administering and enforcing" the licensing By-law. The plate lease arrangement to service debt charges for the ultimate purpose of obtaining sufficient funds to compensate existing owners for the loss of their licenses does not constitute "taking into account the costs of administering and enforcing" the licensing By-law. Accordingly, Legal Services advise that City Council lacks the authority to lease plates to drivers.
Legal Services conclude that the combined lack of authority to provide the proposed compensation, along with the lack of authority to require taxicab drivers to fund the proposed compensation, makes the proposal, if implemented, highly vulnerable to successful legal challenge.
While the methods in the Fotinos plan cannot be implemented without changes to the Municipal Act, the underlying principle to transfer the industry into the hands of participants in a fair and equitable manner, forms the basis for the proposed solution.
The Moscoe Proposal
The Moscoe proposal involves the City Council as the liaison between the existing owners and drivers, a role similar to that of the current industry Designated Agents. The City would lease taxicabs from existing owners for a set fee and would, in turn, lease those taxicabs to eligible drivers. The lease fees paid by such drivers would be used to fund the payments by City Council to the owners and to fund the establishment of a pension plan for drivers.
Response to the Moscoe Proposal
City Legal Services advise that City Council lacks the authority to enter into the taxicab business in this manner as the authority delegated to City Council by the Municipal Act to license, regulate and govern businesses does not include the authority to conduct the business of these regulated businesses. Legal Services also advise that City Council lacks the authority to charge taxicab lease fees. The authority of City Council to charge fees in the context of licensing and regulating businesses is limited to charging license fees. Under subsection 257.2(3) of the Municipal Act, in setting the amount of the fees to be charged for a license, City Council is required "to take into account the costs of administering and enforcing" the licensing By-law. It is the opinion of the City's Legal Services that charging a lease fee for the purpose of compensating existing owners is not relevant to administering and enforcing the By-law, and therefore, that City Council lacks the authority to charge the fees proposed in the plan.
With respect to the proposed Taxi Industry Benefits Reserve Fund, City Legal Services also advise that City Council lacks the authority to establish a benefits fund for participants in private industry.
The principle to the Moscoe proposal is similar to the Fotinos plan in that it transfers the taxicab industry to an owner-driver design. This change is achieved in the Moscoe plan by compensating existing owners through leasing mechanisms rather than purchasing methods proposed in the Fotinos plan. The Moscoe plan similarly attempts to improve working conditions for drivers in a fair manner to current owners.
Plan 2001 is a reform package submitted by the Toronto Taxi Drivers Association that sets out conditions for a transformed taxicab industry to be implemented by the year 2001. The plan refers to the importance of the 2008 Olympic Games and that a vibrant taxi industry will serve to benefit tourism and conventions.
Plan 2001 proposes to introduce a taxi driver's Bill of Rights that provides for:
1. "A clean, well-maintained, modern vehicle that is capable of safe and economic operation and providing optimum comfort to the passenger.
2. Healthy and reasonably safe working conditions for the benefit of both driver and the customer.
3. An economic return on investment that will permit the earning of the minimum statutory hourly wage in addition to all operating expenses including fringe benefits.
4. Fringe benefits to provide domestic security and enhance driver morale:
6. A straightforward set of rules and regulations for the industry that are easily understood and that are enforced consistently and fairly and evenhandedly so that a driver always can know where he stands and the public has prompt redress of complaints.
7. A voice by way of elected representation in the regulation and management of the industry."
Plan 2001 generally proposes an industry of owner-drivers with non-transferable and non-leasable licenses, although they suggest that five alternate drivers be allowed for each taxicab. The plan also includes retraining and testing of all existing drivers and the introduction of a dress code. In addition, the plan calls for minimum work hours and the establishment of a contributory pension plan.
With respect to vehicle quality, Plan 2001 supports rigid regulations for model, size, age, and mileage, maintenance and repair standards, and a program of annual inspections. The plan also suggests that taxicabs be painted a standard, recognizable colour for public identification. In addition, the plan includes for a log book, available at any time for inspection by Toronto Licensing, that documents "driver, shifts, maintenance, repairs, annual inspections, complaints and driver's record.
On the topic of enforcement, Plan 2001 includes for elected representation from taxi drivers at Toronto Licensing, a Taxi Complaint Bureau and hotline, clear guidelines and rules, and a hearing mechanism to dispose of all complaints publicly and promptly.
The plan includes specific recommendations to manage transition that include assignment of licenses for two years, and issuance of up to 50 new licenses per month to a minimum of 500 annually for the first three years. It also proposes to cancel existing licenses after two years without compensation and to grant new licenses to previous owners who qualify. Respecting cases of hardship, the proposal provides for a Commission hearing to assess and award payment from a Taxi Owners Compensation Fund.
Response to Plan 2001
A number of these suggestions are addressed by the proposed solution, however, certain matters such as economic return, fringe benefits, and the establishment of a Taxi Drivers Bill of Rights, are business-related that deny intervention by the City. As such, the proposed solution includes a forum for the industry to discuss and adopt business initiatives. In addition, there are a few concepts that are not provided for as they present enforcement difficulties or legal issues. Such items include owner-operated taxicabs that provide for five additional drivers, cancellation of existing licenses, and compensation only for hardship cases.
Owner-operated taxicabs have proven to be the best quality taxicabs, and as such, reform should transform the industry to a greater proportion of owner-operators. However, qualities of an owner-operated taxicab such as pride of ownership, are greatly diminished if accessory drivers are allowed. This scenario provides for many layers of participants and the practice of leasing to occur within the shadows of the By-law. In effect, enforcement would be next to impossible to ensure that the license owner is the driver of the taxicab.
Although the City can revoke licenses under the By-law, it cannot unilaterally cancel licenses. Plan 2001 does not define the qualifications that would be required to obtain a new license. Presumably it requires the owner to drive the taxicab. The reallocation of licenses ignores the current structure and the fact that, not all owners are non-participants. This action would devalue existing licenses to zero and obliterate a number of taxicab businesses. This is not acceptable to the Task Force as it is not fair to existing owners. The proposed solution supports a turned focus to owner-drivers, and also recognizes the existence and value of existing owners. The concern for hardship cases is noble, however, there is no qualifications to define hardship cases. Under section 111 of the Municipal Act, it is beyond the authority of the City to provide compensation to current taxicab license owners subjected to hardship by the changes in the proposed manner.
The Toronto Taxi Alliance Proposal
The Toronto Taxi Alliance (TTA) represents owners, Designated Agents, fleet operators, independents and brokerages and they note strong support for the principles of the Task Force.
The TTA propose an industry structure that provides for collateral value on plates, reasonable earnings for drivers and the ability to eventually own a taxicab license, and the consistent and fair administration of regulations. They stress the importance of agents and fleet operators to provide dispatch and taxicab services every day, 24 hours a day.
Included in the TTA submission are recommendations for lower ages for taxicabs to ultimately phase in to vehicles entering the taxicab industry at not more than four model years old and retiring by eight model years old. The proposal also provides for the transfer of taxicabs within the age provisions, resulting from ownership or lease changes.
The TTA also supports clear and fair cancellation of leases and where there is no mutual consent, a term of notice of 60 days would apply. The plan also supports conditions of plate ownership that create an asset for the owner such that it can be used as collateral. Further, the TTA recommends that the plate owner, agent or lessee be allowed to purchase the vehicle. They acknowledge that this practice regularly occurs although it is not provided for in the By-law. The proposal suggests that this aspect of the By-law is not enforced and that often, a lessee purchases a vehicle and registers it in the owners name to meet the obligations of the By-law. Further, the TTA plan also supports licensing of Designated Agents to provide an operating framework.
The TTA concurs with the industry overall in the enforcement of unlicensed livery cabs and taxis. Specifically in this regard, the TTA supports a separate division for enforcement of taxicabs and limousines, redrafting the By-law to make the offense enforceable (without needing to witness the exchange of money), abolish show-cause hearings related to inspections to fund additional enforcement staff, work with the province to change the law regarding out-of-town pick-ups, improve the identification of Toronto licensed livery cabs, establish an information hot-line, engage police assistance and increase penalties for repeat offenders.
The TTA also proposes to reform the system of mechanical inspections by adopting standards under the Provincial Safety Certifications and eliminating show-cause hearings resulting from mechanical failures.
Their plan also encourages industry professionalism and indicates that the current training program is not enough. With respect to training, the TTA proposes continuous upgrading for drivers.
The TTA further suggests that while the "compliments/complaints" number is posted in every taxicab, it is not well publicized and should be more visible to the public.
Respecting plate issuance, the TTA proposes to re-evaluate the formula used to calculate plate issuance that recognizes recent changes in technology and the impact of courier services. The submission draws a relationship between deteriorating driver income and too many taxicabs in Toronto.
Response to the TTA Proposal
Many of the concepts proposed by the TTA are reflected in the recommended solution. A number of suggestions not recommended include: the creation of plates as collateral, terms for vehicle purchase, separate enforcement division for taxicabs, and the abolishment of show-cause hearings related to inspections.
While licenses are deemed to be assets for the purposes of family law, they cannot be used for collateral purposes. In legal terms, the City is the true owner of licenses as it holds authority to revoke or suspend licenses. As such, plates cannot be declared as assets for collateral purposes. The proposal to allow owners, agents, or lessees to purchase vehicles as taxicabs would validate current practices that take place in contravention of the By-law. The intention of the current By-law is to ensure that owners are responsible for their taxicabs and that principle is supported in the recommendations. The preferred approach to address the issue is to increase enforcement measures to ensure that owners participate as intended in the By-law.
Toronto Licensing advise that a separate enforcement division is difficult to manage as enforcement officers address all licensing matters on a geographical basis. This system offers flexibility for Licensing to respond to changing licensing enforcement priorities.
Show-cause hearings occur when vehicles are declared dangerous and unsafe during inspection. Parties associated with the taxicab are called before the Commission who pass judgement who may revoke or suspend licenses or record the offense on file. A number of stakeholders suggest that in many instances, show-cause hearings for such inspections should be eliminated, with the exception of repeat offenders. It is their position that such hearings place a heavy burden on administration and stakeholders who attend.
Toronto Licensing indicates that show-cause hearings are necessary as a message to the industry that dangerous and unsafe vehicles are not acceptable, recognizing public safety concerns. They further suggest that allowing dangerous and unsafe vehicles to be repaired without penalty, will increase the percentage of dangerous and unsafe taxicabs.
The Task Force feels that the most effective way to reduce show-cause hearings is to improve the taxicab industry and eliminate dangerous and unsafe vehicles. Improved quality taxicabs are less likely to fail mechanical inspections as explained in Section 2 of this report.
The Fareport Strategy
Fareport developed a business strategy to inject into the Toronto taxicab industry accomplish the goals of the Task Force. The Fareport plan introduces:
Response to the Fareport Strategy
The principles in the Fareport strategy are all supported in the proposed recommendations.
Co-op Taxi Associates Committee
The Co-op Taxi Associates Committee support the collective agreement as the means to achieve fairness and equity and to address treatment of drivers, lease rates, shift rates, lease arrangements, and labour relations matters. Their submission included a number of recommendations that provided for:
Response to the Co-op Taxi Associates Committee Plan
The general principles of these recommendations are supported in the proposed reforms with the exceptions of the elimination of show-cause hearings and amending the By-law to provide for the taxicab as an asset for collateral purposes. The issues related to these proposals and the rationale for not including them in the final recommendations are discussed above.
PART IV: BEST PRACTICES
4.1 London, England
Long regarded as one of the leading taxi industries in the world, the city of London has managed to maintain a successful deregulated taxi market. The London taxi system is one of the largest in the world, with approximately 17,000 licensed black cabs and 22,000 licensed drivers serving the London region. Despite the large numbers, the structure of the London system has remained committed to the owner-driver model of taxi service.
All interested parties can obtain a license to operate a taxicab business from the Public Carriage Office of the Metropolitan Police, provided s/he meets the conditions for ownership. The conditions for individual and corporate ownership are such that the owner-driver model of taxi service is an incidental outgrowth of the legal provisions. That is, an individual may be granted a taxi license if s/he owns a taxicab, possesses a taxi driver's license and has adequate funds (i.e. 600 pounds) to maintain a taxicab in the necessary condition. A corporation can only obtain a taxi license if they name a person within the corporation to be the proprietor on behalf of the company. The proprietor must meet the aforementioned conditions for ownership.
In effect, the London model's strict limit on the chain of participants in each establishment, as well as high standards for driver training, have helped define the industry's strong views on the pride of ownership and customer service. An individual or corporate owner of a taxi license may lease out their taxicab, but not their taxi license. Thus, the only persons eligible to become a lessee are those who wish to drive a leased taxicab. Accordingly, the proprietor must own the vehicle and ensure that the taxicab remains in proper condition. It is also the proprietor's responsibility to keep the lessee's driver's license on record. The period for which a taxicab is leased to a licensed driver, as well as the fees payable and cancellation rules, are left open to individual contract negotiations. The Public Carriage Office does not allow for the subleasing of taxicabs.
The extensive training that is required to become a licensed driver has effectively removed the incentive to become a lessee, as opposed to a proprietor of one's own taxi business. To qualify for either the all-London (Green Badge) or suburban (Yellow Badge) license, the applicant must satisfy the Commissioner of Police for the Metropolis that s/he is a fit and proper person, is in good health and has sufficient geographical knowledge of either their selected area or all of London. Entitled 'The Knowledge', the rigorous self-study training program for London taxi drivers is famous for its demanding content and length. Candidates must complete six stages and a final driving test. The regulatory body does not instruct candidates, but rather administers a series of tests and sets the passing grade. The initiative rests with the candidate to gain thorough knowledge of the points of interest in London and the many different 'runs' (routes between two points) that lead to a particular destination. It follows that the emphasis in the training is on the practical skill upon which the occupation rests: travelling between two points by the most direct route possible. Once the course is completed, a licensed driver has learned a total of four hundred 'runs' and has devoted an average of three years to the pursuit of a license.
Interestingly enough, although London drivers are praised for their professionalism, 'The Knowledge' contains no component for customer service and tourism training. Rather, the lengthy training process, and general owner-driver requirements, dictates that only those persons who wish to commit themselves to a professional career need apply.
The owner-driver model of taxi service is further supported by strict limits on the transferability of a proprietor's license. Taxi licenses may only be transferred to the next of kin, with the vehicle, upon death. The next of kin must then assume the responsibility and qualifications of an owner. Licenses cannot be sold and remain the property of the Public Carriage Office. A taxi license is regarded as the right to simply operate a taxi business, as granted by the regulatory body. Accordingly, the right to operate a taxi business ceases when the owner of a plate no longer wishes to operate the business. Unlike other jurisdictions, taxi licenses are not used for investment or pension purposes.
4.1.2 Regulation and Enforcement
The quality of taxicabs is controlled through annual inspections conducted by the Public Carriage Office using standards set by the Department of Transport. Taxicabs are also subjected to interim spot checks up to four times a year. The annual 'conditions of fitness' inspection includes a check of brakes, steering, wheels, underparts, the engine compartment, lighting, the driver's compartment, the body, the carriage compartment, and a road and meter test. On average, fewer than eight per cent of taxicabs are found to be unfit for service (i.e. defective brakes, tires, suspension are the most common) following an inspections. Research conducted by the Task Force revealed the 'conditions of fitness' test to be of a high standard. As such, participants in the industry face standards that mandate long-term and dedicated involvement in the industry.
The Public Carriage Office requires the annual test to be conducted simultaneously to the annual license renewal period. If the taxicab passes its inspection, the owner pays the license fee and a plate with a different number is issued. Conversely, a new license is not issued until the taxicab passes the inspection.
4.1.3 Unlicensed Competition
Although the black cab dominates discussions of the London taxi industry, it is indeed true that the famous black cab shares the taxi market with approximately 40,000 unlicensed minicabs. In fact, there is twice the number of minicabs relative to licensed London taxis. Minicabs are generally cheaper than black cabs, especially at night and on weekends. However, the drivers are unlicensed, untrained, frequently uninsured, and not always reliable. The cars do not have to meet any vehicle specifications and are not subjected to regular inspections. Minicabs cannot be hailed in the street.
While it is alleged that minicabs steal business from the licensed taxi trade, it has alternatively been argued that minicabs are servicing sectors in the public transportation market for which the black cab drivers have little interest. In effect, London has two de facto classes of taxicabs. Unlicensed minicabs are known to serve mostly native Londoners travelling to suburban destinations and those travelling long distances. Minicabs often work during unsocial hours and in inconvenient locations. On the other hand, the black cab mostly serves the downtown core, tourists, and businesspersons. Although the unlicensed minicab has been in existence for a number of years, the city of London is considering legislation for minicabs over the next two years.
4.1.4 Customer Service
The London taxi industry is often commended for its example of outstanding service to the customer. London taxi drivers do not have a strict dress code, however, smart dress is encouraged and followed. London cabbies tend to subscribe to the unwritten dress code of slacks and a dress shirt for professional appearance. Aside from aesthetic concerns, the Public Carriage Office has also taken steps to ensure that drivers have free access to disability training material. For instance, literature on disability etiquette and the Disability Discrimination Act is readily available to all drivers. Furthermore, by January 1, 2000, all taxicabs must be equipped to approved standards in order that wheelchair passengers may be carried. With regard to technological enhancements, the London industry has advanced into the areas of computer-aided dispatch systems, card reader terminals that allow payment by standard credit cards, and automatic vehicle location by satellite.
4.1.5 Driver Safety, Work Standards, and Benefits
The ethos that dominates the London industry is the notion of the self-employed entrepreneur. Both the regulatory body and participants recognize that the success of each business rests in the initiative of each proprietor. The Public Carriage Office admits to keeping little data on the income received by the average cabby because the number can and does vary according to how well the cabby runs his or her business. However, some estimates consulted state that London taxi drivers work on average twelve to fourteen hours per day and earn the reasonable wage of approximately six hundred to eight hundred pounds per week. Each individual proprietor must arrange for his or her own insurance and pension provisions. Most London cabbies are able to maintain a profitable business upon which a family can be supported and time for leisure pursuits is available.
Driver safety is not an issue of great concern for the licensed taxicab industry. The London industry does benefit from measures that can preempt situations that may challenge a driver's personal security. The passenger compartment is separated from the driver by a glass security screen. Conversation can still be maintained by way of an intercom system. The provision of the glass screen is more in the interest of passenger privacy than driver safety. The Public Carriage Office has also taken moderate steps to produce a safe and profitable work environment for drivers. For instance, under the London Cab Act, 1896 it is an offence to defraud a cabman. A conviction could result in a passenger being made to pay the fare, in addition to paying a fine or face imprisonment.
4.1.6 Vehicle Characteristics
Although the "black cab" is the signature of the licensed London taxi market, there are no vehicle specifications regarding colour. Vehicle specifications with regard to vehicle make and dimensions, however, are one of the most stringent in the world. Only purpose built vehicles are permitted. At present, there are four principal vehicles - the London Taxis International FX4/Fairway, and TX1, the Metrocab, and the Asquith. All approved vehicles must meet certain specifications as laid out in the Metropolitan Conditions of Fitness. Vehicles must be type approved to the requirements of the M or M1 (i.e. passenger carrying) category of European Whole Type Approval.
The Public Carriage Office does not place any restrictions on the age of vehicles upon entry to and retirement from service.
4.2 New York City, New York
The New York City ("New York") taxi industry is a closed system with a cap of 12,187 medallions. Although the city progressed through a massive taxi reform process in the spring of 1998, the city's Taxi and Limousine Commission ("TLC") did not conclude that a deregulated market was a necessary reform that would improve the perceived ills of the industry. Hence, the fundamental structure of the industry relating to license distribution and management remains unchanged.
The New York taxi industry is a curious mix of independent owner-drivers and fleet/minifleet owners, both of which are fully recognized in the city's ordinance. An independent owner-driver is an individual, partnership or corporation owning only one medallion. Alternatively, a minifleet owner is a corporation authorized to own two or more medallions. A fleet is authorized to own 25 or more taxicabs in operation from a central dispatch service. In order to be granted an independent owner's license, the applicant must possess a current taxi driver's license and must represent that s/he will drive the taxicab for at least two hundred and ten nine-hour shifts every year. Both individual and corporate owners are required to show that they are qualified to assume the duties and obligations of an owner of a taxicab license. Moreover, all medallion holders are required to provide proof that they are the owner of the vehicle that meets the vehicle specifications and insurance requirements of the TLC.
Unlike London, the New York taxi industry does not ascribe to the owner-driver model of taxi service, as there can be a number of layers between the owner of the medallion and the frontline service provider. The use of Designated Agents and leasing arrangements are accepted practices in New York, provided the participants adhere to strict guidelines provided in the ordinance. Designated Agents are permitted to act on the medallion holder's behalf and the TLC keeps meticulous records of participating agents. An owner may only have one designated agent for his or her taxicab(s). While the owner remains responsible for all obligations under the ordinance, i.e. insuring their vehicle and guaranteeing that the vehicle is in proper working order, the designated agent can perform all functions incidental to operating the taxicab. The primary restriction facing the designated agent is that s/he cannot delegate his or her authority to another party.
An owner may lease his or her taxicab to a licensed driver. The lessee, however, is not permitted to sublease the taxicab to another party. The TLC respects that the period of the lease and the cancellation rules remain subject to individual contract negotiations. Nevertheless, the terms of the lease must be filed with TLC. In light of the relatively liberal leasing provision, more than three-quarters of New York taxis are leased. Moreover, twenty per cent of owner-driven taxicabs are leased to a second driver. These numbers are not surprising considering the fact that owners can draw from an abundant pool of drivers. Currently, there are approximately 40,000 licensed taxi drivers in New York City.
The notion that leasing arrangements are left wide open to the freedom of contract is constrained by the fact that the ordinance permits the TLC to assume a role in preventing lease rates from drifting into the realm of exorbitance. The regulatory authority mandates that as of March 1, 1996 an owner may not charge a lease rate that is more than fourteen per cent of the highest lease rate charged, for an equivalent lease, on or prior to September 30, 1995. If the medallion was not being leased to a driver on or prior to September 30, 1995, the lease rate may not be higher than 14 per cent a maximum $90 per shift lease.
In order to ensure that owners comply with the aforementioned leasing provisions, the TLC has the authority to fine, suspend, or revoke the owner's license for a violation. The TLC may also administer other penalties. Such penalties include an incremental increase in the fines until the third violation, at which point the medallion is suspended up to thirty days. If the violation is an exorbitant lease rate, the owner may also be made to pay restitution to the driver, equal to the excess that has been charged.
Drivers in New York are required to obtain a license from the TLC and the conditions for entry are not onerous. In essence, successful completion of a forty-hour training program provides the driver with a license. The TLC does not assume a direct role in training drivers, but rather requires the applicant to produce a certificate from a TLC-approved program. Independent training facilities must provide a program that covers the basic areas of city geography, TLC rules, driver/passenger relations, and defensive driving. The training program can be waived by passing an advanced placement examination.
Similar to other jurisdictions, the rules regarding the transferability of the owner's license can have a far reaching impact on the industry. As is often the case, transfer rights can affect the value of the plate as well, as the ownership concentration in the industry. New York permits the transfer of a medallion via private sale. The conditions placed on such transfers are minimal and include the following: (a) a medallion belonging to a minifleet or fleet owner may only be transferred to a minifleet or fleet owner, (b) a license of an independent taxicab owner can only be transferred to another independent owner, (c) transfers are only complete with the written approval of the TLC. Prior to a sale being approved, the purchaser is obligated to demonstrate that s/he meets all the conditions of ownership.
Although the medallion is legally the property of the TLC, most medallion holders treat the license to operate a taxi business as an asset. Speculation is a regular practice in the New York industry and a private purchase remains elusive to the average consumer. Medallions have recently changed hands for as much as $200,00 apiece. Purchasers do have the option of financing the purchase of a plate if they desire to become involved in the industry. New York is one of the few jurisdictions where private corporations are active in financing the purchase of medallions. Consequently, it has become a profitable and expanding facet of the taxi industry.
4.2.2 Regulation and Enforcement
The TLC is an active regulatory body that has taken a hardline approach to curing the problems that ail taxi service in the city. Upon conducting its own internal research over the winter months of 1998, the TLC found the main problems facing the industry to be driver accidents and customer safety. Accordingly, the regulatory body - with the enthusiastic backing of Mayor Rudolph Giuliani - set out to address the recognized weaknesses in customer service and driver quality. The highlights of the reform package introduced in May 1998, and passed in June of that same year, are as follows:
To ensure that the mechanical fitness of taxis remains at an acceptable standard, taxi owners are required to present their taxicabs for inspection three times a year. In addition, taxicabs may be subjected to a spot check at any time.
To add support to the effectiveness of scheduled inspections keeping taxicabs in passenger-safe conditions, the TLC has been successful in using a combination of stiff fines, and an independent adjudication process, as quality-control measures for taxicabs on the road. The adjudication process is purposefully divided between consumer complaints and enforcement complaints. The consumer complaints division hears those complaints that arise from poor service. The hearings are quick and are heard before an administrative law judge. Due to increased awareness of the justice that can be reached by filing a complaint, the consumer adjudication department hears roughly ten thousand complaints each year.
Enforcement of vehicle and license requirements is heard by the enforcement adjudication division exclusively. A summons to appear before an administrative law judge can arise from infractions discovered at one of the three scheduled inspections each year, as well as from the random spot checks. New York maintains an impressive inspection apparatus that ensures that the provisions of the ordinance are adhered to and those in violation appear before the appropriate authority. Those bodies that hold the authority to stop and inspect a taxicab include: uniform and plain clothes TLC inspectors, the New York City Police Department's Taxi Squad, and the Port Authority of New York and New Jersey. On average, the enforcement adjudication division hears two to three thousand cases per week. The TLC has ensured that a supply of nine judges works the circuit each week to maintain the swift processing of cases.
4.2.3 Customer Service
New York City has long been described as a taxi riding city due to the lack of convenient public transportation alternatives. Not surprisingly, an emphasis on improved customer service has been a focal point of changes instituted by the TLC over the past three years. Many of the changes have centered on the promotion of the avenues available for consumer complaints. Taxicabs are now mandated to carry big, bold advertising of 212-NYC-TAXI to notify customers that a complaints hotline is available. The audiorecording on the complaints hotline has been improved to give consumers easier directions on how to proceed with a complaint. Greater accessibility to the complaints process was also fostered by the advertisement of the hotline number in braille and in public locales, as well as the introduction of an on-line complaint hearing guide and complaint form. In effect, the greater awareness of a complaints process provided reinforcement to the New York City Taxi Rider's Bill of Rights. The Bill of Rights is widely advertised and includes such guarantees as the right to have an air-conditioned cab, a courteous driver, and smoke and incense-free air.
The renewed customer-centered focus in the taxi industry has been furthered by numerous customer service enhancements. For instance, as riders enter and exit a cab, they are treated to an audiorecording of celebrity voices that reminds them to buckle up, not to forget their belongings, and offers the helpful reminder of the hotline number. All customers receive a receipt, dispensed from a meter. The receipt allows greater economic efficiency for riders, as well as providing riders with the complaints hotline number and the medallion number, time of day of the ride, and the duration of the trip; all of which aid the investigation of a complaint. In addition, customers benefit from easy identification of taxis, as all New York taxis are yellow. -
4.2.4 Driver Safety, Work Standards, and Benefits
Recognizing the dangers and vulnerabilities faced by drivers due to the nature of the work, taxis in New York are equipped with a transparent partition and a protective plate that isolate the driver from the rear seat passengers. Owners are also required to equip all taxicabs with a help or distress signaling light system in accordance with the taxicab specifications in the ordinance.
Drivers in New York do not receive benefits from the regulatory body outside of those that are arranged with the owners or brokerages from which they lease a taxicab. Both the regulatory body and the owners generally ascribe to the view that each individual must take responsibility for the financial health of his or her taxi business such that the necessities of life and a pension can be provided for.
With the introduction of the TLC's seventeen-point reform plan, New York taxi drivers face stiffer regulations in the interest of improving the quality of the industry. The TLC's rationale behind the plan was the steady purging of those persons who are not dedicated to customer service and safety, as witnessed in their careless behaviour. Ultimately, the effect is to improve work standards by increasing the safety of drivers and passengers, and increasing public confidence in the trade over the long-haul. Drivers and their unions, however, have voiced opposition to the reforms by arguing that the penalties are draconian. Nevertheless, the city's politicians and the public have thrown their support behind the initiative.
4.2.5 Vehicle Characteristics
The quality of New York's taxis stand out due to the limited life span that is tolerated for vehicles. All cars that enter the industry must be off the showroom floor. Cars that are part of fleets must be replaced after three years of cabbing, while cars that are driven by independent owner-operators must be retired after five years. Extensions are only granted to those taxis that are powered by natural gas, and only then is the extension granted for two years. The strict provisions on the life of the vehicle recognizes the wear-and-tear that is inherent to using a vehicle for the purpose of transporting persons and parcels up to twenty-four hours a day.
4.3 Halifax, Nova Scotia
The taxi industry in Halifax is currently structured around a closed system of six hundred plates. There are no plans to lift the cap. Ordinance 116 expressly states that the License and Firearms Department of the Halifax Regional Police is not permitted to issue more plates until the number falls below 550. At present, the city is attempting to reach this figure outside the controversial buying back of plates. Instead, Halifax has been successful in reducing the number through such voluntary means as the plateholder relinquishing control of the plates or the death of the plateholder precipitating the plate's return to the city.
While Halifax is similar to many other jurisdictions in regard to the closed nature of its market, Halifax has stood out as being committed to innovative change in the area of driver training. As the focus on improved customer service propels reform in other regions, Halifax has sought to achieve the delivery of top rate service to the taxi riding public through the introduction of a two-tiered taxi system. In essence, those taxicabs that are equipped with higher caliber drivers and vehicles, via the Hotel Standards program, are permitted to service the lucrative taxi stands located at the hotels. Those taxicabs that do not carry the distinction are excluded. Of the six hundred licensed taxis serving the Halifax region, two hundred and fifty are Hotel Standards certified.
The difference between a Hotel Standard taxicab and a regular taxicab primarily rests in the quality and age of the approved vehicle, and the training and dress code required of the drivers. While Ordinance 116 does not state that Hotel Standards taxis must be of the luxury car variety, it does demand that vehicle have more head and leg room, and trunk volume, than the regular class of taxicab. Furthermore, aesthetically, the Hotel Standards taxi must have first class repairs, with no visible body fillers, primer paint, accidental damage or similar defects. A Hotel Standards taxicab must also be no more than eight years old, unless the Inspector determines that the vehicle is of exceptional quality. Conversely, those existing industry participants not taking part in the Hotel Standards program are required to provide a vehicle of standard specification, i.e. four-door sedan, at least four cylinders. Provided that the vehicle meets the required specifications, there are no age of entry or retirement conditions attached to regular Halifax taxicabs.
With regard to driver requirements, Hotel Standards drivers must keep a neat and clean appearance which includes wearing a shirt with a collar and sleeves. Drivers who ply their trade in the regular tier are required to wear a shirt, trousers or dress shorts, socks, and shoes.
More importantly, the drivers who wish to service hotels must complete the Hotel Standards driver training regime. As such, the city of Halifax has made a point of establishing the heart of the Hotel Standards distinction to be a revamped driver training program. That is, driver training is not looked upon as simply a means to test a candidate's driving skill. Rather, candidates must demonstrate competence in the areas of tourism knowledge and a professional attitude to all facets of the trade. Drivers are expected to bring themselves to a higher standard of professionalism through the three-step Hotel Standards certification process. The three step certification process includes: (1) a written test, (2) a performance review consisting of a checklist for the candidate to test what they have learned, and (3) an in-car industry evaluation. It takes up to one year to be issued a Hotel Standards license.
The series of examinations administered by the Tourism Industry Association of Nova Scotia ("TIANS") are based on the National Occupational Standards: Taxi Driver Training manual designed by the Canadian Tourism Human Resource Council. Loosely modeled after 'The Knowledge' in London, candidates obtain the learning material from TIANS for a fee, and through a self-study program, they learn the material and schedule a test with a TIANS evaluator. The active participation of an independent tourism organization in Halifax is an indication of a growing trend to recognize the importance of the taxi industry to the tourism profession, and the valuable role trained tourism professionals can bring to the education of drivers in their evolving role.
The content covered in the Hotel Standards training manual can be classified as "soft skills" (i.e. customer service, language skills, gender sensitivity). Despite the classification, such skills are now recognized as areas where taxi service needs additional attention if it wishes to capitalize on opportunities in the market. Courses covered include: professionalism, customer service, communication, safety, (tourism) industry knowledge, shift procedures, and monetary transactions. Taxi drivers are guided through the standards that are expected of them, in addition to the methods available to internalize the standards. Ultimately, candidates are expected to play an active role in their education and commitment to developing the professional skills needed to offer the public outstanding service.
It is important to note that upon the commencement of the Hotel Standards program in 1995, all new drivers in Halifax are required to become Hotel Standards certified. Those persons wishing to obtain a driver's license must first receive a temporary license from the License and Firearms Division. A temporary license is issued to candidates who complete the original driver training course consisting of: a language test, a test pertaining to streets and buildings, and a test on Ordinance 116. It takes approximately four days to be issued a temporary license. It follows that the driver has one year from the date of issuance of a temporary license to complete the Hotel Standards certification and receive permanent credentials.
Those persons who were taxicab drivers prior to the commencement of the Hotel Standards program are not required to upgrade their training. However, they are excluded from servicing the hotels. Halifax City Council is considering amending the ordinance to make the Hotel Standards a uniform requirement for all cars and drivers in the taxi industry. As such, the two-tiers may be merged together.
Irrespective of participation, or lack thereof, in the Hotel Standards program, the ordinance provisions regarding ownership of the vehicle, leasing, and rights of transferability apply to both tiers. Ownership of the vehicle remains with the proprietor. A taxi license can only be issued if the owner provides a vehicle of particular specifications and the vehicle is insured as specified in the ordinance. Furthermore, the taxi license and the vehicle cannot be divorced from one another. As such, an owner is permitted to lease their plate and vehicle provided that the owner of the vehicle is a licensed owner and the driver is licensed for the tier in which they intend to work. There is no difference in the fares charged in either tier.
The Halifax system maintains that the taxi license is not an asset, but rather a license granted by the city to operate a business. Conceptually and in practice, the plate remains the property of the License and Firearm Department. To that end, even if the number of licenses in operation falls below 550, plateholders are not permitted to sell their plate on the open market. The ordinance dictates that a waiting list for available licenses should be comprised of persons holding taxi driver's licenses. In the interest of fairness, the names are listed in the order of seniority according to the time the interested party has continuously held a driver's licenses.
4.3.2 Regulation and Enforcement
The owner of a taxicab business is required to present his or her vehicle for inspection once a year. The inspections are conducted by taxi inspectors from the License and Firearms Department who use both vehicle manufacturer standards and department standards as their guides. If a vehicle fails to meet the aforementioned standards, the inspector will suspend the license until the vehicle complies with the By-law and is approved for operation by the Chief of Police or his designate.
As in other jurisdictions, Halifax taxicabs can be subjected to a spot check at any time by a License and Firearms inspector. However, due to limited resources, inspectors are only available to patrol the streets between 8:30 am to 4:30 pm Monday to Friday. As well, the assigned inspectors do not inspect taxis businesses exclusively, as their time is divided between various enterprises. In the interest of improving their enforcement apparatus, the city is examining the possibility of allocating a specific number of inspectors for taxi spot checks exclusively.
4.3.3 Customer Service
The hallmark of the two-tiered system has been the intense efforts to consciously raise the quality of customer service. The License and Firearms Department has taken three steps to improve service deliver to the taxi riding public. First, in the interest of making the Hotel Standards tier readily identifiable to the public, all certified taxis carry a decal in the shape of the international symbol of a pineapple.
Secondly, the city has attempted to maintain a worldclass taxi service by developing a special Hotel Taxi Standards Committee appointed to investigate customer complaints made against Hotel Standards drivers. The Committee ensures representation from a broad range of interests, i.e. representatives are drawn from Tourism Halifax, TIANS, the Hotel Association of Halifax, licensed taxi drivers, licensed taxi owners, and owners or managers of a brokerage. The Committee must deliver justice expediently, as the Committee must investigate the complaint within five days of the receipt of the complaint. If found guilty, the driver may have his certification removed for a period of time as deemed appropriate.
Thirdly, the industry's commitment to maintaining quality service has also enhanced by the availability of re-training courses for licensed Hotel Standards taxi drivers. The aim of the courses has been to ensure that improvements to customer service and driver's tourism knowledge are maintained. The Hotel Standards Committee is responsible for approving the content of the course. The course is offered by the License and Firearms Department at least once every six months.
4.3.4 Driver Safety, Work Standards, and Benefits
The success of the Hotel Standards program can be partly credited to the recognition given to those drivers who have taken the initiative in acquiring the necessary certification. Advertisements in the newspaper and tourism industry newsletters announcing recent recipients of the Hotel Standards certification has increased industry interest in and acceptance of the program. Industry veterans and newcomers enjoy greater feelings of accomplishment and professionalism for their efforts to offer higher quality service to the taxi riding public; the public upon which their livelihood depends.
4.4 Vancouver, British Columbia
As in New York City and Halifax, Vancouver's taxi industry functions in an artificial market, capped at 418 licenses. The formula employed in determining whether the number of licenses should be increased is clearly stated in By-law No.6066. The By-law mandates that the number of taxis should be related to the size of the population served. As a result, the number of taxis is only permitted to increase at the rate of ten additional licenses per year until the ratio of 1.2 taxicabs for each 1,000 of population of the City of Vancouver is reached. Due to the strict provisions of the formula, there are no current plans to increase the number of licenses.
In order to obtain a license to operate a taxicab, an applicant must demonstrate to the municipal Permits and Licenses Department that s/he possesses an intimate knowledge of the City and its traffic regulation; knowledge of the applicable By-law; and an willingness and ability to provide satisfactory service to the public during the life of the license. Furthermore, an owner must be able to speak, and read and write the English language. An applicant must also provide proof that s/he is the owner of a vehicle that is meets the specifications of both the By-law and the Motor Vehicle Act.
Leasing is permitted under the By-law, however, the participants in the chain is limited. Under the By-law, a vehicle may not be operated as a taxicab except by the registered owner or a driver employed by and directly responsible to the owner. Consequently, only those persons who intend to drive the taxicab are permitted to become a link in the chain. In the interest of enhancing the regulator's ability to enforce the By-law, the owner is mandated to obtain a copy of the lessee's driver's license, and s/he must consequently record this information with the Permits and Licenses Department. Accordingly, the regulatory body is equipped with the information needed to locate drivers if and when the need arises (as it may in regard to enforcement matters).
Interestingly enough, an individual may not apply for a driver's license until his or her application is accompanied by a letter from the owner of a taxicab indicating an intent to hire the applicant once the license has been granted. This provision operates to restrain the number of persons holding a driver's license. But more importantly, it is a mechanism to keep the number of drivers somewhat comparable to the number of taxicab businesses in operation.
Plates may be transferred on the open market in Vancouver, provided that the transferee meets the owner's requirements in the By-law. To facilitate stability in ownership, the By-law prohibits a transfer of the same license more than once during any calendar year.
Far from being a problem unique to Vancouver, driver training and qualifications was a component of the structure that required improvement. As is often the prime impetus for change, the city's taxi industry was seen to have lost its concern for delivering quality service to the customer. Some drivers could be credited for working hard to provide good service, however, others had inflicted serious damage to the reputation of the industry through a perceived lack of commitment to meeting the needs of the taxi riding public. In June 1996, the city's Standing Committee on Planning & the Environment produced a report pinpointing a lack of universal, comprehensive driver education to be a crack in the foundation of the industry. Prior to By-law amendments the following year, drivers in Vancouver simply had to complete a short English proficiency test administered by the Permits and Licenses Department. Any additional training was then provided at the discretion of the individual brokerages. There was no uniformity in length and substance of training, and hence varied results were the outcome. Not surprisingly, the Committee felt that a mandatory training regime was in order.
The findings of the Committee followed with efforts by the tourism industry to bring the taxi industry into the tourism fold. As witnessed in other jurisdictions canvassed, it is not unusual for the tourism industry to take a leading role in helping to reform a municipal taxi industry. Beginning in 1995, the local tourism industry examined ways to improve the safety, professionalism and customer service provided by the industry. As a result, the Greater Vancouver Taxi Partnership was struck which included representatives of the Greater Vancouver taxi industry, the tourism industry, the Vancouver International Airport Authority, and the municipal regulatory agency. In March 1995, the Partnership launched a voluntary driver training program focused on tourism and driving skills training called TaxiHost. In the first two years of the program, a total of 527 of 3,800 licensed drivers voluntarily signed up for the program.
In June 1996, the Committee recommended that all new drivers are required to complete level one of TaxiHost. By January 1997, the By-law was amended to mandate that all new drivers were required to complete level one of TaxiHost. Current drivers can receive their level one credentials by passing challenge exams. The success of the program has led the recommendation to City Council that new drivers must complete up to level two of the program.
TaxiHost is comprised of four levels, with each level recognizing a higher level of professionalism and knowledge. In completing each level, drivers can market themselves as a "tourism host" for the city. Those drivers that complete all four levels receive a special Steering Wheel pin in recognition of their accomplishment and providing top rate service. The elements of each level are described in greater detail below.
Level one - driver - is an entry-level program involving applicant screening, English language testing and twenty-seven hours of training. It attempts to lay the foundation in such basic service tools as satisfactory language skills, local geography and road knowledge, developing an appreciation for the industry's role in the tourism sector. Arguably, the highlight of level one training is the "Superhost" component whereby students receive detailed instruction in tourism training. The standout quality of the "Superhost" course is evidenced by the growing number of post-secondary hospitality and tourism programs that have incorporated "Superhost" into their curriculum.
Level two - professional - requires the completion of level one, demonstrated language proficiency at a specified level, completion of 120 or more driving shifts in the past twelve months, and 18 to 20 hours of training and testing in specified courses that focus on teaching candidates to be "professional" drivers. The courses covered include: Driving with Finesse (in-car collision prevention), Taxicab Driver Safety (assault avoidance awareness), Advanced Geography (similar to the system of road testing followed in London, England), and Transporting People with Disabilities. In total, 100 hours worth of instruction and testing is conducted at the professional level.
Level three - certified - requires drivers to take the initiative in preparing for a performance appraisal by a supervisor, an evaluation by an anonymous passenger, and successful completion of an exam that meets the criteria laid out in the National Occupational Standards: Taxi Driver Training. Hands-on training and testing is emphasized, and tourism education is furthered.
Level four - taxi guide - necessitates that candidates demonstrate extensive tourism knowledge. In effect, the entire emphasis of level four is on the service provided to the customer. Candidates must complete a written examination of tourism knowledge, an oral evaluation by tourism industry professionals, and a performance appraisal by a supervisor.
The TaxiHost program is administered by the nonprofit Justice Institute of British Columbia. In addition to running the TaxiHost Centre, the Justice Institute also trains other trade workers such as bus drivers and paramedics, to name a few. The participation of an education centre in the training of taxi drivers has been credited for having a positive impact in boosting the morale of drivers. In taking their classes alongside other professionals, drivers benefit from the understanding that their job has been acknowledged as a post-secondary course of study.
By all accounts, TaxiHost has been an unqualified success. More importantly, it has had the ripple effect of inspiring other jurisdictions to reevaluate perceptions of the role of the taxi industry in the web of public transportation. Regular foreign interest and inquires speak to the relevance and creative aspects of Vancouver's driver training. In 1996 alone, the TaxiHost program was honoured with four international awards for program excellence and innovation. Two came from the Western Association of Convention and Visitor Bureaus, and two came from the Pacific Asia Travel Association for program design. The hotel and tourist industries remain strong supporters of the program. The Canadian Human Resource Council, an umbrella tourism organization, has purchased the rights to the program. As well, the Ontario Tourism Education Council is currently adapting the program to the Toronto market.
4.4.2 Customer Service
As in New York, the Permits and License Department has been active in implementing changes that allow for a more effective consumer complaints process. In the past, a lack of access to pertinent information impeded a customer's successful filing of a complaint. It was often difficult for the staff to determine the car number and driver of taxicabs for which a complaint had been filed due to the fact that customers were not aware that the information was needed, and even if customers were aware, it was not readily available. Recent amendments to the By-law to rectify the deficiency include requiring that:
Although the initial industry reception to the TaxiHost was less than favourable, drivers have come to accept the merits of the program. Taxi appreciation days, where TaxiHost graduates and exceptional drivers are recognized, have been key initiatives in an effort to garner driver support. Some initiatives to improve driver's tourism knowledge, while rewarding them with some personal benefit, have included giving taxi drivers passports entitling their families to free admission to 25 visitor attractions in Greater Vancouver. The tourism industry and regulatory body have been active in providing supports to aid the education process; supports that ultimately benefit service to the customer and thus the driver's opportunity for more fares.
Vancouver taxi drivers do not receive employment benefits from the municipality. The city does not employ drivers. Each driver is seen to be an entrepreneur who must sell his or her skill on the open market. With such independence comes the responsibility to secure his or her own benefits and pension, either through arrangements with the brokerage or private efforts.
4.4.4 Vehicle Characteristics
Vehicles that are utilized as taxicabs must meet the standard specifications pertaining to trunk size, number of doors, head room and floor space. Taxicabs in Vancouver can be no more than two years old upon entry to service. An inspector may grant an exemption for vehicles more than two years old, for a limited period, if the exterior appearance of the vehicle and its interior are of a standard comparable with its original construction. There are no restrictions placed on the age of retirement of vehicles.
4.5 Montreal, Quebec
The City of Montreal sought to improve the profitability and effectiveness of its taxi industry through an ambitious license buyback plan in the late 1980s. Between 1985 and 1990, 1,287 licenses were eliminated from the Montreal market, a 25 per cent decrease in the 5,222 licenses formerly in effect.
The buyback plan was instituted on a volunteer basis. The Ligue de taxis de Montreal arranged for the Department of Transportation to appoint a trustee to manage the plan. The trustee was instructed to purchase licenses offered for sale at their market value, with the market value being set at $10,000 in June 1985, adjusted to $18,000 in June 1987, and finally $30,000 in April 1990. The cost of the buyback plan was consequently absorbed by license holders vis-a-vis the annual license fees ($1,000 per license) and the transfer charges payable by those purchasing a license on the open market. The transfer charge was initially $10,000, but had climbed to $20,000 in 1987. However, the income generated by the transfer changes eventually led to the elimination of annual license renewal dues by 1990.
Despite the cost, license holders spent approximately $21 million dollars in the buying back of 1,287 license. One of the primary incentives was the hope of benefiting from the increased profitability of taxi operations and the added value of licenses, as per the reduced competition.
In the same period in which the closed market was reduced to increase profitability, a mandatory driver training program was instituted with the aim of improving service delivery. Since May 1994, all drivers in the major urban centres of Quebec are mandated to take a training course lasting approximately sixty hours. The topics covered include:
This basic training regime is often augmented by more detailed training on the knowledge of the area in which the taxicab driver intends to provide most of his service. Such regional authorities as the Urban Community of Montreal oversee this additional instruction.
It follows that the implementation of a uniform training program, which demand more attention and commitment from prospective drivers, had the effect of significantly reducing the number of new drivers entering the market. The trade off for the reduction in the number of drivers was an increase in the number of better trained taxi operators. That is, compared to existing drivers, the new generation taxi driver is considerably more familiar with the relevant provincial and municipal legal provisions, the nature of the industry, and the importance of customer service.
Perhaps the aspect of the Quebec taxi industry that has garnered the most attention of late has been the introduction of the professional development program entitled Taxi Ambassador to the Montreal industry. Similar to Vancouver, Montreal is one of the few jurisdictions that has made retraining of existing drivers a priority vis-à-vis the availability of continued driver education.
Launched in May 1995, the Taxi Ambassador "skills-upgrading" program has been tested on the South Shore of Montreal, in Trois-Rivieres and in Sherbrooke. At all these locations, the program has been implemented through the cooperation of local organizations responsible for tourism promotion and taxi owners' leagues.
With regard to logistics, the program was designed and developed for taxi drivers by the provincial Department of Transportation and the Department of Tourism, in cooperation with the Taxi Bureau of Montreal, affiliated regional tourism organizations of Quebec and representatives of the taxi industry. The training course has two one-day modules (six hours of training per module): the first addresses client reception and service, and the second deals with regional tourist attractions. Drivers who subsequently complete these modules can officially market themselves as "Taxi Ambassadors". Graduation includes the granting of both an official certificate and a "Taxi Ambassador" permit.
The distinction a driver carries with a "Taxi Ambassador" permit is significant. Not only are graduates better qualified to offer sightseeing tours in their region, industry representatives have agreed that only drivers that partake in the program can serve the Montreal Airport and the Montreal Casino - two high volume locations. Presently, the taxi industry self-polices entry onto either site by nonqualified drivers. However, the Taxi Bureau is campaigning to convince the Casino and Airport Authority to make "Taxi Ambassador" qualifications part of their entrance conditions.
As in Halifax and Vancouver, existing drivers were slow to embrace the concept of professional development training, citing that customer service training was not needed and even insulting. Nevertheless, the involvement of industry representatives in the development of the program, and the increased professionalism and respect bestowed upon the industry, has had an impact in convincing existing drivers to change their views.
Of significance, the professional development opportunities available to experienced drivers are not limited to Taxi Ambassador. The Quebec Department of Transportation has developed two additional courses, which are now also included in the new mandatory driver training.
In sum, the professional training initiatives in operation in Quebec are seen to have been a resounding success. Such opportunities have raised the participants' awareness of their important social role, the vital service they provide to certain people, the public recognition they gain from the training, and lastly, their interest in being better prepared professionally to meet the demand for more specialized services. In an effort to continue the momentum of enhanced driver knowledge and service, An Act respecting transportation by taxi was recently amended to include the authority to prescribe mandatory retraining courses prior to taxi driver license renewals through regulations in areas designated by the regulations.
PART V: THE SOLUTION
The Ambassador Class Taxicab solution combines regulatory actions with customer service and economic principles to meet the goals of the Task Force. First and foremost, the solution provides for significant improvement to vehicle and customer service quality. Further, the solution responds to concerning trends within the taxicab industry such as the decline taxicab and customer service quality, the reduction in the number of owner-drivers, and the overall increase in stakeholders paralleled by a relative decrease in taxicab business participants. The reformed Toronto taxicab industry provides an environment for success to individuals who want to commit to a taxicab business and actively participate in a driving or management capacity.
The solution proposed is a comprehensive package of recommendations organized by five points to focus on customer service:
1. Create a Taxicab Passenger Bill of Rights
2. Create Ambassador Class Taxicabs
3. Improve Training
4. Improve the Taxicabs
5. Strengthen Enforcement
It is important to the success of this plan that individual elements should not be divided or approved individually. Together, the recommendations meet the overall intentions of the guiding principles and goals of the Task Force. As such, each recommendation is intertwined with others and any change to the package must be considered with respect to implications that it will cause to the industry. It is therefore recommended that the recommendations for reform be approved as a package recognizing the interrelationship of all initiatives and that the all changes are necessary to improve Toronto's taxi service in accordance with the goals of the Task Force to Review the Taxi Industry (Recommendation 2).
5.1 Taxicab Passenger's Bill of Rights
The consultation and research conducted by the staff resource team identified a chasm in regards to a clear statement of the expectations that a taxi driver must meet in his or her service delivery efforts. On the one hand, the taxi industry recognized that customers held negative impressions of the service that is often provided. On the other hand, industry representatives often spoke in generalities when the subject of customer service was approached. Many could point to the importance of customer service, yet there was no indication that the industry had taken direct steps to define customer service.
The Taxicab Passenger's Bill of Rights seeks to provide clear standards that should be met every time a customer enters a Toronto taxicab. Only with clarity can drivers have a point of reference against which they can measure their behaviour. The Bill of Rights also provides customers with higher standards against which they can measure the performance of the service provider. The Bill of Rights also acknowledges the importance of customers and serves notice to wayward drivers that mediocre service will not be tolerated.
As mentioned in the discussion of the initiatives in New York City, the Bill of Rights has been a successful undertaking in the effort to focus attention on quality of service standards. Customers in New York have embraced the notion that riding in a clean taxicab is not a privilege, it is a right.
The rapid expansion in technology in the modern age has no doubt had a hand in reducing the use of taxis of the delivery of parcels. From the fax machine to courier services, the taxi industry has had to contend with a reduction in its revenues. The reduction in revenue streams has come at a time when passengers have more options available to them for public transit. As such, the industry, in the interest of future viability, must find a way to win back the taxi riding public. Indeed, the customer is the reason for the continued existence of the taxi trade. The Taxicab Passsenger's Bill of Rights is an initiative that attempts to lay the ground work in the efforts to renew the focus on meeting passengers' expectations.
The workshops conducted on July 6, 1998 proved to be a useful forum to debate ideas in regard to the components of the Toronto Taxicab Passenger's Bill of Rights. All participants provided comment on the standards that should be adopted, with many of the same points coming forth in each discussion. There was general consensus that the adoption of a Bill of Rights would be of great use.
It is therefore recommended that Council adopt a new Taxicab Passenger Bill of Rights for all Toronto taxicabs, to be displayed on the back of the passenger seat, easily visible to passengers to inform that Taxicab passengers that they have the right to:
While the Taxicab Passenger's Bill of Rights is a laudable initiative to improve customer service, the effectiveness of the Bill of Rights can only be achieved if a much improved complaints process is put in place to enforce the standards. Presently, the public perceives the customer complaints process to be weak and ineffective. Conversely, drivers are not concerned that they will be disciplined for rude or discourteous conduct. It follows that the unacceptable behaviour of a few has unfortunately been to the detriment of the industry as a whole.
The main weaknesses that have hindered the current customer complaints process have been the lack of public awareness of a complaints phone number, and the inefficiencies in a hearing process that takes too long from initial investigation to final disposition. As long as the weaknesses persist, wayward drivers will have little reason to improve their attitude and relations with customers.
New York City and Vancouver have used improvements to their customer complaint process to assist in the reformation of drivers' attitudes, thereby raising the level of customer service. In New York City in particular, the number of complaints rose sharply following the widespread notification of a new complaint process. As customers saw their complaints leading to concerted action, confidence in the complaint process grew. Customers need to feel that their concerns, as they relate to service delivery, are being taken seriously.
The implementation of improvements to the customer complaint process has been well received by all stakeholders in the industry. Submissions from persons representing drivers, owners, and customers expressed consent regarding more noticeable publication of a complaint number, and more stringent penalties for those industry participants who are found to be at fault. It should be stressed that the purpose of the customer support hotline is to reinforce the standards of service that is to be expected of drivers and to educate taxi operators that these standards are non-negotiable.
In order to facilitate better enforcement of customer service concerns, the Task Force recommends that Toronto Licensing adopt the easy-to-remember customer service number 1-877-TO-TAXIS (Recommendation 7).
It is also recommended that Toronto Licensing develop a plan respecting steps to be taken to augment the current customer complaint process with a marketing plan and resolution process, and report back to the Emergency and Protective Services Committee within six months to identify any impact with respect to resources in order to provide the following:
Toronto Ambassador Class Taxicabs will provide a safe, comfortable, courteous and pleasant ride to residents and visitors. Improvement in the industry overall will provide fair returns among participants and will facilitate better enforcement. The intentions of these reforms are first to serve passenger needs, and second, to ensure that participants in the industry who comply with City requirements, benefit from the rewards of providing taxicab services.
5.2.1 Ambassador Class Taxicab Licenses
Ambassador Class Taxicabs take the positive features of the existing taxicab industry, and eliminates practices that have contributed to the current decline in quality of service. Statistics show that owner-drivers, with pride of ownership typically provide the best level of customer service. Ambassador Class Taxicabs will introduce more owner-drivers as Toronto taxicab operators and does not allow a complex system with five levels of management.
The increased number of participants that deal and take a portion of returns from individual taxicabs has also increased. As one workshop participant indicated, a taxicab can reasonably support a family but it cannot support five families. The ability of a driver to generate income can have a direct affect on how a driver relates to the public and takes pride in providing safe and comfortable transportation.
Changes to the structure of the industry must give consideration to the approved principles that drivers have the rights to expect and demand a fair return for their labour and owners have the right to expect and demand a fair return for their investment. Many claim that the structure of the taxicab industry in Toronto, in concert with the regulatory process, vehicle quality, and requirements for industry participants, is the formula for disaster that has resulted in a continued decline in quality. For the purpose of this discussion, structure addresses operating guidelines for participants within the structure and the number and characteristics of taxicab license plates.
The Toronto taxicab industry is an integral part of the overall transportation system that serves City residents and visitors. A taxicab is a transportation option for some and a necessity for others, and as such, availability, safety and service are important considerations.
Taxicabs and taxicab drivers are also often the first and last point of contact for visitors to Toronto, leaving often negative first and last impressions that diminish the positive experiences of a tourist's trip. The fact that the quality of taxicabs and taxicab services have diminished presents a negative image for the City that can effect tourism and economic development.
The Toronto Board of Trade advises that "tourism is the largest and fastest growing industry in the world and contributes almost $5 billion annually to the Toronto economy" (The Toronto Board of Trade, Submission to City of Toronto Task Force to Review the Taxi Industry, June 1998). There is little debate that the conditions and quality of service of the taxicab industry is of substantial importance to Toronto's promotion as a world class city. The taxicab industry's influence on the Toronto image can affect tourism and are important considerations in initiatives such as the 2008 Olympic Games. The taxicab service in Toronto must project and provide and highest quality and safety standards. Many stakeholders share the view that taxicabs and taxicab drivers are ambassadors to the City. The Ambassador Class Taxicab concept expresses the quality image that is so critical for the industry and the City to achieve.
It is therefore recommended that Council endorse the principle that Toronto is a world class city and that as ambassadors for a world class city, Ambassador Class Taxicabs must provide:
On one hand, many argue that the taxi market is overserviced and cannot accommodate an increase in the number of plates. The restriction on the number of plates has resulted in inflated plate values that allow owners to demand high fees, particularly in recognition of the over supply of drivers. There have not been plates issued by Toronto Licensing since 1992. A proposal to issue 100 additional plates in 1996, as proposed in the Thomas Schimski report, was not approved due to concerns raised on behalf of owners. Concerns centered on the expected decline in plate value, lease rates, and increased competition.
This results in the impression by many that the ownership of a license is an investment or pension rather than a business to be managed. Some argue that the purchase of the license is an investment in the industry that facilitates the operation of a taxicab. The industry benefits little by the transfer or sale of the plate within the current structure because, due to the restricted number of plates, the inflated value and regular income through leasing provides a demand for a limited supply. The barrier to entry is not an individual's interest in the industry or degree of participation but rather the access to capital to fund the purchase of what is currently valued at approximately $85,000. This practice, in effect, mortgages forward the value of the license and forces the risk to regain the value on the driver. While the City effectively owns taxicab licenses, it does not benefit from the market value created by a limited supply. Some other jurisdictions, such as New York City, benefit from the market value and sell or auction licenses. It is difficult to see how the sale of a taxi license within the industry benefits the industry in any way.
It is sufficient to say that the risk is limited for owners and Designated Agents, and fluctuates by lease rate adjustments caused by economic pressures during recessionary periods. In fact, there are instances where the driver is required to purchase the vehicle from the lessee or designated agent, possibly at an inflated cost, and sign ownership to the owner to ensure that the provisions in the By-law are met. The majority of risk within the current structure therefore, falls to the greatest extent on the drivers. Lease costs are established at a fixed rate and must be paid by the driver irrespective of the income earned on their shift.
There are also reports of payment by drivers in the amount of $2,000 to $5,000 required in advance as key money simply to earn the right to lease a taxicab. This indicates that the problem may be with how leasing is done rather than the fact that it is done.
It is difficult to determine the appropriate number of plates to service the City of Toronto. The existing formula does not adjust for market fluctuations or demand changes due to increased tourism or an aging population. Some in the industry propose that the number of plates should be calculated from the expected minimum base earnings for drivers. This results in approximately 2500 plates, significantly less than the number available today. Without other measures, this change would result in increased plate values and higher lease rates. While drivers would have less competition and would likely earn higher revenue, drivers who lease would not experience a substantial increase in net earnings as a disproportionate share would be assumed by the lessees, Designated Agents, and owners. This assumption is supported by previous trends in the Toronto taxicab industry.
Toronto Licensing currently uses a model developed by Coopers and Lybrand that if applied today, would result in 3713 taxicabs, nearly 233 more taxicabs than the 3480. Arguably, the City of Toronto would be well served by additional taxicabs. Based on extensive financial analysis, provided in the Appendices to this document, license issuance was evaluated based on a range of economic factors. The issuance of 300 new Ambassador Taxicab licenses annually provides a phased-in approach to introducing an open market with quality restrictions. This offers opportunity to drivers while giving consideration to impacts on existing stakeholders.
Recognizing the concern however, that a number of license holders do not participate in a taxicab business, the Task Force does not support the issue of additional taxicab licenses with the same characteristics as existing licenses. Changing the characteristics of new licenses to reflect a customer service ethic inspired the idea for Ambassador Class Taxicab licenses that are only be issued to owner-drivers. These new licenses provide for advanced training that launches the service as a profession, thereby projecting a positive image for the City of Toronto.
The financial analysis contained in the Appendix to this document indicates that 300 new licenses can be viable within the City of Toronto taxicab market, given the alternative structure and demand trends.
It is therefore recommended that Ambassador Class Taxicab licenses be issued to individuals that can provide high quality driving skills, high quality customer service skills, and high quality vehicles, at a rate not to exceed 300 new licensees annually (Recommendation 11).
Ambassador Class Taxicab licenses cannot be transferred or leased in order to ensure that the individual who successfully completes the advanced driver-training program is the individual providing service to the public. As a result, the Ambassador Class Taxicab license does not provide as much competition as the existing licenses as they cannot operate on a 24-hour a day basis. The rationale supporting the Ambassador Class Taxicab concept, is to reward individuals who want to participate and commit to the taxicab industry by driving a taxicab, with an opportunity to run their own taxicab business. The provisions within the existing structure that have allowed stakeholders to become investors have been removed from the new licenses. Ambassador Class Taxicab licenses will be issued to persons who:
(a) successfully complete the Advanced Ambassador Taxi training course;
(b) operate a vehicle that by year is one model year old at the time it enters service as a taxicab and that is replaced at the end of its fifth model year. It is recommended that Ambassador Taxicab licenses shall:
Recognizing the improved quality of the future Toronto Ambassador Taxicabs, it is appropriate for the new taxis to greet passengers at Toronto International Airport to serve as the City's ambassadors. Access to the airport for the purposes of picking up passengers is currently restricted to licensed airport-plated taxicabs and limousines. Arrangements for ground transportation at the airport is under the authority of the Greater Toronto Airports Authority. It is therefore recommended that Toronto Licensing enter into discussions with the Greater Toronto Airports Authority to explore initiatives that would allow Toronto Ambassador Class Taxicabs to pick-up passengers from Pearson International Airport (Recommendation 42)
With respect to vehicle quality, Ambassador Class Taxicab licenses require the provision of vehicles not more than one model year old that must be replaced by five model years old. In support of environmental and accessibility initiatives, taxicab owners are offered incentives for converting to natural gas or providing barrier-free accessible taxicabs. The new taxicabs should also be recognizable to the public. It is therefore recommended that respecting vehicle quality, the characteristics of Ambassador Class Taxicabs include:
Ambassador Class Taxicabs introduce the appropriate quality of service for Toronto as a world class city. Recognizing the advanced training with a focus to customer service and tourism, it would be appropriate for Ambassador Class Taxicabs to greet passengers arriving at Pearson International Airport. This is currently restricted to airport-plated taxicabs and limousines only, under the control of the Greater Toronto Airports Authority. It should be noted that the current arrangements provide a proportionately low number of Toronto licensed taxicabs serving the airport. It is therefore suggested that Ambassador Class Taxicabs be given access to service Pearson International Airport if agreements can be reached with the Greater Toronto Airports Authority (Recommendations 13, 43).
5.2.3 Conditions for Existing Licenses
The introduction of the Ambassador Class Taxicabs is done so with consideration of the impacts on the existing licenses. While Ambassador Class Taxicabs will meet high quality standards when they are introduced, changes to existing taxicabs must be phased-in over time to allow stakeholders the opportunity to effectively manage the change. The principles of the new Ambassador Class Taxicab, however, need to be adopted by existing industry stakeholders at the outset. The intention of this proposal is to eliminate passive investors, ensure that all stakeholders are active participants, allow licenses to continue to be transferred or leased, and encourage a trend to an increase in owner-drivers. It is therefore recommended that the existing 3480 taxicab licenses be grandfathered and the characteristics of the standard taxicab licenses include:
(i) transferability of licenses as currently provided for under By-law 20-85 for a period of two years;
(ii) after two years, licenses may be transferred only to persons holding a valid Toronto taxicab drivers license who may:
The new Ambassador Class licenses must operate in concert with existing licenses that, with different characteristics, must also adopt a customer service focus. Given that Ambassador Class Taxicabs are characterized by the quality of vehicle and the advanced quality of driver, existing standard license owners should be encouraged to operate at the Ambassador Class level. The existing 3480 grandfathered taxicabs (standard license) may be designated as Ambassador Class Taxicabs if the vehicles meets the Ambassador Class Taxicab vehicle quality provisions as defined by the age of vehicle; and the driver successfully completes the advanced Ambassador Taxicab training program. It is therefore recommended that a taxicab operating with a standard license may be designated as an Ambassador Class Taxicab where the standard license holder:
5.2.4 Designated Agents
Many industry participants believe that designated agents provide a critical service to the industry, serving as managers to individuals who do not wish to manage their own plates. In fact, designated agents were introduced to assist industry widows. They now represent industry widows and non-participant investors. Designated agents currently must be licensed as owners or drivers. A number of participants agree that designated agents should be licensed, which also has support from the former Licensing Commission that previously recommended such action. This change, to date, is not implemented subject to clear definition of designated agents.
Various stakeholders provided information to the Task Force that is available to assist Licensing to develop appropriate licensing requirements. Briefly, submitted materials indicate that Designated Agents manage the industry. A number of participants raised concerns "about agents who have no direct interest in the industry and whose behaviour is detrimental to the public" (Co-op Taxi Associates Committee, Reforming Toronto's Taxi Industry Myth or Reality/Perception or Fact).
As proposed by some stakeholders, the reference to managers is an appropriate reflection of the position within the industry and licensing managers will clearly define this role. The designated agent may control between one and 242 taxicabs with five being the average. Regular training and testing of all industry participants, including managers, is a key component to establish a common public service goal and improve overall service quality. Clearly, such action will ensure that the activities of these key players serve to benefit the public and support the goals of the industry. It is therefore recommended that Toronto Licensing in consultation with the City Solicitor, seek to amend By-law 20-85 to license designated agents as managers, subject to terms of duties and obligations to be developed by Toronto Licensing (Recommendation 49).
Leasing is described by many as a negative force in the industry while others feel that it is essential to ensure service 24 hours a day. Leasing along with the presence of designated agents, provides the mechanism by which investors can earn returns from a license plate without participating in the industry. Leasing also provides the means for long-time participants to retire and continue to make a living from their taxicab license.
When leasing was introduced, concerns were raised that the responsibility for the taxicab and the quality and safety of service should not be passed from the owner to the driver. For this reason, the owner is required to provide an insured taxicab and all necessary equipment. However, this requirement is often not fulfilled in lease situations where the vehicle may, in fact, be purchased by the driver and transferred to the owner's name to meet the By-law requirements.
Some propose that to eliminate leasing would resolve many of the problems in the industry, however, the impact on the existing industry would also be severe if leasing was eliminated outright, and some stakeholders would suffer significant harm.
Statistics kept by Toronto Licensing indicate that of the current 3480 taxicabs, approximately 75 per cent are leased and 25 per cent are owner-operated. This notes a substantial decline since 1982 when only 33 per cent of taxicabs were leased (Thomas, Schimski, Report of the By-law Sub Committee on Taxicab Leasing and Related Matters October 8 1996).
The lessee may lease one more taxicabs, and may work as a driver but is not required to do so. A lessee must be registered as a driver or an owner with Toronto Licensing. Some plates are under control of both a designated agent and a lessee. It is difficult to determine rationale for this practice, however, it is likely that a driver's income is less when revenue is shared with a lessee, designated agent and an owner. The Thomas Schimski report recommended that it would be appropriate to allow a designated agent or lessee, and not both. The intention of this was to reduce the number of participants associated with individual taxicabs. Practically, however, this change is difficult since the lessee is the party to lease agreements with a designated agent.
As discussed earlier in this report, the role of designated agents is effectively to manage taxicabs on behalf of owners. Lessees who lease more than one taxicab or do not drive, also assume a management role. To eliminate overlap between management functions offered both by designated agents and lessees, it is proposed that lessees become operators and as such, must lease one taxicab only that they drive on a full-time basis, with provision for alternate drivers. As currently provided for within the By-law, it is also proposed that new drivers who operate standard taxicabs complete the existing driver training offered by Toronto Licensing. While the existing training program is not as advanced as the training proposed for the Ambassador Class taxicabs, it provides a reasonable introduction to the Toronto taxicab industry. It is therefore recommended that leasing of taxicabs continue for standard taxicabs, as currently provided for under By-law 20-85 with the following amendments:
The Municipal Act, under s.232(1), gives the city the authority to license, regulate, and govern owners and drivers of taxicabs. However, the city does not have the authority to become involved in the business affairs of a taxicab business. Due to this prohibition, the city cannot set lease rates, even if the setting of lease rates would be for the purpose of putting better cabs on the road through greater revenue sharing between owners and drivers. At a minimum, provisions respecting the terms for cancellation of leases should be introduced as a commitment to drivers who are committing to the industry. It is therefore recommended that Toronto Licensing investigate with the Municipal Affairs Office of the Province of Ontario, the possibility of setting limits on lease rates and conditions for lease cancellations (Recommendation 17).
5.3 Improved Driver Training
The service delivered to the taxi riding public is often a reflection of the skills held and dedication shown by those charged with delivering the service. This principal is not new and it has been widely expressed in the submissions made to the Task Force by owners, drivers, and more importantly, customers. Drivers should know how to find any destination in the city, they are to know the most direct route, and they are to deliver this service in a courteous manner. However, it was repeatedly made clear to the Task Force that the link between the skills held by the driver and the service delivered has become disjointed. In effect, the public service focus in drivers' delivery of service has been lost. In an independent survey on customers' views on improvements that must be made to the taxi industry, change to the structure was given some attention, but more than half the comments related to service delivery concerns.
Although the Task Force had the opportunity to receive public input through various fora, the message delivered by participants was often the same: the taxi industry has suffered a serious decline in driver's tourism and geography knowledge. As such, as industry stakeholders recounted the problems relating to customer service, they were also consistent in their calls for changes to the driver training program. Indeed, the Toronto Licensing Department has taken steps to address the weaknesses in driver training; as evidenced in the launching of the new sixteen-day program in October 1996. While the efforts represent a significant improvement, there are further refinements that can be made to achieve the goal of putting the more knowledgeable and courteous drivers on our city streets.
The economic climate has contributed to providing an increased role for taxi transportation to the city. Tourism - a principle bastion for taxi revenue - has developed into a moneymaking engine for the city of Toronto. Tourism is the largest and fastest growing industry in the world and contributes almost five billion dollars annually to the Toronto economy (Tourism Toronto and the Toronto Board of Trade, May 1998: 2). In 1997, Toronto hosted approximately, 20 million visits by tourists, convention delegates, and business. Add to these figures the active theatre, restaurants and entertainment complexes enjoyed by local Torontonians, it is clear that the taxi industry is an important part of transportation and serves thousands of individuals each day.
Consequently, the lack of confidence in the taxi industry's ability to service customers at a satisfactory level should be a major concern. Often complaints focus on the lack of driver knowledge of the city and the unsafe condition of the taxicabs.
The importance of the driver-training program to the improvement of service to tourists and native Torontonians cannot be minimized. Halifax, Montreal, and Vancouver are just a few of the jurisdictions that have acknowledged the relationship between outstanding driver training and service delivery. Most often, reform efforts have focused on making this relationship more pronounced by injecting substantial tourism training components into training regimes. The adjustment has proven fruitful for those jurisdictions that have altered their driver training program to address the tourism deficiency. Toronto is a worldclass city and yet some estimates quote that there are approximately 10,000 undertrained drivers, with only 250 drivers completing proper training each year and little remedial assistance for those already in the system. The Task Force and industry participants have come to see the current state of affairs as unacceptable and detrimental to the promotion of the City of Toronto as a place to visit and conduct business.
It follows that the revamped driver training program would construct its course content and method of evaluation around the theme of the relationship of the taxi industry to the larger context of the public transportation network and tourism industry. The program would retain such standard industry courses as geography, defensive driving, communication skills, cab maintenance, and By-law provisions. However, intensive training in the areas of the historical evolution of the city, identification of major buildings and tourist attractions, proficiency in English, and an understanding of the cultural nuances of the neighbourhoods that comprise the city would be necessary additions. From the deputations to the workshops to the general submissions, the industry expressed support for a driver training program that focused more on the aforementioned market-relevant skills. Industry representatives also expressed their approval for retraining for existing drivers, as well as a lengthening of the training program.
By improving driver training in the manner described above, the professionalism of the industry is given a boost. Drivers can market their skill. A dramatic improvement in the degree of professionalism and knowledge demonstrated is a key step in courting customers to take a taxi for preference rather than need. Rather than being a disincentive to tourists and conventions, the taxi industry could be repositioned in the tourism industry as one of the positive reasons guests choose to repeat their visit to the city. Ultimately, the improved prospects for increased industry revenue and benefits to the local economy become clear.
The revamped driver training program is directly in line with the guiding principal that "the general public has the right to expect and demand courteous, knowledgeable and experienced drivers." In order to meet this objective, the Task Force recommends the following change.
It is therefore recommended that Toronto Licensing develop and provide a five-day, taxicab license owner and Designated Agents certification course that must be taken annually by all taxicab license owners and Designated Agents and addresses at a minimum:
It is also recommended that Toronto Licensing develop and provide a three-day, taxicab driver retraining program that must be taken every two years by all taxicab drivers and addresses at a minimum:
(v) Defensive and rough weather driving skills including an in-car driving test; and
It is also recommended that Toronto Licensing, in accordance with City procedures, prepare terms of reference to contract out to colleges or other appropriate training institutions, the development and provision of an up to three-month, advanced driver training program for the new Ambassador Taxicabs, that allows flexibility to registrants to take the program during the day or in the evening and addresses at a minimum:
Further, it is recommended that Toronto Licensing, in consultation with the City Solicitor, report to the Emergency and Protective Services Committee on the necessary amendments to the By-law to change the purpose of the current drivers list and owners list to a mechanism to determine who has access to the advanced Ambassador Class training for the purpose of obtaining a license. It is also proposed that access to the Ambassador Class training program for the purpose of obtaining a license, should continue at a one-to-one ratio from the owners list and the drivers list, as currently provided for in the By-law. It is also recommended that when an individual's name reaches the top of the list, they may:
It is also recommended that drivers and owners from the current list who take the course and do not pass, be given one opportunity to add their name to the bottom of the list and retake the training program Finally, it is recommended that the Commissioner of Urban Planning and Development Services report to the Emergency and Protective Services Committee within six months on the resource and budget implications respecting the new training requirements (Recommendations 24, 25, 26, 27, 28, 29, 30 ).
5.3.1 Technological Enhancements
Reforms aimed at expanding taxi ridership, and restoring consumer confidence in the industry, must also include the implementation of technological advancements. Today's taxi riders are sophisticated consumers who demand convenience and expediency in service delivery. We live in an age where money and information changes hands at a rapid pace. In order for the taxi industry to keep pace with the demands of a computer astute society, the introduction of new technological advancements must be part of the industry reform process.
As evidenced in the many written and verbal comments received by the Task Force, Toronto's taxis have had their market decreased by the introduction of fax machines and courier services. The fallout has left the taxi industry to focus on its original client base - people who use taxis to physically move around the city. It follows that as the industry seeks for new ways to increase industry revenue, it becomes clear that increasing the frequency with which people ride in a taxicab is the most reasonable target. Taxis that provide comfort and convenience through easier and more efficient trips can tap into this potential. The taxi industry must look to innovative practices in marketing itself as a technologically up-to-date industry, or else it risks being relegated to the sidelines as an outdated mode of transportation.
The need to implement technological enhancements is not limited to the benefits that are received directly by the industry. That is, the taxi industry is an integral part of those businesses that comprise a part of the service sector. Business enterprises, restaurants, and leisure venues welcome the customer's taxicab transport. It can be reasoned that as customers have more convenient access to taxis, it facilitates greater use of various downtown venues. Consequently, the local business, tourism, and entertainment sectors also stand to reap economic benefits from a technologically improved transportation option.
The research conducted and submissions received by the Task Force uncovered a bevy of technological innovations that will bring the Toronto taxi industry into the twenty-first century and make it more competitive. From Paris to Singapore to San Francisco, satellite tracking systems, point-of-sale transfers, and receipt-issuing meters have become widely used in the taxi trade. The usefulness of the technology includes improving enforcement of the By-law, maintaining accurate financial records, improving response times to customer calls, enhancing the enjoyment of the ride, and ensuring greater convenience for customers in dealing with taxi service.
It is therefore recommended that all Toronto taxicabs be equipped with a receipt machine that provides the passenger with a receipt noting the date and time of the trip, length of the trip, registered number of the taxicab, the fare charged, and the Toronto taxicab customer service telephone number; and that information from the receipt equipment be provided to Toronto Licensing for information, training, and review purposes (Recommendations 5, 6).
There were a number of innovations described in the research and are used successfully in other jurisdictions. Many of these ideas offer a unique and competitive quality to other jurisdictions. The suggestions listed below are referred to taxicab industry participants for information.
A number of concerns were raised in during the consultation phase that were more relevant to the business practices and culture of the industry than they are to regulation. As such, it is not within the mandate of the City of Toronto to impose change in these areas. These concerns relate to the design for a drivers' code of ethics, driver safety initiatives and benefits plans, and performance incentives for industry participants. Other issues that the industry could usefully participate with the City on include improvements to barrier-free accessible taxicabs and passenger complaints handling. These issues are reasonable concerns but cannot be mandated by the City. It is therefore proposed that the TAC address these issues within its mandate.
5.3.3 Barrier Free Cabs
As the demographics of the City of Toronto changes, the taxicab industry is confronted by opportunities for growth and expansion. The population shift in the next ten to fifteen years will present the transportation system with an aging citizenry that will be looking for available options for continued mobility. The Toronto taxi industry will be expected to take a more active role in providing mobility service.
Although some industry participants have taken the initiative in tailoring their service to the accessible transportation niche, more involvement is needed. Those experts in the field who contacted the Task Force were clear and direct in their criticism of the industry in its failure to meet a growing community need. However, more scathing comments were reserved for the lack of accessible transportation etiquette demonstrated by most drivers. Failing to mount the sidebars on the vehicle ramp, failing to assist the mobility impaired passenger to and from the front door, and a general lack of sensitivity to the situation is unacceptable.
In total, there are thirty-four taxis, operating out of seven brokerages, in the Toronto area. The critical mass in the numbers of accessible taxis must be addressed. Other leading taxi industries, such as London, England and Halifax, have made their taxis more barrier-free accessible. The City of Toronto should be another jurisdiction to take a leading role.
The Task Force suggests that the Taxicab Advisory Committee give consideration to the following positive initiatives:
The concept of industry self-management is an initiative introduced by the Province of Ontario that by partnership, assists businesses to manage themselves. The self-management practice does not end the regulatory role of government but works in concert to carry out the responsibilities of the industry with common goals. There are a number of issues that are identified in this report, as brought forward by industry stakeholders, that are not within the mandate of the City of Toronto to address by regulatory means. These issues are important to resolve however, to serve the interests of the industry and its customers. Focus on such matters will also assist the industry to organize and work with a common voice to achieve business improvement. The Taxicab Advisory Committee has been the representative body for the Toronto taxicab industry. The CAO is required to develop terms of reference for the Taxicab Advisory Committee following the separation of the administrative function (Toronto Licensing) from the adjudicative function (Toronto Licensing Commission, soon to become the Licensing Tribunal). The TAC would be an effective mechanism to introduce the concept of industry self-management to address issues and continuously improve the industry. The TAC will also provide a forum to coordinate with Toronto Licensing respecting training programs and other industry priorities.
It is therefore recommended that Council endorse the concept of self-management and work to create the conditions that will permit it to be implemented over time. It is also recommended that Council endorse the continuation of the Taxicab Advisory Committee and that the TAC be structured is such a way to develop the industry capacity for self-management. To accomplish this, it is recommended that the structure be amended to include: elected representation from taxi drivers, elected representation from taxicab license owners, elected representation from industry managers including Designated Agents and brokerages; and that there be ex officio representatives of Toronto Licensing, the Board of Trade, the Hotel and Restaurant Association, the Province of Ontario, the proposed Greater Toronto Services Board, and the Greater Toronto Marketing Association. It is recommended that the mandate of the TAC include:
It is also recommended that the Chief Administrative Officer (CAO) address industry self-management in concert with municipal regulation in the development of the terms of reference for the Taxicab Advisory Committee (Recommendations 18, 19, 20, 21, 22, 23 ).
5.3.4 Fare Structure
In considering the course of action for improvements to the industry, due diligence was given to the possibility of lowering the fare charged. Some industry stakeholders suggested that the lowering of the fare would be an effective gesture to increase ridership. However, the research conducted by the staff resource did not support this position.
The elasticity of demand as it relates to fare structures did not confirm that the cost of a taxi ride was a key determinant for whether an individual would choose to take a taxi. Instead, other features such as the safety of the car and the quality of service provided were stronger factors.
Of significance, a decrease in the fare charged could have the negative effect of decreasing a driver's revenue further. In effect, the operator of a taxicab would have to pick up more fares, than is presently the case, in order to preserve their current market revenue. The driver's work- day would be significantly lengthened for little gain.
The Task Force, however, recognizes the increased dangers that drivers constantly face as they serve the public at night. Any changes to the fare structure would aim at addressing the dangers drivers expose themselves to when they faithfully provide service to the public during the evening hours.
A premium fare should be charged during the evening shift. The purpose of the premium would be to encourage drivers to provide service during the evening hours and to acknowledge the role of the driver has assumed in helping to provide twenty-four hour coverage to the city. It is therefore recommended that an evening surcharge, in the amount of $2 per trip, be introduced between the hours of 9:00 p.m. to 6:00 a.m. (Recommendation 46)
5.4 Improve Taxicabs
The impact of the quality of the taxicab fleet on the image of the City is obvious and was discussed earlier in the report. Taxicab passengers expect safety and comfort while riding in a taxicab, and with a progressively aging fleet, service is not meeting expectations. Many vehicles take advantage of the age extension that was initially introduced to accommodate classic and higher quality luxury vehicles. The outcome is a fleet of vehicles, many over ten years old that are deteriorating in quality. Given that many taxicabs operate 24 hours a day, the abuse on the vehicle is excessive and is evident by physical appearance. For many passengers, physical appearance reflects on the mechanical reliability and safety of the vehicle. Continued use of these vehicles also leads to increase maintenance costs.
It is critical that all Toronto taxicabs are safe from a mechanical perspective and comfortable from a physical perspective. Passengers must not only be safe but they must feel safe as reflected by the interior and exterior condition of the vehicle. As raised earlier in the Taxicab Passenger Bill of Rights, a number of requirements need to be imposed including cleanliness of the vehicle and easy access to safety belts.
Recognizing the influence that the Toronto taxicab fleet has on the environment, conversions to natural gas is encouraged. Also, as discussed earlier, taxicabs form part of the transportation system and as such, particular sensitivity should be given to transportation for the disabled. This issue is also addressed with respect to training initiatives and efforts that can be made by the Taxicab Advisory Committee.
Therefore, it is recommended that the proposed quality improvements be introduced immediately for Ambassador Taxicabs and phased-in for grandfather taxicabs such that:
(i) by the year 2002, a vehicle that by year, is one model year old and must be replaced by five model years old as defined in the description of motor vehicle portion of the current Ontario Ministry of Transportation and Communications passenger motor vehicle permit for any vehicle and that the upgrade to vehicle quality be phased-in as follows:
(iii) in the year 1999, no motor vehicle that, by model year, is more than eight years old (1992 model or newer) shall be used as a taxicab by the time of the second mechanical inspection of such taxicab; and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than three years old;
(iii) in the year 2000, no motor vehicle that, by model year, is more than seven years old (1994 model or newer) shall be used as a taxicab by the time of the second mechanical inspection of such taxicab; and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(iv) in the year 2001, no motor vehicle that, by model year, is more than six years old (1996 model or newer) shall be used as a taxicab by the time of the second mechanical inspection of such taxicab; and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(v) in the year 2002, no motor vehicle that, by model year, is more than five years old (1998 model or newer) shall be used as a taxicab by the time of the second mechanical inspection of such taxicab; and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(vi) in 2003, no motor vehicle that, by model year, is more than five years old (1999 model or newer) shall be used as a taxicab by the time of the second mechanical inspection of such taxicab; and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than one year old; and
(vii) a vehicle that is converted to natural gas or a taxicab converted for barrier-free accessibility is subject to a two year extension to the retirement date (Recommendations 31, 32).
In order to ensure that taxicab owners participate in the management of their vehicles it is also recommended that all taxicab license owners must participate in the industry by:
The principle that the City has the right to expect and demand that its By-law will be obeyed recognizes numerous reports that realities within the industry do not act within nor reflect the intention of the By-law. Focus on this principle leads to the realization that contravention of the By-law within the taxicab industry occurs for two reasons:
(i) the ability of the regulator to enforce and impose meaningful penalties; and
(ii) the complexity of the By-law that is difficult for many to understand.
By-law 20-85 is a challenge to enforce, in part, due to a continued decline in enforcement staff with increased responsibilities over recent years. In part, increased demand for enforcement results from the decline in the quality of taxicabs and the commitment to enforce other licensees, including body rub parlours and strip clubs. The number of enforcement officers over the period from 1993 to present has declined from 48 to 42 staff. Recognizing the deterioration of the taxicab fleet, the demand for enforcement has increased over the same period. Although Toronto Licensing advise that improved efficiency and reassignment of clerical duties allows enforcement officers to do more work, they concede that increased offenses in the taxicab and other industries results in a need for more staff. Presence of enforcement officers has declined in real numbers and in proportion to level of responsibility. As a result, confidence that little or no penalty will result has increased and a number of taxicab operators do not conform to the By-law.
It is critical for the City of Toronto to commit to meaningful enforcement within the taxicab industry. The perception by many is that ineffective enforcement allows individuals to operate inferior and unlicensed taxicabs in contravention of the By-law to the detriment of those who are providing good service in accordance with the By-law. In addition, the result of a proportionate reduction in enforcement combined with aging taxicabs is an unacceptable number of dangerous and unsafe taxicabs serving the streets of Toronto. One key component of that commitment is the dedication of additional enforcement staff to the taxicab industry, particularly during the period of transition. It is expected that once changes are implemented, the improved taxicab industry will have much less demand for enforcement services. It is therefore recommended that Toronto Licensing increase the commitment to enforcement of the taxicab industry by 25 per cent, requiring additional enforcement staff of ten full-time equivalents (Recommendation 33)
Recent taxicab safety inspection blitzes prove the dangerous and unsafe condition of many Toronto taxicabs. In fact, a summer inspection blitz involving Toronto Police and Licensing and the Ministry of Transportation of the Province of Ontario resulted in removing plates from 14 out of 21 vehicles inspected. This is supported by Toronto Licensing inspection records, that show 2 per cent of taxicabs fail scheduled inspections on dangerous and unsafe grounds. In other words, at any one time, 70 taxicabs are providing service to customers under dangerous and unsafe conditions. This is clearly unacceptable and must be remedied immediately. A program of random taxicab inspections will effectively augment the three annually scheduled mechanical inspections. It is therefore recommended that Toronto Licensing work with the Ministry of Transportation of the Province of Ontario to develop an inspection program to provide regular taxicab safety blitzes (Recommendation 39 ).
5.5.2 Taxicab License Fees
Current practices require that Toronto Licensing recover operating costs from fees paid proportionately by licensed industries. The proposed fees for 1999 have been reported by Toronto Licensing in Clause No. xx of Report No. xx, considered by Council on October 1, 1998. Although the report noted that potential changes to licensing fees for the taxicab industry could result from the recommendations of the Task Force, timing did not allow them to hold the report pending release of the report of the Task Force. The report did suggest that any changes be addressed in the form of an adjustment of fees to taxicab licensees. It is therefore recommended that the appropriate adjustment, reported by Licensing in the amount of $800,000, be made to the 1999 Toronto Licensing operating budget submission and the increase in license fees be calculated for the next license renewal period (Recommendation 34). Also, it is recommended that Toronto Licensing report to the Emergency and Protective Services Committee, Budget Committee and Council, on the resource and budget implications respecting other recommendations in this report related to training requirements and the customer complaints process. (Recommendation 35).
5.5.3 Unlicensed Taxicabs
Perhaps the most common concern among industry participants is the presence of unlicensed taxicabs be hailed and used by passengers from the streets of Toronto. Some in the industry claim that pirates drain as much as 25 per cent of the monthly taxicab revenues from Toronto taxicab licensees.
For obvious reasons, it is in the interests of the taxicab industry for unlicensed taxicabs to be eliminated so that the full benefit of the taxicab market within the City of Toronto serves to benefit Toronto licensees. It is also in the best interests of the City to remove poachers as they provide service to residents and visitors outside of regulatory control, and as such, may offer lower rates and may be unsafe. Many passengers who use pirate taxicabs are unaware that the vehicle and driver are not licensed to operate in the City of Toronto. The focus for customers is availability, safety, and quality of taxicab services.
For enforcement staff, charging unlicensed taxicabs is difficult due to the definition of the offense. As claimed by Toronto Licensing, they are required to witness money exchange hands to be successful in prosecuting such offenses. It is also clearly difficult for a passenger to agree to attend a hearing as a witness on such matters. Solutions have been found to similar problems by amending the offense such that enforcement and prosecution are more successful. For example, charges can be laid for solicitation for purposes of prostitution without witnessing the act. A similar change in this circumstance could greatly assist in the reduction of unlicensed taxicabs. It is therefore recommended that Toronto Licensing, in consultation with the City Solicitor, report to the Emergency and Protective Services Committee, on recommendations for changes to By-law 20-85 or other legislation to enhance enforcement of licensing By-law offenses within the taxicab industry (Recommendation 36 ).
A number of deputants indicate that hotel employees sometimes take payment to guide departing guests, particularly those leaving for a big fare trip to the airport, to taxicabs unlicensed in the City of Toronto. The Hotel and Restaurant Association is aware of this situation and would support a solution that ensures good quality service that reflects a positive image for hotels and Toronto. From their perspective, it is important that the departing impression for their guests is not tainted by an insecure ride in an inferior taxicab. In fact, the Hotel and Restaurant Association indicated that in their view, the most effective solution is to clean up the Toronto taxicab service and the propensity to use cleaner and newer, albeit unlicensed, taxicabs would greatly diminish. While this may be true, it is suggested that ongoing discussions between industry participants and the hotel industry to develop guidelines for hotel staff, along with quality improvements in the industry, will resolve this problem. It is therefore recommended that Taxicab Advisory Committee and Toronto Licensing work with the Toronto hotel industry to develop guidelines to ensure that hotel employees hail only Toronto licensed taxicabs for guests (Recommendation 40)
It is difficult for enforcement officers to discern between licensed and unlicensed taxicabs as they most often hold similar plates. Limousines are particularly difficult to identify, recognizing that discreet transportation is a characteristic of the business such that there are no visible markings on vehicles. Introduction of a distinctive and easily identified feature on Toronto taxicabs and limousines would be useful to assist enforcement staff in tackling this problem. This could be achieved through development of a coordinated license plate program with the Ministry of Transportation of the Province of Ontario. Preliminary discussions indicate that the Ministry is willing to work with the City in this regard. It is therefore recommended that the City of Toronto, in cooperation with the Ministry of Transportation of the Province of Ontario, implement a coordinated taxicab license identification program to provide:
It is also recommended that Toronto Licensing investigate the possibility of identifying limousines by a vertical "LIVERY" wordmark on the Ontario license plate that clearly identifies the vehicle as a limousine (Recommendation 38).
Another key to the ability for unlicensed taxicabs to operate relates to provisions of the Municipal Act. Generally, taxicabs may only pick up fares in the jurisdiction in which they are licensed. The By-law requires that only Toronto Licensing licensed taxicabs may pick up fares in Toronto. Similar by-laws in other jurisdictions prevent Toronto taxicabs from picking up fares in neighbouring regions.
Section 232(1)(b) of the Municipal Act, however, allows for all airport-plated taxicabs to pick up passengers in the City of Toronto for conveyance to the airport. This provision has created a situation where out-of-town cabbies, entering the city under the guise of picking up a prearranged fair for transport to the airport, have fallen into the practice to picking up hailed fares. Of the roughly 600 airport-plated vehicles, only 70 are Toronto Licensing licensed. It follows that some 530 taxicabs operate within Toronto boundaries, to the detriment of Toronto taxicabs.
While the By-law provides for unlicensed vehicles to be penalized, such prosecutions are rendered impractical by the Municipal Act provisions; quite simply, it is almost impossible to prove in a court that the infringing taxicab is not engaging in airport business as authorized by the Act. In effect, the provision paves the way for over 500 airport-plated vehicles to operate in Toronto without fear of penalty.
The Task Force feels that the most effective remedy for the problem would be to amend s.232(1)(b) to expressly prohibit out-of-town cabbies from picking up fares within the boundary of Toronto thereby removing the current exemption. It is therefore recommended that the City of Toronto work with the Ministry of Municipal Affairs and Housing of the Province of Ontario, to amend the Municipal Act and remove the exemption for non-Toronto, Airport plated taxicabs and limousines that permits them to pick up fares within the boundaries of the City of Toronto (Recommendation 41 ).
The taxicab industry, historically, provided reasonable incomes for drivers. Over recent years, a complex system has emerged that has eroded earning ability for many drivers. A number of drivers indicate that they need to work extremely long hours in order to make a decent wage. This practice should not be condoned as public safety is at risk if the driver is tired. The Highway Traffic Act provides for restricted driving hours for truck drivers in the interests of public safety. It is therefore recommended that the City Solicitor and Toronto Licensing staff report to the Emergency and Protective Services Committee within six months, on possible By-law amendments that would limit the hours that a taxicab driver can drive a taxicab to 60 hours per week (Recommendation 45 ).
One of the issues that became evident through various discussions is the lack of consistency in the enforcement and adjudicative process. The Licensing Tribunal is responsible to consider each case individually within the context of By-law 20-85 and render decisions respecting penalties. Depending on the type of offense, it may also be heard at the provincial court level as a punitive process. There have been cases where a provincial court has rendered a guilty decision that was not supported by the former Commission. It is essential that the By-law penalties be granted in a firm consistent manner by the Commission to protect the interests of the public. The success of the reforms proposed in this report relies on industry participants working in accordance with the By-law. Therefore, participants who contravene the By-law should be strongly penalized by the Commission for the benefit of participants who obey the By-law and for the protection of the public. As such, the Commission must serve as a disincentive for industry participants to contravene the By-law. It is therefore recommended that this report be referred to the Licensing Commission (the Tribunal) for information(Recommendation 44).
To assist the Commission, it would also be useful to identify minimum penalties for certain offenses. This action would also to inform industry participant of penalties that will be imposed if they violate certain provisions in the By-law, particularly actions that put the public at risk. The Municipal Act does not currently provide for minimum penalties recognizing that municipal licensing is a regulatory and not a punitive process. It is therefore recommended that Toronto Licensing discuss the possibility of amending the Municipal Act with the Ministry of Municipal Affairs and Housing of the Province of Ontario to allow for the introduction of minimum penalties for offenses under By-law 20-85, and report back to the Emergency and Protective Services Committee on the actions that can be taken (Recommendation 47 ).
5.5.5 Implementation Plan
It is expected that the improvement to the industry will be evident almost immediately with an estimated 50 per cent of the taxicab fleet being replaced in 1999. Implementation of the complete plan will take approximately five years and continuous improvement will be ongoing. The first Ambassador Class Taxicab licenses should be issued late in 1999 or early in the year 2000, recognizing the time required to develop the program along with the three-month training requirement. Once improvements are implemented, Toronto Licensing should monitor progress with respect to quality as measured by complaints and mechanical inspection statistics. It is also critical for Toronto Licensing to inform the industry on the status of the reform plan and its impact on the Toronto taxicab industry.
The details of timing and areas for responsibility should be further detailed and designed by Toronto Licensing staff. It is therefore recommended that Toronto Licensing develop an implementation plan that defines the schedule for change and includes provisions for:
In conclusion, over the past 30 years, the Toronto taxicab industry has suffered a gradual decline in service quality. The reasons for this trend are attributed to the structure of the industry and the regulations that govern it.
The results of this study have led to over 50 recommendations that address the introduction of a Taxicab Passenger's Bill of Rights, improved training, better vehicles, Ambassador Class Taxicabs, and better enforcement. These solutions will, over time, adjust the structure and culture of the industry and introduce changes that will almost immediately, substantially improve the quality of Toronto's taxicab fleet. This action will greatly diminish the risk of any taxicab serving the public and tourists, while in dangerous and unsafe condition.
This plan is developed to be sensitive to existing stakeholders and has provided for a five year transition period. Once implemented, these reforms will meet the goals of the Task Force and the expectations of the public. The result is a quality taxicab service for Toronto that will support its image as a world class city.
Date: October 7, 1998
To: Task Force to Review the Taxi Industry
From: Commissioner of Urban Planning and Development Services
This report presents an overview of the review of the Toronto Taxicab Industry as conducted by the Toronto Task Force to Review the Taxi Industry. As such, the report serves as the executive summary to the attached detailed report entitled "Report to Review the Toronto Taxi Industry", that provides the analysis to support the recommended reforms.
This executive summary addresses the extent of research and analyses conducted, describes the study methodology, provides an overview of the feedback received through deputations, submissions and workshops, and describes the conclusions and recommendations for reforms to the taxi industry.
Funding Sources, Financial Implications and Impact Statement:
There are operating cost implications to Toronto Licensing due to changes in administrative procedures and resources that result from this study. Specifically, a requirement for ten additional enforcement staff is identified and requires an increase in the amount of approximately $800,000.00 for staff and equipment, in Toronto Licensing's 1999 operating budget. Once these recommendations are implemented, it is expected that the quality of the taxicab industry will improve and demand for enforcement will decline. Other implications related to increased training and complaints handling requirements will become evident as the recommendations are implemented and will impact future budgets in the year 2000 and beyond. It is recommended that these impacts be reported to the Emergency and Protective Services Committee and Council within six months of approval of this report.
The current practice requires Toronto Licensing to recover operating costs through annual licensing fees allocated proportionately to each industry that it regulates. The changes recommended in this report are for the benefit of taxi licensees and it is therefore recommended that any budget increase be offset by an increase to the license fees paid by taxi service licensees. Recognizing the timing of this report, the proposed improvements to the taxicab industry will be additional to the license fees 1999 taxicab license fees already approved by Council at its meeting on October 1 and 2, 1998, as contained in Clause No. 2 of Report No. 9 of the Emergency and Protective Services Committee. This approval provides for taxicab licenses to be issued for a period of eight months in 1999. Therefore, impacts on Licensing fees that result from the recommendations in this report can be incorporated into the calculations for the next license period for taxicab license.
The recommended reforms also impact the current market value of taxicab licenses, lease rates for taxicabs, and income for drivers. These changes are designed to be implemented gradually so that the impact on individuals can be appropriately managed. These changes are necessary and will serve to benefit the Toronto public and visitors and the taxi industry overall.
It is recommended that:
(1) The Task Force approve the attached Report to Review the Taxi Industry and forward it to the Emergency and Protective Services Committee and Council for approval;
(2) The recommendations for reform be approved as a package recognizing the interrelationship of all initiatives and that the all changes are necessary to improve Toronto's taxi service in accordance with the goals of the Task Force to Review the Taxi Industry;
(3) To adopt a new Taxicab Passenger Bill of Rights for all Toronto taxicabs, to be displayed on the back of the passenger seat, easily visible to passengers, to inform that Taxicab passengers have a right to:
(4) in order to implement recommendation number (3), the following steps be taken to give effect thereto;
(5) all Toronto taxicabs be equipped with a receipt machine that provides the passenger with a receipt noting the date and time of the trip, length of the trip, registered number of the taxicab, the fare charged, and the Toronto taxicab customer service telephone number;
(6) information from the receipt equipment be made available to Toronto Licensing as required, for information, training, and review purposes;
(7) Toronto Licensing adopt the easily remembered customer service number 1-877-TO-TAXIS;
(8) Toronto Licensing develop a plan respecting steps to be taken to augment the current customer complaints process with a marketing plan and resolution process and report back to Emergency and Protective Services Committee within six months to identify any impact with respect to resources to provide for:
(9) Council endorse the principle that Toronto is a world class city and that as ambassadors for a world class city, Ambassador Taxicabs must provide:
(10) Ambassador Taxicab licenses be issued to persons who:
(a) successfully complete the Advanced Ambassador Taxi training course, with access to the training program as defined by recommendations 26-30, below;
(b) operate a vehicle that by year is one model old at the time it enters service as taxicab and that is replaced at the end of its fifth model year;
(11) Ambassador Taxicab licenses shall be issued to eligible person as defined in a rate not to exceed 300 licenses annually;
(12) A vehicle that is converted to natural gas or a taxicab meeting criteria for barrier free accessibility may be eligible for a two-year extension;
(13) Ambassador Taxicab licenses shall:
(a) be driven by the License holder;
(b) not be transferred;
(c) not be leased;
(d) entitle the Taxicab to display a distinguishable Ambassador Taxicab insignia, including a decal and vehicle stripe, visible to potential passengers;
(e) entitle the Taxicab to pick-up passengers at Pearson International Airport, if agreements can be reached with the Greater Toronto Airports Authority;
(14) the existing 3,480 taxicab licenses be grandfathered and the characteristics of the standard taxicab licenses (Standard Licenses) include:
(a) transferability of Standard Licenses as currently provided for under By-law 20-85 for a period of two years;
(b) after two years, Standard Licenses may be transferred only to persons holding a valid Toronto taxicab drivers license who may:
(c) leasing of taxicabs as currently provided for under By-law 20-85 is continued, with the following amendments:
(d) all Standard License owners must participate in the industry by:
(e) a taxicab operating with a Standard License may be designated as an Ambassador Class Taxicab where the Standard License holder:
(15) A taxicab operating with a Standard License that is designated as an Ambassador Taxicab ("Designated Ambassador Cab"):
(a) shall be driven by the License holder;
(b) shall not be transferred;
(c) shall not be leased;
(d) shall entitle the Taxicab to display a distinguishable Ambassador Taxicab insignia, including a decal and vehicle stripe, visible to potential passengers;
(e) shall entitle the Taxicab to pick-up passengers at Pearson International Airport, if agreements can be reached with the Greater Toronto Airports Authority;
(16) A Designated Ambassador Cab may abandon its Ambassador Cab Designation, and continue to operate as a Standard Licensed Taxicab;
(17) Toronto Licensing investigate with the Ministry of Municipal Affairs and Housing of the Province of Ontario, the possibility for the City of Toronto to set limits on lease rates and instituting conditions for lease cancellations;
(18) Council endorse the concept of self-management and work to create the conditions which will permit it to be implemented over time;
(19) Council endorse the continuation of the Taxicab Advisory Committee (TAC);
(20) The TAC be structured in such a way to develop the industry capacity for self-management;
(21) The structure be amended to include: elected representation from taxi drivers, elected representation from taxicab license owners, elected representation from industry managers including designated agents and brokerages; and that there be ex-officio representatives of Toronto Licensing, the Board of Trade, the Hotel and Restaurant Association, the Province of Ontario, the proposed Greater Toronto Services Board, and the Greater Toronto Marketing Association;
(22) The mandate of the TAC include:
(23) the Chief Administrative Officer (CAO) address industry self-management and the issues identified in recommendations 20-21 above, in the development of the terms of reference for the Taxicab Advisory Committee;
(24) Toronto Licensing develop and provide a five-day, taxicab license owner and designated agents certification course that must be taken annually by all taxicab license owners and designated agents and addresses at a minimum:
(i) changes in By-law 20-85 or other relevant legislation;
(ii) Toronto tourism information;
(iii) Performance statistics respecting the taxicab industry;
(iv) Workshop to discuss potential improvements to the taxicab industry;
(25) Toronto Licensing develop and provide a three-day, taxicab driver retraining program that must be taken every two years by all taxicab drivers that addresses at a minimum:
(i) changes in By-law 20-85 or other relevant legislation;
(ii) Toronto tourism information;
(iii) Performance statistics respecting the taxicab industry;
(iv) Workshop to discuss potential improvements to the taxicab industry;
(v) Defensive and rough weather driving skills including an in-car driving test;
(vi) Customer service skills;
(26) Toronto Licensing, in accordance with City procedures, prepare terms of reference to contract out to colleges or other appropriate training institutions, the development and provision of an up to three-month, advanced driver training program for the new Ambassador Taxicabs, that addresses at a minimum:
(i) Toronto tourism;
(ii) Importance of taxicab drivers to serve as ambassadors to Toronto;
(iii) By-law 20-85 and other relevant legislation;
(iv) Toronto geography and road network;
(v) Taxicab meter/trip records;
(vi) Services for passengers with disabilities;
(vii) Communications and professionalism;
(viii) Cultural and gender sensitivity;
(ix) Passenger and driver safety;
(x) Financial planning;
(xi) Small business practices;
(xii) CPR and first aid;
(xiii) Defensive and rough weather driving skills including in-car testing;
(27) Toronto Licensing in consultation with the City Solicitor, report to the Emergency and Protective Services Committee on the necessary amendments to the By-law to change the purpose of the current drivers list and owners list to a mechanism to determine who has access to the advanced Ambassador Class training for the purposes of obtaining a license;
(28) Access to the Ambassador Class training program for the purpose of obtaining a license, should continue at ratio one to one from the owners list and drivers list, as currently provided for in the By-law;
(29) When an individual's name reaches the top of the list, they may:
(i) Elect to take the training;
(ii) Defer their training under the following provisions:
(30) Drivers and owners from the current list who take the course and do not pass, be given one opportunity to add their name to the bottom of the list and retake the training program;
(31) Ambassador Class Taxicab licensees must provide a vehicle that by year, is one model year old and must be replaced by five model years old as defined in the description of motor vehicle portion of the current Ontario Ministry of Transportation and Communications passenger motor vehicle permit for any vehicle;
(32) Grandfathered licensees by the year 2003, provide a vehicle that by year, is one model year old and must be replaced by five model years old as defined in the description of motor vehicle portion of the current Ontario Ministry of Transportation and Communications passenger motor vehicle permit for any vehicle (1999 model or newer) and that the upgrade in vehicle quality be phased-in as follows:
(i) In the year 1999, no motor vehicle that, by model year, is more than eight years old shall be used as a taxicab by the time of the second mechanical inspection of such taxicab (1992 model or newer); and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than three years old;
(ii) In the year 2000, no motor vehicle that, by model year, is more than seven years old shall be used as a taxicab by the time of the second mechanical inspection of such taxicab (1994 model or newer); and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(iii) In the year 2001, no motor vehicle that, by model year, is more than six years old shall be used as a taxicab by the time of the second mechanical inspection of such taxicab (1996 model or newer); and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(iv) In the year 2002, no motor vehicle that, by model year, is more than five years old shall be used as a taxicab by the time of the second mechanical inspection of such taxicab (1998 model or newer); and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than two years old;
(v) In the year 2003, no motor vehicle that, by model year, is more than five years old shall be used as a taxicab by the time of the second mechanical inspection of such taxicab (1999 model or newer); and no motor vehicle used as a taxicab may be replaced by a motor vehicle that, by model year, is more than one year old;
(vi) a vehicle that is converted to natural gas or a taxicab converted for barrier-free accessibility is subject to a two-year extension to the retirement date;
(33) Toronto Licensing increase the commitment to enforcement of the taxicab industry by 25 per cent, requiring additional enforcement staff of ten full-time equivalents;
(34) The appropriate adjustment for staff and equipment, reported by Licensing to be $800,000.00, be made to the 1999 operating Licensing budget submission and the increase in license fees be calculated for the next license renewal period;
(35) The Commissioner of Urban Planning and Development Services report to the Emergency and Protective Services Committee and Council on the resource and budget implications respecting other recommendations in this report related to training requirements and the customer complaints process;
(36) Toronto Licensing in consultation with the City Solicitor report to the Emergency and Protective Services Committee, on recommendations for changes to By-law 20-85 or other legislation to enhance enforcement of licensing By-law offences within the taxicab industry;
(37) Toronto Licensing, in cooperation with the Ministry of Transportation of the Province of Ontario, develop and seek appropriate approval for a coordinated taxicab license identification program to provide:
(i) Ontario license plates attached to taxicabs identified as such by a vertical "TAXI" wordmark that clearly identifies the vehicle as a taxicab;
(ii) a coordinated numbering system that provides for matching numbers for Ontario License plates and Toronto taxicab plates;
(38) Toronto Licensing investigate the possibility of identifying limousines by a vertical "LIVERY" wordmark on the Ontario license plate that clearly identifies the vehicle as a limousine;
(39) Toronto Licensing work with the Ministry of Transportation of the Province of Ontario to develop an inspection program to provide regular taxicab safety blitzes;
(40) The Taxicab Advisory Committee and Toronto Licensing work with the Toronto hotel industry to develop guidelines to ensure that hotel doormen hail only Toronto licensed taxicabs for guests;
(41) Toronto Licensing work with the Ministry of Municipal Affairs and Housing of the Province of Ontario to seek amendments to the Municipal Act to remove the exemption for non-Toronto, Airport plated taxicabs and limousines that currently permits them to pick up fares within the boundaries of the City of Toronto;
(42) Toronto Licensing enter into discussions with the Greater Toronto Airports Authority to explore initiatives that would allow Toronto Ambassador Class Taxicabs to pick up passengers from Pearson International Airport;
(43) Toronto Licensing in consultation with the City Solicitor seek to amend By-law 20-85, to license designated agents as managers, subject to duties and obligations to be developed by Toronto Licensing;
(44) This report be referred to the Licensing Commission (Licensing Tribunal) for information;
(45) In the interest of public safety, the City Solicitor and Toronto Licensing staff report to the Emergency and Protective Services Committee on possible By-law amendments to limit the number of hours that taxicab drivers can drive a cab to a maximum of 60 hours over seven consecutive days and also to require taxicab drivers to maintain a daily log, documenting hours worked, that must be provided to Toronto Licensing for review upon request;
(46) Toronto Licensing in consultation with the City Solicitor amend the By-law to provide for an evening surcharge, in the amount of $2.00 per trip, be introduced between the hours of 9:00 p.m. to 6:00 a.m.;
(47) Toronto Licensing discuss the possibility of amending the Municipal Act with the Ministry of Municipal Affairs and Housing of the Province of Ontario to allow for the introduction of minimum penalties for offences under By-law 20-85, and report back to the Emergency and Protection Services Committee on actions that can be taken;
(48) Toronto Licensing develop an implementation plan that defines the schedule for change and includes:
(i) Implementation and management plan for each recommendation requiring action by Toronto Licensing;
(ii) provisions for performance review to measure the success of these initiatives;
(iii) a communications plan to inform stakeholders of the reforms and the status of implementation;
(49) this report be referred to the City Solicitor for the purpose of developing specific instructions to amend By-law 20-85, as required by these recommendations; and
(50) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.
At its meeting on April 16, 1998, by adoption of Clause No. 2 of Report No. 3 of the Emergency and Protective Services Committee, Council established a Task Force to Review the Taxi Industry. The creation of this Task Force was the culmination of a number of recent articles in the media and the concerns expressed by the public, taxicab owners and drivers, Toronto Licensing, the Board of Trade and the tourism industry respecting the state of the taxi industry in Toronto.
These concerns include:
Council approved the following guiding principles for the Task Force:
At its meeting on May 11, 1998, the Task Force to Review the Taxi Industry adopted the report entitled "Work Plan for the Task Force". The report described the resources, tasks and timelines involved in reviewing the Toronto taxi industry, consulting with stakeholders, and developing recommendations. The work plan consists of three phases, namely: research and scoping of issues, analysis and consultation, and report and recommendations.
At its meeting on June 22, 1998, the Task Force adopted the report entitled "Status of the Review of the Toronto Taxi Industry" for information. The report provided a summary of the deputations received from stakeholders and presented the status of the review of the taxicab industry, including an overview of issues and a summary of possible solutions. It addressed the structure for the workshops held on July 6, 1998, that were designed to gain feedback from various participants in the Toronto taxicab industry. The report also more clearly defined the goals of the Task Force, namely to ensure that the Toronto Taxicab industry:
Comments and/or Discussion and/or Justification:
The Toronto taxicab industry needs major improvement. Too often its passengers suffer from a ride in an inferior vehicle with poor quality service. Customer complaints are common and severe, as many passengers perceive a dilapidated taxicab as an unsafe taxicab. In too many cases, this perception may be reality: at any one time, an estimated 70 taxicabs are serving the public while in dangerous and unsafe condition. Many passengers describe an intolerable lack of comfort and a complete lack of customer service. This situation is an unacceptable, negative reflection on the image of the City of Toronto as a world class city. Taxicabs must be ambassadors for our City of Toronto.
The problems of the industry have been blamed on bad or unenforceable rules in the By-law, poor enforcement of the By-law, and to the structure and temperament of the industry itself
Overcoming these problems, and providing high quality service to the customer is the goal of the this report. The 50 recommendations are organized around five points:
1. Create a Taxicab Passenger Bill of Rights: to focus the industry on customer service;
2. Improve the Cabs: retire dilapidated cabs and replace with newer, quality vehicles;
3. Improve training: so that all people in the industry, owners and drivers, know what the public expects and have the skill to do the job;
4. Create Ambassador class cabs: to put greater pride of ownership behind the wheel; and
5. Strengthen Enforcement: to make sure it all happens.
Every recommendation is an integral part to an overall plan designed to improve the taxicab industry. It is critical to approve these recommendations as a package rather than piecemeal, as the expected positive impacts on the industry will not be realized by isolated measures. Some recommendations directly address the quality of vehicles and training requirements, while others address issues less obvious to the public such as regulations and structure of the industry.
The poor existing state of the industry has evolved over 30 years and no fair and reasonable reform can transform it into a customer-based service overnight. Countless studies in the past have not been implemented for various reasons or change has been ineffective. As a result, the industry continues to decline. In addition, many industry stakeholders are frustrated and demoralized, with customers paying the ultimate price with poor service.
There have been some heartening, isolated improvements in the industry in recent months. But we take them not as a comfort that the industry will self-improve and that no change is necessary, but rather as confirmation of how positive change can be. Efforts by the industry to participate in this process and introduce better quality vehicles for example, are applauded. It is evidence that the Toronto taxicab industry is determined to improve. This is a signal of support that the time for change is now to secure a successful and respected future for Toronto taxicab industry participants.
The proposals contained in this report will bring immediate, visible improvement to the taxi industry. In the first year alone, Torontonians would see the retirement of all cabs over eight model years old. That's approximately 50 per cent of the fleet upgraded in 1999, (1,738 taxicabs). By the year 2002, all Toronto taxicabs would be no more than five model years old. At the same time, continuous improvements in training for all drivers and owners would lead to discernible improvements in service and driver knowledge. These changes would have an immediate positive impact from the back seat view in a taxicab.
The Taxi industry is governed by the Toronto Licensing, and By-law 20-85. A taxi may not be put on the road unless it is licensed by Toronto Licensing. Similarly, no one may drive a cab except a Toronto Licensing approved driver. The holder of a cab license may:
Only about 20 per cent of owners drive their own plate. About 60 per cent of drivers hire a middleman-manager, known as a "designated agent" to operate the plate on their behalf. The remaining 20 per cent lease the plate to a driver directly, without a designated agent.
The number of taxicab licenses is strictly limited. Drivers' licences have traditionally been relatively easy to obtain. This has resulted in a relative over-supply of drivers for the number of available plates. There are well over 10,000 licensed taxi-cab drivers for the 3,480 licensed taxicabs on the road in Toronto. Cabs tend to be driven in two twelve-hour shifts, so there are roughly three drivers for every possible taxi shift.
New plates are issued based on a formula which projects demand for taxi services. Toronto Licensing maintains waiting lists for owners and drivers for new plates. At present, these two lists combined are over 2,500 names long. No new taxicab licenses have been issued since 1992, although had the model been applied from the freeze in 1993 to today, 233 new licenses would have been issued.
Drivers say that the over-supply of drivers allows owners to command "take it or leave it prices" for plate leases. Owners are quick to point out they only charge what the market will bear, and that no one is forced to remain a cab driver. Many drivers claim that that they feel compelled to continue driving even if their returns are low, because they must continue to drive to keep their name on waiting list for a new plates.
The market price of owner's licenses has grown in recent years: from $49,976.00 in 1993 to $85,000.00 in 1998. Income derived from leasing provides an annual average rate of return of 13 per cent. This is a spread of 8 per cent over the returns from standard investment options, such as Canada Savings Bonds.
The Taxicab Passenger Bill of Rights
It is apparent that it is necessary to change the culture of Toronto's Taxi Industry. The focus needs to change to customer service. This can be promoted by setting clear performance standards that the City of Toronto expects in its cabs.
The Taxicab Passenger Bill of Rights was a concept introduced in New York as part of the sweeping reforms brought to New York's cab industry. It has had a major effect in refocusing industry priorities and in raising consumer expectations. This report recommends the adoption of the New York Bill of Rights with minor amendments: for example, as much emphasis is put on heating as on air conditioning, given the realities of the Toronto winter.
It is believed that the Bill of Rights will be the benchmark against which developments in the industry will be tested. In that sense, it is the centrepiece of the report. All the other recommendations serve as a means of giving effect to the service standards contained within it.
There are not as many new cabs on the road as there used to be. In 1982 over 80 per cent of cabs were less than three years old. Now, only 20 per cent of Toronto's cabs are less than three years old.
Similarly, the retirement age of cabs is getting older. Until 1992, all cabs were retired at the end of their sixth model year. Many argued that if age extensions were permitted, then the fleet would be improved because owners would put better cars on the road. In reality, it did not work that way. In 1998, over 50 per cent of the cabs are over eight years old and maintenance violations have gone up since 1992.
On average, 2 per cent of vehicles fail their scheduled inspections and are found to be "dangerous and unsafe" That figure translates to roughly 70 taxicabs.
Of greater concern, in a recent spot check performed by Toronto Licensing, 14 out of 21 cabs inspected were removed from service as "dangerous and unsafe". Clearly, there is a problem of vehicle quality that must be addressed.
At present, cabs may be no more than three years old when they enter service, and are retired at the end of six years. They are eligible for age extensions beyond six years, however, when they can pass a mechanical inspection.
The report recommends that taxicabs be no more than one model year old when they come into service and that they be retired at the end of their fifth model year. It is recommended that these new age restrictions be phased in over five years. It is also recommended that age extensions be made available for two years where the vehicle has been fitted for natural gas or for provided handicapped accessibility features. No other extensions shall be offered.
The skills of the driver are as important as the vehicle in providing a safe and comfortable trip for the consumer. It is believed that it is necessary to make sure that drivers have the skills necessary to provide exceptional customer service.
Toronto Licensing has recently adopted a three-week training course for drivers, but the overwhelming majority of license holders got their license before it was instituted. They obtained their license on the basis of a three day course. While on-the-job training has been their classroom, there are changes in the industry that require on-going training.
Accordingly, the report recommends that all drivers take three-day refresher course every two years. The course would cover changes in the By-law, developments in tourism, defensive driving and customer service. It is also recommended that drivers who fail the current three-day course be required to take the current three-week course to maintain their license.
Training is not only important for drivers. Owners and designated agents also need to maintain their skills, particularly given how many owners are not active in the industry on a day-to-day basis. Accordingly, an annual five-day course is proposed for all owners and designated agents.
Ambassador Class Taxicabs
The issuing of new taxicab plates is probably the most controversial aspect of the industry. The limit on plates creates a closed market. The number of cab licenses determines how many ways Toronto's Taxi "pie gets sliced". Adding new plates adds new mouths to feed, so industry concern over new plates is understandable.
The matter should also be of concern to the City. The issuance of new licenses should not merely grow the industry, but also grow it in a way that promotes the health of the industry.
The report makes two key recommendations:
The first relates to how we issue plates. The second relates to the characteristics of the new plates. Together, the recommendations are designed to ensure that new entrants to the taxi industry will offer a high quality service that we will be proud to have as Ambassadors for Toronto.
First: how we issue new plates. This report recommends that over time, the city should move away from the existing system whereby an economic model determines when new plates should be issued.
Instead, the city should draw from the London, England model, whereby new participants may enter the industry after making an investment in customer service. In London, this investment takes the form of passing a notoriously difficult test - an investment of about two years of the applicant's time. A two year course does not appear to be necessary in Toronto's case: the City is simply not that complicated. Nevertheless, there needs to be a legitimate barrier to entry to prevent the market from being flooded with cabs.
This report recommends that the barrier should not be absolute, as at present, but rather permeable: The City should facilitate individuals who want to make the necessary investment to get into the industry.
Secondly, the barrier should promote the health of the industry by leading to a positive investment in the skills and tools of the prospective cab driver.
Accordingly, two components are recommended.
Initially, it is recommended that licences be issued on this basis to a maximum of 300 licences per year. Over time, however, it is recommended that numeric limits be abandoned in favour of the modified London model.
The second recommendation relates to the characteristics of taxicab licenses. The problem with issuing new licenses of the existing kind is that it provides an economic windfall to the recipient, with no corresponding benefit to the public. The plate is issued at a cost of roughly $6,000.00, but soon is saleable at a market value approaching $85,000.00-$90,000.00. Furthermore, the right to lease the plate means that the new owner may soon cease directly serving the public.
Analysis reveals that owner-drivers are the least likely drivers to have complaints made against them for poor vehicle maintenance or bad service. This is attributed to two factors. First, an owner-driver is his or her own boss, and operates without the burden of lease costs or other layers of management. With fewer expenses to pay, the owner driver has more money to channel into vehicle maintenance. Secondly, it appears that the positive influence of pride of ownership translates into better cars and a more consistent, higher level of customer service.
Unfortunately, the number of owner-drivers is in decline. While they made up the majority of the industry in the 1970's, today they make up about 20 per cent of cab drivers. The recommendations in this report promote the existence of the owner-driver in the industry, is to promote the industry itself.
Accordingly, this report recommends that all new plates be issued with the following stipulations:
This would ensure that new plate owners would be owner-drivers.
Existing plates would be grandfathered under current regulations, with one exception: After two years from implementation, plates could only be sold to purchasers with a valid taxi driver's licence.
Experience in the taxi industry has shown that vigorous enforcement is necessary to uphold the provisions of the By-law. This report recommends that action be taken to ensure that the public interest is upheld.
First, it is recommended that amendments be made to the By-law and to the Municipal Act to allow for more aggressive enforcement. For example, in order to charge an unlicensed taxicab, enforcement officers must witness money change hands. Passengers are often understandably reluctant to serve as a witness and attend a hearing. As a result, it is often impossible to successfully prosecute an offence when it is caught by enforcement staff. This requirement often renders the offence effectively unenforceable. Enforcement problems are exacerbated by the requirement that the Commission must base any penalty on their judgement whether the individual will offend in the future. Further, the Municipal Act does not currently provide for the institution of minimum penalties for guilty offences. All of these factors make vigorous enforcement a challenge. The report makes specific recommendations for amendments that will enhance the ability of the City to enforce the By-law.
Secondly, the report recommends that more resources be put into enforcement. There has been an overall decrease in enforcement resources for the taxicab industry caused by staff reductions and workload increase. This facilitates a culture that openly contravenes the By-law. Many participants choose to offend as the risk of penalty is limited. The report recommends that ten new enforcement officers be hired to increase enforcement activity in the industry.
Finally, it is believed that in the future, the industry should take a greater role in managing itself. It is recommended that the Taxi Advisory Committee be reconstituted as an elected body, with a mandate to work with Toronto Licensing to develop ways and means of achieving greater industry self-management over the next five years.
The simple issuance of more licenses will not improve the quality of the industry to the degree necessary. It may be argued that the improvement to vehicle quality and driver training is all that is required. It is more likely, however, that the existing structure, even with additional plates, will lead to an eventual absence of owner-drivers and a continued decline in customer service. The challenge is to propose a solution that improves quality for passengers and provides fair returns for drivers and owners within a regulatory structure that works effectively. We believe that this plan meets the challenge.
While this report is critical of many practices common in the industry, the criticisms do not apply to everyone in it. There are many individuals - owners, drivers and designated agents - who have impressed us by their commitment to good business and good customer service. We believe that they, their peers and their customers know who they are, and we applaud them for maintaining high standards in an often frustrating system.
The real message of this report is that taxicabs are ambassadors to our visitors and residents. We must impose high expectations on the taxicab industry to leave a positive impression on the City of Toronto. This can only be achieved if all stakeholders work together towards this common goal.
Virginia M. West
Commissioner of Urban Planning and Development Services
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