THE BOARD OF TRADE
of Metropolitan Toronto
Contact: Marion Joppe
School of Hospitality & Tourism
Ryerson Polytechnic University
350 Victoria Street
Canada M5B 2K3
Board of Trade of Metropolitan Toronto Tourism Committee
February 11, 1997
This report was commissioned for review by The Board of Trade of Metropolitan Toronto. The contents reflect the opinions of the author and are not representative of the Membership of The Board of Trade. The Board will study the findings of this report and announce its recommendations in approximately four weeks.
For further information please contact the author.
Table of Contents
Part I: Current Situation
Part II: Current Developments and Comparable Approaches
Part lll: Options for Upgrading the Service Quality of Taxi Drivers
List of lnterviews and Focus Group Members
The Tourism Committee of the Metropolitan Board of Trade has been concerned over the role - or lack thereof - that the taxicab industry has been playing in Toronto’s tourism industry. The quality of some of the cars and the attitudes of some of the drivers have deterred from the generally positive image both visitors and residents have of the Metro Toronto area.
Other jurisdictions, in Canada and elsewhere, confronted with similar challenges, have introduced various types of taxi driver training programs, at least part of which tend to focus on the tourism industry and regional tourist attractions. These programs have generally been well received by the taxi and tourism industries as well as other interested parties, such as police officials, municipal councillors, insurance companies, etc.
As a result, the Tourism Committee of the Metropolitan Board of Trade has commissioned this study to provide a better understanding of the current situation in the taxi industry, its structure and regulatory environment, as well as obstacles and opportunities that might exist to introducing an upgraded driver training program.
Part I of this study provides an historic overview as well as a description of the current situation with respect to the structure of the industry and its impact on the financial realities of both owners and drivers, and the regulatory framework underpinning quality issues.
Part II deals with current developments both in Metro Toronto and elsewhere with respect to the structure of the industry and approaches to upgrading the service quality of the drivers.
Part III provides options for consideration as to how the taxi and the tourism industries could collaborate in order to achieve what is ultimately a common goal of improving the training of drivers and making the taxi industry a more effective part of the tourism industry.
License: only two types issued by the Metro Licensing Commission (MLC)
Plate: the metal plate with a number attached to the vehicle
Taxicab: a vehicle with a plate approved by the MLC to operate as a taxicab
Lease: a contractual arrangement to operate a taxicab plate in accordance with the Bylaw. It is usually registered with the MLC
Agent: a cab owner will authorize an agent to act on his/her behalf, to oversee the operation of the plate. An agent has the authority to enter into various forms of lease or other working arrangements.
In 1953, 13 area municipalities were amalgamated to form Metro Toronto. At the same time, the Metro Licensing Commission (MLC) was created and control of licensing passed to this body which was given all the powers and responsibilities of a police services board. Over 1500 taxi owner licenses were issued to "owners of record, that is to say all those that existed prior to the creation of Metro Toronto, by the MLC, but these licenses had no sale value.The MLC did not issue any new owner’s licenses until 1961. Between 1961 and 1968 only drivers could obtain an owner’s license.
A major change in policy occurred in 1963 when the MLC allowed the cab license to acquire a value and its sale on the open market, Pursuant to a bylaw, a list of taxi drivers wishing to acquire a cab license was established. In 1968 an additional three types of owners lists based on the number of taxis already owned (1 license, 2-9 licenses, and 10 licenses or more) was set up. New issues occurred in a proportion of 50:20:20:10. By 1975, the number of owner licenses had increased to 2100.
Probably the most significant change in policy, and perhaps the source of much of today’s perceived problems in the Toronto taxi industry, occurred in 1974 when the MLC permitted the leasing of taxi owners licenses. According to the Bylaw, the owner must provide a car that is fully equipped and licensed as a taxi cab, maintained and insured with the cab owner plate. This basically introduced an additional tier of middlemen between owners (or their designated agents) and the drivers, but also the notion that a car had to be registered in the owner’s name in spite of having been purchased by the driver.
As a result of the Lastman Report, another shift in policy occurred in 1976: the driver training program operated by the MLC became more comprehensive; the Taxicab Advisory Committee was formally established; and the fleet owners list was abolished. All cab owners having 3 cab licenses or Iess were combined into one list, and the new ratio of cab licenses to owners and drivers became 1:9.
In 1985 the ratio was again changed back to the previous 1:1 owners to drivers. By 1996, a total of about 3400 cab owner licenses had been issued, of which 2200 were to owners of 1 to 2 cab licenses and 1400 were to fleet owners.
After having driven full-time for 3 years, a driver is eligible to apply to be placed on the drivers list. In order to qualify, s/he must continue to drive full-time for an average of an additional 12 years before being issued an owner's license. Upon being issued an owner’s license, the driver must comply with all aspects of the Bylaw, included full-time driving, for a 5 year probation period. At the end of this probation period, the driver can then lease or sell his/her license.
The average waiting time for someone on the owner's list to be issued a license is 25 years plus a 5 year probationary period during which time the issues must personally manage the license. This is not the case if the person purchased the license. Indeed, the purchaser is not required to have had or have any involvement with the taxi industry.
Until the early 70’s, one company (Airline Limousine) had exclusive right to pick up passengers at Pearson Airport; taxis were only allowed to drop off passengers. When the monopoly was broken up, airport pick-ups became a free-for-all until a system of "convenience licensing" was developed between the federal government responsible for the Airport and the City of Mississauga in 1976.
The Government Airport Concession Regulation (GACOR Permit) allowed for the establishment of a "dedicated" airport fleet made up of over 300 limousines and 335 "dual plated" taxis, since it is a pre-requisite to possess a municipal permit. Only 78 taxis have Toronto licenses, even though almost 70% of the arrivals at the Airport are destined for Metro Toronto. All limousines carry Mississauga licenses, and all other taxis are licensed by communities as far away as Fenelon Falls.
Taxis without a GACOR Permit are, however, allowed to pick up passengers where this has been pre-arranged, and for a "gate.fee" of $7.50.
Taxis licensed by the MLC have also lost much of the airport drop-off business, particularly emanating from the hotels. Although only livery cabs (commonly referred to as limousines) are licensed by the MLC and are not allowed to pick-up passengers except by pre-arrangement, it has become common practice for hotel employees to call on the waiting limousines for a pay-off of on average $7-8 (illegal under Section 49 of Schedule 8 to Bylaw 20-85), while taxis must wait their turn on the taxi stands. The MLC has shown no interest in enforcing its regulations in this regard.
The Metro Licensing Commission is currently made up of three Metro Toronto councillors (Moscoe, Kinahan and DiGiovanni) and four Council appointed citizens (Shan, Shimsky, Thomas, and Archibald-chair), and administered by a General Manager (Ruddell-Foster). An industry advisory group, the Taxi Advisory Committee, ostensibly provides an industry perspective for policy development, but does not appear to have much influence.
The four major aspects of the taxi industry regulated by Bylaw 20-85, whose enforcement and amendment has been delegated by Metro Council to the MLC, are entry, ownership, service and fares. The first two are dealt with under the heading "Working Arrangements", while the third one is discussed under "Service and Quality Regulation". A discussion of fares is for the most part beyond the scope of this study.
Over the years, the MLC has amalgamated legislative, judicial and enforcement powers under its umbrella, essentially eliminated a more democratic approach of checks and balances. When the MLC acts as a tribunal, the only recourse available to anyone disagreeing with a decision made by the MLC is to appeal to the courts, a lengthy and costly procedure for all concerned.
Until 1996, the powers with respect to licensing of businesses were tightly controlled, Bill 26, however, has given a broad range of powers to municipalities or has reinforced existing ones. Section 257.2 specifically gives the power to grant, refuse, revoke or suspend a license; to define classes of businesses and to separately license, regulate and govern each class with the corollary of imposing special conditions on a business in a given class as a requirement of obtaining, continuing to hold or renewing a license of a business without any expectation that the same condition apply to all businesses.
Since Metro Toronto's Council Bylaw 20-85, which is administered by the MLC, prohibits the lease of a "plate only", various schemes of working arrangements between owners and drivers have evolved to conform to the Bylaw while allowing the entrepreneurial spirit to generate a profit:
lease. single/multiple cab owners enter directly into lease agreements with drivers or other owners where only the MLC license plate is attached to a vehicle owned by the lessee (even though the vehicle is registered in the name of the owner);
The poor driving record of many taxi drivers, particularly less seasoned ones, lead to almost exorbitant insurance rates, thus increasing the overall cost to the driver significantly.
After allowing the sale of owner’s plates for the first time in 1963 for market value, the MLC quickly realized its mistake, and has made several attempts to revert the situation it had created, most notably by trying to flood the market with additional plates to bring down their value. The option of reducing the under-trained supply of drivers, and thus demand for leasing or purchasing these plates, had not been considered.
When sales were first allowed, a vendor netted about $2000 for a taxicab, but prices escalated rapidly over the years. After peaking at about $95,000 in 1988, prices dropped to about $70,000 in 1992 and have slowly been increasing since. The current price for an owner's plate is about $80,000. (For comparison purposes, GACOR permits sell at about $75,000 for a taxi and $150,000 for a limousine.)
Upon the death of a taxi owner, the license has to be transferred within one year to the estate or another party. Thus, numerous beneficiaries are licensed as taxi owners without having previously been involved in the industry. In these instances, the taxi license is deemed to have an established value and is included in the assets of the estate.
According to the MLC (and confirmed through interviews with drivers, lessees, designated agents, and owners), the going rate for a taxicab owner's licence is $632/mo. if managed by a designated agent and $774/mo. for a lease. Where the plate has both a designated agent and a lessee, the lessee pays the agent, who subtracts his payment from the money provided to the owner (eg. $774 lease -$632 paid to the owner for a monthly fee of $142 for the agent). Maximum rates can be as high $1200-$1400/month.
Lessees pay all costs associated with the purchase and maintenance of the car, gas, insurance, and brokerage fees. In some cases, the car must be purchased from the agent who controls the plate. The agent may also work for a taxicab brokerage, and in this case, the lessee is required to have the car painted to the brokerage’s specifications and abide by its rules. In spite of all these costs incurred, the lease can be cancelled at any time on seven days notice, as is stipulated in Bylaw 20-85.
While it is difficult to approximate a driver's income, s/he can be expected to earn $150-200/shift in gross revenue or anywhere from $300-700/week, depending to a large extent on experience and working arrangement.
Bylaw 20-85 regulates vehicle standard as well as the appearance and conduct of drivers, both of which are of great concern to the tourism industry and are often viewed as lacking by the public in general.
With respect to the vehicles, the Bylaw stipulates that they must be free of mechanical defects, clean and in good repair as to its exterior and interior (Section 20). To that end, inspections are conducted three times a year. However, it is often the age of the taxicab that is the real issue. While a vehicle that is being approved as a taxicab for the first time cannot be more than two model years old, and six years is ostensibly the longest that the cab can be driven, age extensions are routinely given as long as the vehicle is free of mechanical deficits. Thus, 10-12 year old vehicles are not uncommon.
While Section 95 of Schedule 8 to Bylaw 20-85 stipulates that livery cab drivers must wear a uniform approved by the MLC, cab drivers are merely expected to be properly dressed, neat and clean in his person, and be civil and well-behaved (Section 52). Section 2 also requires every driver to be able to speak, read and write the English language.
Until the new training program was introduced towards the end of 1996, new taxi drivers received a 4.5 day exposure to the basics of the Bylaw requirements, urban geography, personal hygiene and customer service. And although all brokerages seem to have internal disciplinary procedures for dealing with drivers who violate the rules or exhibit poor customer service, the problem has become fairly endemic. Also, no attempt seems to have been made to define a minimum standard for English language capabilities.
The taxi industry has been calling for a substantially upgraded driver training program for many years. In 1985, George Brown College offered to deliver a comprehensive driver training course (9 modules of approximately 30 hours each), but the MLC chose not to pursue it. In 1990, the Metro Council Legislation and Licensing Committee called for the establishment of a Task Force to review the taxicab driver training school program. Recommendation included pre-testing for English (the Legal Department did not believe that the MLC had the authority to do so); 2-year Ontario driving experience (seen as discriminatory); completion of an approved defensive driving program (seen as too expensive); emphasis on driver attitude and appearance (some material from the New York Taxicab Driving Training Course were included in the appropriate module); enhancement of the geography section (not carried out due to automated examination marking system); and the review of the issues of dress codes, appearance, passenger relations and professionalism (no action deemed necessary by the MLC).
A new MLC training program was finally implemented in October 1996. Three weeks in duration, it has a much stronger focus on some of these elements, including also special modules on handicapped or elderly customers and some basic knowledge about tourism attractions. The MLC, as a disciplinary tool, has started to send drivers convicted of offenses under the Bylaw back to take the appropriate training module(s).
Since the development of the Bylaw dealing with taxicabs has been developed piecemeal over the past 40 years and more, and the last major change occurred in 1985, Metro Council recognized as far back as 1989 that there were significant problems with the existing Bylaw, and that a number of its provisions were completely out of date. Thus it called for a paper on the underlying structure of the taxicab industry preparatory to a review of Bylaw 20-85. The report written by former Metro Solicitor George Rust d’Eye was never made public.
In 1992, the Grant Report again recommended a comprehensive review of the philosophy and purposes underlying Bylaw 20-85, and in November 1993 the MLC set up a Bylaw Review Committee. Originally, it included 3 members from the Taxicab Advisory Committee, but these industry representatives were removed prior to the release of the draft report. After numerous deputations and public meetings, the recommendations of the Committee were put forward to the Human Services Committee of Metro Toronto Council on January 6, 1997 in a report entitled Taxicab Leasing and Related Matters.
The report’s recommendations proved to be very controversial. The Human Services Committee in its January 6, 1997 meeting made the following recommendations to Council:
Unfortunately, the MLC asked Council to refer the entire report back to it for further study, arguing that it represented a "package" that should not be split up.
Thus, even though the Toronto Taxi Alliance (TTA), composed of taxi owners, designated agents, fleet operators, independents and brokerages, supported reducing the age for taxicabs, no progress was made even on this issue. Interestingly enough, the TTA had also argued for retraining of drivers that have not had the benefit of the new MLC training course. It called for the establishment of an on-going driver re-training program as part of enhancing the quality service provided to the public. Neither this recommendation nor its request to better publicize the "compliments/complaint number" were retained by the Bylaw Review Committee.
The fact that the whole report is being worked on further, provides the Board of Trade's Tourism Committee with a unique opportunity to argue for the inclusion of some of its priorities with respect to the quality of cabs and drivers.
Although in theory the MLC is accountable to Metro Council, it seems to have enjoyed a significant amount of freedom in developing its own policies, commissioning their own reviews of their workings and premises, and indeed seem to have delayed action on numerous occasions on instructions issued by Metro Council. The fact that the Commission is made up of part-time personnel with no background in licensing activities appears to have compounded the problem.
Councillor Dennis Fotinos submitted a report on June 10, 1996 on the concerns of the taxicab industry to the Human Services Committee of Metro Toronto Council which led to the formal establishment of a Task Force on the Restructuring of the Metropolitan Licensing Commission in September. Prior to its establishment, Metro Council had already agreed to support the principle of separating the quasi-judicial function from the administration and enforcement functions of the MLC.
The current timelines for bringing this issue forward are June 1997 for public debate on the recommendations, which should include a separation of the tribunal activity from the policy aspects of the licensing Bylaw, and November 1997 for the actual restructuring of the MLC. Although the Restructuring Committee is working on certain aspects of the task, the existing political situation surrounding the megacity proposal has detracted much attention from it. The opportunity to fundamentally restructure the MLC in parallel to amalgamation should not be allowed to pass by without some significant input from a business organization such as the Board of Trade.
Although training issues are not specifically being addressed at this time, the public debate provides an opportunity for highlighting the need to strengthen the service quality of the taxi drivers.
Launched in October 1996 with the objective to produce professional taxi drivers, Toronto’s new taxicab driver training program was developed with input from a large number of taxi industry owners and operators, the taxi driver union (Steelworkers of America), the tourism industry, the disabled community and others,
The 16 day in-house course includes a full day of first aid geared specifically to issues in the industry such as intoxicated customers; stress management; sensitivity training in dealing with the disabled; multi-cultural sensitivity; and a tourism module that provides basic facts and figures about the tourism industry, the taxi driver’s role and contribution to that industry and slides to help drivers visually identify Toronto's most important buildings and attractions.
The cost of about $800/person is paid by the driver for $400 and the remainder is subsidized through the licensing fees. About 35 students take the course simultaneously, but only about 50% are expected to pass the exam on their first try. Unsuccessful candidates have the opportunity to retake the exam.
Unfortunately, the MLC decided not to require pre-testing in English skills based on the advice of the Metro Solicitor, but believes that the course material and the cost of the program would eliminate anyone whose English is insufficient.
Since May 1994, anyone applying for a taxi license in the major urban centres of Quebec is required to take a professional training course. This course lasts 60 hours and covers legal considerations, professional and ethical relations, health and safety, taxi and equipment, transporting the disabled, management concepts, and knowledge of area. This basic course can be expanded upon by more detailed training on knowledge of the area prescribed by regional authorities. To this end, the Urban Community of Montreal requires and additional 90 hours of training on knowledge of its area.
A second program is aimed at providing professional development for experienced drivers. Launched in May 1995, the Taxi Ambassador Program consists of two modules of a day each: the first is a customer service program delivered by the Road Transport Training Centre of the Saint-Jerome School Board, while the second is delivered by the Tourism Office of the respective municipality since it focusses on regional tourism attractions.
Heavily subsidized by the Societe quebecoise de developpement de la main-d’oeuvre, and developed in conjunction with the Ministries for Transportation and Tourism, the Bureau du Taxi (licensing commission), the taxi and tourism industries, the cost of each module is minimal at $15. There are no exams, but a certificate is delivered to active participants only.
Basic taxi driver training is a five week program in Quebec, to which the first module has been added. For all other drivers, attending the modules is voluntary. However, a growing number of contracts demand the certification. For example, the Montreal Airport Authority and the Casino both require the training of taxi drivers who wish to serve their clientele.
In addition to receiving a program diploma and pin, the drivers receive a work permit on which their Taxi Ambassador accreditation is highlighted. Furthermore, their names are added to a list kept by the Visitor and Convention Bureau, which also indicates their (foreign) language capabilities, and the availability of drivers with this special accreditation is listed in official documents. Taxi Ambassadors are also routinely invited to season opening events, site visits, and openings.
In Montreal, the program was first used in the context of the World Road Congress to transport dignitaries. This first-time initiative in which customized services were offered to organizers of a major convention, placing at their disposal experienced taxi drivers who had undergone training and were driving high quality vehicles equipped with a dome light bearing the logo of the Congress and the Taxi Ambassador program, proved highly successful.
For comparison purposes, there are 4500 taxis and 9000 drivers in Montreal. Plates can be purchased at a market rate of $55,000 and leasing is not allowed.
Until recently, would-be taxi drivers in the Greater Vancouver Area only had to have a class II (commercial vehicle) driver's license and comply with the standards set up by the insurance industry. Any taxi industry specific training was done by the taxi companies themselves. This void in training has been filled by the Taxihost Program, the first of its kind in Canada.
Consisting of four levels, the program takes drivers from a basic level to a tour guide specialization. The first level has been made mandatory for all licensed drivers, who have until June 1997 to pass the exam, either by taking the course or by challenging its different modules. Grade 8 English or its equivalent is a requirement for entry into the course.
Level I "Driver" consists 12 hours of instruction in local knowledge and knowledge of the taxi industry, working with a mapbook and sensitivity training to disabled customers. 6 hours are spent on video-based defensive driving skills. Lastly, the "Superhost" program was adapted to the specific needs of the taxi industry for 9 hours. Each aspect of the training can be challenged: through an exam, having taken the Canada Safety Council Defensive Driving course or another Superhost program in the last twelve months. The cost for the Level I certificate is $175, including the prior assessment.
Level I was launched in March 1995 and to date 3000 drivers have taken the program. The training is delivered through the Justice Institute of B.C., which has a mandate for public safety programming, and its Pacific Traffic Education Centre.
Level II "Professional" provides 3 hours of expanded driver safety and assault avoidance, 6 hours in-car accident avoidance, a customers with disabilities module developed by the Ministry of Tourism, and a self-taught advanced geography module. Still in the developmental stage, the cost for this level is expected to be somewhat higher, in the $200-225 range.
Level III "Certified" will follow the process put in place by the Canadian Tourism Human Resource Council for certification (see below), and will include testing through an anonymous "passenger".
Level IV "Taxi Guide" will be quite independent of the other levels, insofar as it follows the standards and certification of tour guides, and includes the actual presentation of a tour by the taxi driver.
The Tourism Standards Consortium (Western Region) developed standards for taxicab driver in 1992. These formed the basis for developing the Vancouver Taxihost Program.
Since then, the Canadian Tourism Human Resource Council has been working on two fronts:
The Ontario Tourism Education Corporation (OTEC), the provincial organization that would be responsible for delivering the program in Ontario, is prepared to assist organizations in validating the modules for the respective municipality, and coordinating a funding strategy by applying for government funds as well as sponsorship.
There seems to be long-standing and very deep mutual distrust between the MLC and the taxi industry. At the same time, the relationship between the taxi and tourism industries has not been one of cooperation and respect for each other's realities and needs. Therefore, for any progress to be made, it is imperative that the three parties agree to work together in good faith, with the understanding that each one bears some of the blame for the current tensions and the state of the service quality.
Communication between the taxi and tourism industries is at an all time low, Brokerages cannot even obtain information on hotel name changes so that they can inform drivers. No information is provided to them on new openings (eg. restaurants, hotels, attractions). Information on major conferences or conventions, which would allow brokerages to put better vehicles at their disposal, can only be obtained at significant cost (approximately $1500 - MTCVA membership+ fee for information).
Even without becoming involved in the upgrading of the approximately 10,000 people that hold a taxi driver’s license, finding ways to improve the communication between the industries should contribute to a much more knowledgeable and supportive taxi industry.
Another issue that could be addressed under the heading of improved communication is the issue of the airport runs being given to limousines, in exchange for a payoff, which is seriously undermining the livelihood of the taxi drivers, and is illegal according to the bylaws.
Working with the Taxi Advisory Committee and the MLC, the criteria for an program to upgrade experienced drivers could be determined. It may well consist of a version of the Superhost Program and a second, more specialized module focussing on the regional tourism attractions and other noteworthy landmarks. Although some subsidization might be obtained through government sources, most of the cost would be paid by the drivers.
The first module could be delivered through brokerages, some of which are already doing training in this area, while the second module would require the active participation of the MTCVA and the attractions sector.
Unless there is real commitment from the tourism industry to work with the taxi drivers that have completed the whole training program, there would be very little incentive for drivers to complete a voluntary program.
There is (reluctant) recognition by the taxi industry that unless the customer service program is mandatory, few drivers will actually bother to upgrade themselves. Making the program mandatory would entail linking it to the taxi driver’s license renewal. At the same time, many of the more experienced drivers would resent having to take the time and expense to complete yet another regulatory requirement, and a challenge exam might be considered as an alternative.
The second module, leading to taxi guide, would presumably be a far more in-depth program, requiring at least 25 hours of in-class training. It should also be accompanied by a substantial number of site visits, perhaps by making an attractions passport available to them (and their family - to encourage them to spend more time to get to know the attraction), which, when stamped at the gate, identifies the "student" to the attraction management.
Again, there must be a strong promotional aspect linked to the recognition as taxi guide. Their availability (and foreign language capabilities) could be communicated to hotel guests, meeting and convention planners, etc. Especially if these drivers would also use better quality cars, they could access a much more financially lucrative market.
OTEC will become the provincial licensing agent of Taxihost once the Canadian Tourism Human Resource Council has purchased the program. Ostensibly, the new Effective Driver Training Program is the equivalent of the first two levels of Taxihost. As in Vancouver, experienced drivers who feel that they have the necessary skills and qualifications could use a challenge process.
Levels III and IV provide for certification to the taxi driver and tour guide standards, respectively.
OTEC is prepared to play a lead role in adapting the material to the requirements in Metro Toronto, and to apply for funding of much of the program. The MLC could contract with the deliverers for this program, which could include the brokerages especially for the first two levels, in order to retain control. In essence, once the existing drivers have been upgraded, there would no longer be any reason to run the first two levels.
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