Photographer: Ben Nelms/Bloomberg

Vancouver Is Silicon Valley North. So Why Doesn't It Have Uber?

With spotty public transportation and a dearth of taxis, Canada's third-largest city seemed built for ride-sharing. Regulators didn't see it that way.

Visitors to Vancouver who want to use Uber are in for a surprise. Open the app and instead of the familiar city grid, there's a petition asking users to help bring ride-sharing to the province of British Columbia. "Make Uber in BC a reality," it says. In May Daniel Saks, who runs a San Francisco cloud-services startup called App Direct, flew in for a two-day business trip. Saks has used Uber in more than 60 cities; in Vancouver he paid a private driver $1,000 to ferry him around. "It's the only city in the world that I need to hire a driver," he says. "It just boggles my mind."

Few major cities have been quite as inhospitable to Uber as Vancouver, which sent the company fleeing four years ago after regulators declared it a limousine service and essentially destroyed the business logic. Yes, Uber has hit roadblocks elsewhere, most recently in Austin, Texas, where it pulled out after losing a vote requiring drivers to get background checks. But a political deal between Uber and City Hall seems at least possible in Austin, where commuting chaos ensued after Uber and Lyft left town. Such a compromise isn't expected anytime soon in Vancouver, where politicians say they're in no hurry to make peace with a company that some see as a foreign interloper and a threat to the local taxi industry.

On the face of it, Uber and Vancouver seem like a match made in ride-sharing heaven. Canada's third-largest metropolis bills itself as Silicon Valley North—home to local unicorn Hootsuite and a thriving tech scene that employs thousands of young people. Public transportation is spotty, there are half as many taxis per 1,000 people as in Toronto, and the sprawling city of 2.5 million suffers from the nation's worst traffic. In May, the website Vancity Buzz (now Daily Hive) reported that arriving cruise-ship passengers waited 90 minutes to catch a cab, forming a line 600 feet long. Vancouver seems purpose-built for ride-sharing.

In May, cruise ship passengers waited 90 minutes for a taxi, forming a line 600 feet long.
In May, cruise ship passengers waited 90 minutes for a taxi, forming a line 600 feet long.
Daily Hive Vancouver

That's what Uber thought too when it landed in the spring of 2012. At the time, the San Francisco company was embarking on its first major global expansion and considered Vancouver a natural beachhead. Uber handed out free rides at exclusive parties. It made a big thing of the fact that its first two customers were a reality show star and chief executive of a social media startup. So confident was the company, it warned riders there might not be enough drivers to accommodate demand.  Uber was following its usual playbook: asking for forgiveness rather than permission. 

The playbook lacked a chapter on British Columbia's Passenger Transportation Board. The six-member panel sets fares and interprets provincial rules governing taxis, black cars and limousines. The board is staffed with appointees who are typically older and not necessarily conversant with the latest trends in technology, says David Gillen, director of the Centre for Transportation Studies at the University of British Columbia. In BC, limos and black cars must charge a minimum fare of $75, a rate set to keep them from competing with taxis. In the board's view, Uber is a limo company breaking those rules, says board chair Don Zurowski, who lives in Prince George, a small city 500 miles north of Vancouver.

Traffic and buildings are reflected in the rear view mirror of a vehicle in Vancouver.
Traffic and buildings are reflected in the rear view mirror of a vehicle in Vancouver.
Photographer: Brent Lewin/Bloomberg

In November 2012, the PTB told limo drivers working with Uber they were breaking the law and could lose their licenses if they didn't charge the minimum fare, according to briefing notes prepared for BC's transport minister in 2014 and posted to a government website. "If you knowingly and on an ongoing basis breach the laws of the land, there are consequences," Zurowski said in an interview. "At that point in time, Uber decided to leave." Uber's exit created an "e-mail and social media frenzy," according to the briefing notes, which also said the board received more than 700 e-mails in "a very short period of time, the vast majority supporting Uber.'' The hashtag #UberVanLove trended on Twitter. 

Vancouver is something of an outlier in Canada. Uber has operated in Toronto since 2012, despite a regulatory debate raging over its legality. Earlier this year, Canada's largest city passed new rules for ride-hailing apps, slightly raising the base fare for an Uber ride and letting traditional taxis charge surge pricing for rides booked through apps. Uber, which has more than 400,000 regular users in Toronto, welcomed the rules while taxi representatives grumbled. In Quebec, Uber has 450,000 users, mostly in Montreal. The province's transportation minister has been critical of the company, but put off passing a bill last month that would have required drivers to obtain taxi licenses in favor of more consultation. 

Critics say British Columbia's government is bowing to Vancouver's powerful taxi industry. Kulwant Sahota, president of Yellow Cab Co. and the Vancouver Taxi Association, says Uber will provide unfair competition for cabbies at a time when the cost of living has soared. It's a message the industry has hammered hard. "The taxi lobby has been very successful," says Gillen, who adds that industry representatives often attend fundraisers for the ruling Liberal party. 

In other cities, Uber has operated even when regulators ask them to stop, paying drivers' fines while building political support for friendlier rules. Uber left Vancouver because it didn't want drivers to lose their licenses. "This is how those individuals made their living," says Ian Black, who runs the company's Canadian operations. "The PTB took a very hard-line stance."

That stance hasn't softened. Though Uber has argued its model doesn't fit into existing regulations and therefore shouldn't be treated the same as traditional taxi and limo companies, Zurowski says the rules are clear: for-profit driving services need to be licensed by the Passenger Transportation Board. When rumors circulated in 2014 that Uber was about to launch a guerrilla campaign with new drivers, the provincial transportation minister threatened to deploy undercover officers to fine drivers without licenses.

In January there were signs that the government might be changing tack. Premier Christy Clark asked Peter Fassbender, the minister in charge of public transit, to start talking to municipalities about how they might handle Uber; the government ran Facebook advertisements asking citizens if BC should "welcome the sharing economy?" Little has happened since. Asked about the government's next steps at an event for an agricultural tech startup on June 28, Fassbender said officials are being deliberate so as to maintain a "level playing field" for taxis and Uber. He plans to release a consultation document in September to get more feedback from everyone involved.

Typically by now, Uber would have launched its most popular service UberX, which lets regular Joes and Janes use their personal wheels as a taxicab. The gig economy is thriving in Vancouver, where it's common for people to juggle  various jobs so they can avail themselves of the city's outdoorsy lifestyle. But because the limo service never got the ground, neither did UberX. Various taxi-hailing apps have emerged but you still have to pay the driver the old-fashioned way—and as the cruise ship passengers discovered, cabs can take a long time to show up.

In the meantime, Vancouverites will keep petitioning the government to let Uber operate. And they will continue muddling through. Mindful of the time she waited three hours for a cab after a Christmas party, television host and producer Fiona Forbes makes sure to line up transportation ahead of time whenever she and friends hit the town.  Sometimes she simply chooses not to go out, knowing getting home will be impossible. "It's crazy that you have to think that way,"she says. "We're a world-class city; we're not in the middle of nowhere here in Vancouver."

 

 

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