Thursday, July 22, 2010 at 6:53PM Toronto Cab Drivers Growing More Prickish...by design.
This started off as a reply on a Facebook thread. A friend had posted his recent experience where a cab driver who did not accept his fare because it wasn’t to going to net him enough money after presumably waiting a long time in a queue. This is a practice becoming more common outside of the hotels, venues and specials events of Toronto. It’s easy to dismiss it as greedy drivers but it’s more complicated than that. I think this is more a move of desperation on the part of drivers who for a number of reasons can barely make a living in this town.
Unfortunately, there will be more of this to come as the cab business in Toronto has been run into the ground due in large part to a market controlled by the Howard Moscoe and the regulating commission that have some credibility problems when it comes to who’s interests they are really acting on behalf of. Some folks make a lot of money off the taxi business in Toronto. Those are not the people who drive the cars I assure you.
Rates have been recently increased but still are very low relative to increases in cost of living and operation of their vehicles. Insurance for everyone has gone up for cabbies, industry wide, it has increased dramatically. I've heard more than a few stories of their rates doubling. Gas of course has gone up substantially as well…and makes no mistake; this was never a lush business margin-wise to begin with.
In Toronto in particular licensing is a big problem. There are two kinds of licenses.
1. What they call full plate. These are EXTREMELY expensive. Last I heard they were going for $180000 on the private market. There is a fixed number in the market and you cannot get one from the city anymore.
They were originally sold to owner by the city for less than $10 000. Most of these plates are owned by a very small group of people and cab companies. Mel Lastman was rumoured to own great than 60 of these at one point. That’s 60 000 in investment and 9 000 000 in upside decades later. So yeah, keeping the prices of these plates high, artificially so, is in the best interests of some very rich folks. This is not free market. This is the worst kind of market interference and here’s why.
These licenses are valuable because
a. you can resell them
b. you can lease to other drivers / companies (none of the owners of the plates actually drive a cab I assure you)
c. if you get sick a family member or friend can sub in for you
d. it can be willed / gifted and
e. you can have a night driver to maximize your investment. If you are the cab owner...pretty much no one makes money driving 12 hours a day and letting the car sleep the other 12.
2. The ambassador plates - in lieu of issuing new 'full plates' , which would have reduced the market value of the existing ones, making them affordable for drivers to run their own businesses and taken lots of money out of the pocket of many powerful Toronto richy connected types, they issued this new type of license.
They are reasonably cheap but not at all the same as a full plate. Through their limitations they make it almost impossible for a cabbie to actually make a reasonable living under this license.
With these licenses you and only you can drive you car. You cannot resell it. You cannot will it. If you get sick or injured no one can drive your car and let you make some rental income. Most importantly you cannot rent your car in your off time to a 'night driver'.
Full plate owner build equity in his investment. Ambassadors don't.
Full plate owners don't have to be cab drivers. Ambassadors do.
Full plate owners can lease their plate to a driver / company if they retire or quit. Ambassadors can't.
Full plates can be used 24 hours a day by any licensed cab driver. Ambassadors can be used as much as the one guy can drive in a day; practically forcing most drivers to work 12, 14, 18 hour days.
And when I speak with drivers of any stripe, neither is making much money. They tell me it’s not uncommon to go home literally making little to nothing once they paid for their expenses. If you are driving a car for a company, you are almost certainly are not the owner of the plate so you have to lease a plate…that’s right, marking up licensing is a business in this city, then you have to rent the car, then you have to insure it, then you have to put gas in the tank AND you have to kick up to the cab company for dispatch service.
If you’re an ambassador driver you don’t have to lease the license but you do have to own a fairly new car and maintain it and you it you cannot make any money renting it when you’re not driving. This alone apparently would amount to a 50% wage increase to these types of drivers. They also have to save more for retirements as their plate goes back to the city when they’re done. No juicy resale. Oh and if they get sick, they’re pretty much f-ed, so more rainy day savings are required…if and when they actually make money.
The cabbies in this town are always getting screwed. Years ago it became MANDATORY that they install cameras in the cabs. Fine…but they had to go to a specific vendor, dictated by the city, to have the rig put in. A singular vendor to the 1000s of cabs in Toronto; of course the price was jacked. Drivers could get the same system installed in Buffalo by a manufacturer's approved agent for 50% less…but that probably does count the costs involved in ‘entertaining’ the officials who issued this no bid contract.
Why am I writing this dissertation on the cab business in Toronto? Because as you can see it’s pretty much a brutal job with very little compensation for the actual drivers. Naturally this is not going to attract the best people into the profession and it’s going to cause drivers to do things like cherry pick the juiciest fares. Is it right? No but this is the climate that the city has created for the guys on the ground. They gotta eat. They gotta put food on the table. Should you complain when it happens? Yes. Absolutely. I hope the process of complaining brings to light the under lying causes of why the level of taxi service in this town is rapidly eroding.
The only people who are doing/going to be doing this job are folks who can absolutely, positively not get a job doing ANYTHING else…because frankly almost anything pays more. These are our ambassadors to tourists at the airports (actually they can’t pick up fares there), train stations (a 3rd worldesque chaotic scene on Front St.) and business centers. It’s a disaster of a business from the top down and it’s going to get worse.
