B.C.’s ride-sharing red tape hurts consumers

The government is trampling on the rights of ride-sharing businesses and their potential customers

Matthew LauMany British Columbians want rides from Point A to Point B and will pay somebody to drive them. Others have access to cars and want to earn money giving people rides. But the provincial government is preventing these mutually beneficial exchanges.

The governing New Democrats promised during the 2017 election campaign that British Columbians would have access to ride-sharing services before the year was over.

But it looks like the earliest that Uber, Lyft and similar services will be allowed to operate in the province will be late 2019. That’s a delay of two years or more.

Even then, the ability of British Columbians to access ride-sharing will be severely restricted. There will be a great deal of government control over prices and supply. And illegal taxis and ride-sharing companies could face fines of up to $100,000 – a 20-fold increase from the current $5,000 maximum penalty.

The government’s heavy regulations on ride-sharing, including its proposed cap on the number of drivers who would be allowed to serve the market, are motivated in large part by its desire to protect the existing taxi industry from competition. In doing so, the government is trampling on the rights of ride-sharing businesses and their potential customers.

Everybody agrees that there’s nothing wrong with people taking a bus to school because it’s cheaper than a taxi, or for people to drive or carpool to work because it’s more convenient than a taxi. But people who take buses or drive cars are depriving the taxi industry of income, just as Uber and Lyft passengers are.

Given that there’s nothing wrong with taking a bus or driving (or walking or bicycling), even though these transportation decisions deprive the taxi industry of income, surely there’s nothing wrong with taking Uber or Lyft.

The government should not be restricting these ride-sharing services to protect the taxi industry.

The government is trampling on consumers’ rights by imposing price and supply controls on ride-sharing.

And it will require that ride-sharing drivers have Class 4 licences, instead of the standard Class 5 licences most drivers have.

This impose an unnecessary encumbrance on drivers, meaning there will be fewer of them to serve customers. It’s a particular deterrent to drivers who want to work only occasionally.

The government claims that requiring Class 4 licences protects passengers. This argument fails for two reasons:

  • the government’s own commissioned report, written by industry expert Dan Hara, concluded that drivers should not be required to have Class 4 licences;
  • it should be up to the passengers, not the government, to determine what level of risk they are willing to accept when they use ride-sharing services.

Nobody – including the government – objects if people select more dangerous occupations (such as working as a logger or in construction) in order to earn a higher wage. Why should the government object if people are willing to accept a riskier car ride in exchange for a lower price?

The B.C. government’s delays and proposed heavy ride-sharing regulations aren’t grounded in economic evidence or logic. The delays are unnecessary, and the regulations are harmful to those who want to use or provide ride-sharing services.

Matthew Lau is a research associate with the Frontier Centre for Public Policy.


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