Uber warns Toronto customers of increase in prices and wait times in response to licence freeze

WATCH: @Uber takes Toronto drivers to task over taxi brawl and spike in prices https://t.co/p5iSuDZZu9 pic.twitter.com/cMLE8ZAvtS — Canada News Tonight (@CBCNews) August 6, 2018

Uber is warning customers of a rise in prices and longer wait times in Toronto after a taxi tariff and licence freeze prompted the ride-hailing company to file lawsuits against the city.

Toronto’s taxi commission is moving forward with a plan to freeze the city’s taxi licences, which had doubled in value in recent years, according to a CBC report.

The 30-day moratorium prompted Uber to file a series of lawsuits against the city, accusing it of unfairly stifling competition by imposing an unfair licence and tariff freeze, The Canadian Press reported.

Uber, which has more than one million users in Toronto, claims that ride-hailing companies are unfairly being discriminated against by the city because they can’t offer discounts to taxi drivers, and is seeking monetary compensation for that.

In a letter obtained by the CBC, Uber Toronto general manager Steven Cai told customers that the new tariffs would lower driver wages.

“We have spoken to drivers in the last 24 hours who have said they can expect a 15-20% reduction in pay by the end of the month,” Cai said in the letter.

But Cai said Uber would take action, if necessary, to “bring this to an end.”

The City of Toronto does not speculate on lawsuits, but has yet to respond to requests for comment.

In response to Cai’s letter, Mayor John Tory wrote to the taxi commission chairman Tuesday, saying he is willing to find a “solution that works for all players” in the market.

Cai said the problem lies with the entire taxi industry, not the ride-hailing services.

“Uber has tried to call for a truce, and has written to the commission asking for a suspension of these new tariffs, but the commission was adamant about its plan,” Cai said.

Kathy Gordon-Crook, director of applied economics at Queen’s University in Kingston, Ont., told the CBC that measures like charging higher fees for holding a taxi licence without a license could increase prices for rides.

Drivers can find the ride-hailing apps at no extra cost as the fares are directly negotiated with the company.

Gordon-Crook told the CBC that the 25% tariff hike is necessary because city revenue from taxi licences is lower than expected.

Toronto spends $57 million annually to collect taxi revenues, Cai said, while the cost of issuing permits and licences was $47 million last year.

Under the levy, a $15 license is the same price as a $1, and a $25 licence is only $1 more expensive than a $21 license.

The city council voted unanimously last month to create a 1% passenger transportation levy to fund the city’s share of the price of taxi fees paid by passengers.

The 10-year levy, Cai said, should be “a serious concern to Toronto residents” since there is a trade-off in quality of service.

The livery fee increase will only apply to drivers who held a taxi licence at least 90 days as of Sept. 1, 2018, and paid their commission in full.

City council is expected to vote again this month on the new fees.

The previous council rejected a ride-hailing pilot project, which would have allowed Uber and Lyft to compete with the city’s taxis, in June.

The battle is playing out in larger cities across North America.

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