On November 19, 2014, John Tory stated confidently, “Uber and Hailo are here to stay.”
Ironically, ride-hailing firm Hailo had left Toronto weeks earlier. A law-abiding entity, it could not compete, waved a white flag, and left. Tory was unaware of this fact.
Uber has been a different story. Toronto allowed it to break any by-law it chose for almost three years, giving Uber an unprecedented business advantage.
Alas, Uber has not lived up to John Tory’s expectations. In fact, Uber CEO Travis Kalanick was forced by investors to step down after a horrendous six-month run of disasters. Female engineers at Uber reported on sexual harassment and discrimination; regulators discovered Uber is using “Greyball,” software designed the help it avoid the law; Uber is being sued by Google for allegedly stealing its self-driving car technology. Uber is overcharging passengers and underpaying drivers.
Uber’s gleeful lawlessness is proving to be its Achilles heel. This was obvious to anyone with common sense while Toronto was re-writing its vehicle for hire by-law for Uber last year and SHOULD have been immediately apparent to the politicians we pay to make our laws. It was not.
On June 21, in an article entitled “Uber can’t be fixed; it’s time for regulators to shut it down,” Benjamin Edelman wrote in the Harvard Business Review: “The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.”
“Having built a corporate culture that celebrates breaking the law, it is surely no accident that Uber then faced scandal after scandal. How is an Uber manager to know which laws should be followed and which ignored?” Edelman asks.
In Toronto, the cost of the short-sighted decision to reward law-breakers has been brutal: it has caused a true crisis of faith for immigrants who came here honestly and work tirelessly. I doubt the damage done to their concept of Canada’s Rule of Law will ever be undone.
“I left home to get AWAY from this kind of corruption!” I have heard from cabbies from Pakistan, Afghanistan, Iran and Egypt. “And here it is again!”
Hans Wienhold, a taxi driver and blogger puts it this way: “Given that the taxi industry is disproportionately populated by recent immigrants…what message does this send to the new waves of immigrants and refugees looking to build a secure life for themselves?
“I’ll tell you what message it sends… ‘Do not work hard and invest your life and savings for the long term, because you now live in a regime where everything can be taken away from you by a simple vote at a city hall.’”
Wienhold also made a sad observation on the fact that all of the most expensive elements of a secure taxi industry were never about safety at all.
“Now we see clearly that none of these things ever had anything to do with safety; they were just power grabs and cash grabs. No one will ever buy the politicians’ BS again.”
Recently, we have seen more drivers ignoring the law, refusing short fares, or requiring a minimum fare; basically rejecting the City’s authority to set fares and rules.
Because, what law?
John Tory and Toronto Council should have seen this coming. They did not.
As this week’s Time Magazine cover says, “Uber fail.”