Taxis have benefited too long from an overly restricted market, with all of the expected results: high prices, poor service and a lack of innovation.Saul Klein is the dean of the Gustavson School of Business at the University of Victoria, home of the Gustavson Brand Trust Index.
But the province won’t make it easy. Although some of the new restrictions that B.C. has instituted are worthwhile, such as mandatory insurance, a requirement that drivers offering ride-hailing will be required to obtain Class 4 commercial licences, the same as held by taxi drivers, and observe minimum-fare requirements, are more problematic. The professed reason is safety – the move was endorsed by B.C.
Overregulation that blocks the rise of a more innovative industry is the wrong way to go. The need to have a level playing field for all providers is an admirable goal, but that playing field should be as open as possible, and not limited to current players and not be based on setting minimum prices that constrain competitive forces. Service providers should be free to choose their own business models and consumers should be free to choose which models work for them.
The majority of ride-hailing drivers are part-time and casual workers, working on flexible schedules and responding to changing-demand conditions for their services. In times of peak demand, for instance, prices rise, encouraging more drivers to enter the market and satisfy customers.