City staff recommend reducing flat taxi fee from $4.25 to $3.25

City staff are recommending that the flat fee to hop into a cab in Toronto be reduced from $4.25 to $3.25 to allow traditional taxi companies to compete with ride-hailing app Uber.

The recommendation was made in a municipal licensing and standards report released Wednesday morning.

Speaking to reporters Wednesday afternoon, Mayor John Tory said he supports lowering the standard fare by a dollar.

“Not only does this make getting around the city more affordable for the public, but it also makes a traditional taxicab more competitive with Uber, especially given that taxis will continue to be the only vehicles which can be hailed on the street," Tory said.

Back in July, city councillors voted in favour of reviewing the rules governing the ground transportation industry in Toronto in an effort to create a level playing field between traditional taxis and Uber.

Taxi companies say UberX drivers put passenger safety at risk and are at a competitive advantage because they are not held to the same regulations and restrictions as the rest of the industry.

To address this issue, city staff have also recommended that Uber be placed in a new licensing category referred to as the Transportation Network Companies, which would require drivers to have commercial liability insurance, pay annual permit fees and consent to background checks.

"The staff report released today puts us on the right path forward," Tory said.

"Today, we've taken the first step forward to first bring Uber inside the law and regulate it and secondly, we've taken a very definitive step … to actually make it easier for taxis to compete for business."

While Tory acknowledged that Uber has been a "disruptive technology" for cab companies in the city, he said he does not believe it is the city's job to "legislate Uber out of existence."

"What we are embarking on here should not be viewed at all or presented … as a struggle between the cab industry and Uber because that is not what this is about. This is about giving the travelling public what they already have and what they want to continue to have going forward— competitive prices, convenience and better customer service," he said.

"Uber and technologies like it are here to stay. They are here to stay not because of anything I say or think, but because the people of Toronto continue to embrace the sharing economy at an unprecedented rate."

In a statement issued Wednesday, Uber reiterated its desire to work with the city to implement ridesharing regulations.

"It’s great to see the thoughtful leadership City staff have shown in crafting this report, which has a thorough understanding of how ridesharing, consumer choice and smart regulations can benefit Torontonians," the statement said.

"Having facilitated more than 4 million ridesharing trips in Toronto in the last year, Uber has become a choice local riders and drivers depend on. Given this scale, we recognize the need to be regulated and Uber is fully committed to work in partnership with the City in helping adopt and implement ridesharing regulations."

The president of iTaxi Workers Sajid Mughal, however, was not so optimistic about the two-tiered regulation system proposed in the report.

"If adopted by Council, these recommendations will spell the end of Toronto's taxi industry as we know it," Mughal said in a written statement issued shortly after the report was released.

"Taxicabs are regulated for a reason: they carry our most valuable cargo, human beings. We cannot have the wild, wild west in the area of transporting vulnerable passengers."

Coun. Jim Karygiannis, a strong Uber opponent who tabled the motion to review ground transportation services in the city, also slammed the report’s recommendations.

"(Uber) should be licensed as a brokerage or they can leave town," Karygiannis said.

"The issue is that the spirit of the motion that I put through, and it was seconded by the mayor, was to have everyone on a level playing field. What we have here is two levels, one for the taxi industry… and one for Uber, which is you can do whatever you want."

Beck Taxi said it intends to "carefully consider the report" but added they were pleased to see at least one of the recommendations on the list.

“We’re encouraged the city is taking the issue of insurance seriously,” Kristine Hubbard, Operations Manager at Beck, said in a written statement.

“That said, we want to make sure City Hall takes seriously its responsibility to protect Toronto’s riders.”

This report will be discussed by the Licensing and Standards Committee on September 16.