Uber's application to operate in B.C. localities beyond Metro Vancouver — including Kelowna and Victoria — has been denied by the provincial Passenger Transportation Board.
The ride-hailing startup was allowed to operate in Metro Vancouver in January 2020, after a protracted licensing period and protests from local taxi companies. It had applied to set up operations in the rest of B.C. on Aug. 31, 2020.
The board says protests from local taxi companies, throughout the cities that Uber planned to expand into, led to it retaining an external consultant, Dr. Dan Hara, to investigate the impact of the pandemic on local taxi companies' revenues.
Subsequently, they found that there was a marked decrease in people using taxis, both due to the pandemic and because of the impact of ride-hailing startups like Uber and Lyft.
"The [PTB] is satisfied that Uber is fit, proper and capable of providing the proposed service," the board says in its decision.
"In the current circumstances, however, the board is not convinced that there exists a public need for the service applied for."
The PTB also says Uber's proposed expansion would not "promote sound economic conditions" for the passenger transport industry.
Significant drop in taxi, ride-hailing usage
In denying the application, the PTB said the "objective evidence" gathered with the help of Hara showed a low passenger demand for taxis and ride-hailing services throughout 2020 and 2021.
The number of cab trips, province-wide, in May 2021 was 26 per cent less than the number of trips in May 2019.
Only one market, the Okanagan-Kootenay-Boundary-Cariboo region, saw an increase in trips in May 2021 compared to pre-pandemic levels.
Percentage change in cab trips in B.C. in May 2021 compared to May 2019
The other markets saw marked decreases.
In the Lower Mainland — where Uber and Lyft are active — trips with taxi companies specifically declined by nearly two-thirds compared to May 2019, and trips with taxis and ride-hailing services dropped by eight per cent overall.
Various taxi companies argued that they were being squeezed by the entry of ride-hailing apps into the market. Moreover, an ongoing shortage of taxi drivers resulting from pandemic safety concerns has created pressure for existing drivers, incentivizing many to operate with Uber and Lyft instead.
"The board is concerned that granting this application at this time would unduly harm existing [ride-hailing] and taxi companies," the decision says. "It finds the markets in the regions applied for are unable to absorb more competition at this time."
In its application, Uber argued that a "significant" number of users in Victoria and Kelowna opened their app trying to find cabs between Sept. 2019 and Aug. 2020, demonstrating that there was a need for their services there.
They also said that they offered a "more reliable option" in smaller communities where services were inconsistent.
"Ride-hailing … [makes] it easier and more affordable to get around," the company is quoted as saying.
A special committee is set to review the impact of the ride-hailing industry on B.C.'s taxi companies. It will release its findings in July 2023.