A lot of fuss has been made over the state of Calgary's Taxi Service and licensing status of late. I am not an expert on the issue but thought I would let the reader decide for him/herself. I know that each group will try to push their agenda and naturally lobby for their side. But if you look closely at the issue at hand, taking all the emotion out of the picture ( eg.the time it took 2 hours to get a cab during stampede or during the company Christmas party.), you will see an industry that is really at a crossroads.
Some Brief History:
Calgary has a population of over 1,000,000, but just 1,311 regular taxi licences. Its hard to believe, but this is exactly the same number of plates that existed in 1986, when Calgary's population was around 600,000 people.
You have to wonder....why were there no new licenses during this time? ( Note: The City did add 100 Special licenses for special needs taxicabs.) I think it comes down to this:
1) The industry cried for a Freeze 20 years ago as the drivers/owners could not make a living due to the "excess" capacity of cabs.
Interesting.... The industry demands a cap on the issuance of new Taxi Plates in order to ensure that there is enough work to go around. Fast forward 20 years and we are now hearing people scream for more taxi's.
2) Successful Political Lobbying and Fat Cats.
One of the basic principles behind supply and demand is scarcity. Once you have a hard time obtaining something ( or they stop making it) the value will naturally increase. This is exactly what happened to the Taxi license plates in Calgary. These plates are now rumoured to be worth $100,000 each. Nice investment for the handful of Cab magnates that control the plates in this city.
If you start adding more plates, then the value becomes diluted. Its no wonder the Fat Cats don't want the system changed. It would appear that the cab companies have been super successful in keeping the status quo for 20 years. I am curious to see what their campaign contributions were over this time period, as this influence over the Taxi Commission cannot be discarded, but I guess that is for another post.
So what is the answer?
The problem cannot be addressed by simply opening the floodgates and allowing an unlimited amount of new Taxi Plates. I do believe that during 80% of the time, it is easy to get a cab in this city. Unfortunately it is during the 20% extreme peak season when everyone freaks out ( when a majority Calgarians likely only depend on their service 2-3 times a year max.) once they realize it is nearly impossible to get service.
If the industry is really concerned with addressing the shortage, and not solely on their own economic agenda, perhaps the following idea will work?
- Why not issue temporary additional licenses during the peak season? ( Christmas, Stampede etc.) This will allow some new entrants into the system and ease the shortage issues.
If you want to see what NOT to do....take a look at the situation in Airdrie today. I am usually in Airdire twice a week and I have noticed a TON of new cab companies operating there. The problems mentioned in this article are exactly what Calgary wanted to avoid when they established the Taxi Commission. As a commercial insurance broker, I wonder if these Airdrie Taxi's are actually carrying the proper type of insurance, which could be a huge legal issue to the City of Airdrie as they seem pretty slack on their regulations. ( But again, this can be saved for another post!)
So during the Christmas Party season approaches, be sure to think about this issue and post your thoughts!