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The City of Ottawa, Uber, and Unbridled Political Sleaze

On August 12, 2016, the Ottawa Citizen reported that "Ottawa taxi drivers launch $215M lawsuit against city." [Source.]

The suit was launched in response to Ottawa's decision to allow the global taxi company, Uber, to set up its taxi operation the city without having to jump over the barriers to entry that the city had set up fifty years earlier and which all other taxi providers were required to overcome.

On September 16, 2016, the CBC reported that Ottawa had filed a defense in the taxi industry lawsuit. [Source.]

In the opinion of this author, the taxi industry lawsuit is entirely justified. It is also the opinion of this author that the industry's lawsuit is hopeless. Western mixed economy welfare states have given up on pretending that justice has any role to play in political outcomes. The astute observer of the contemporary political scene is already familiar with that simple truth. Economic outcomes are not decided by cumulative decisions made by consumers. They are determined by money and politics. As Democratic presidential nominee, the ailing Hillary Clinton, has so aptly demonstrated during her amazingly successful criminal career, it's "pay to play." And Uber has the means to pay. (See "The Companies That Are Funding Uber and Lyft," [Source.])

While it is my opinion that the outcome of the Ottawa taxi industry lawsuit is a foregone conclusion for reasons stated, I would still like to comment on one or two of the reasons the city of Ottawa has used to defend its transfer of the Ottawa taxi industry to Uber.

To keep it brief, I shall use the CBC report's synopsis of the City's defense rather than delving into the nuts and bolts of the formal legal defense.

In its statement of defense against the suit filed in August by Capital Taxi and Marc Andre Way, whose family owns the largest number of taxi plates in the city, the city says it has no responsibility to protect the taxi industry from any financial losses that might arise from the regulatory changes.

Because the city allows a limited number of taxis on the streets, new taxi plates are hardly ever issued. For decades, the only way to enter into the city's taxi business was to buy a plate from a current holder — a practice which the city has been aware of and has done nothing to stop in its 50 years of regulating the industry.

Observe the misleading wording of the CBC's report, "a practice which the city has been aware of and has done nothing to stop in its 50 years of regulating the industry."

Not only has the city been "aware of" this practice. The city created it. The reason the city "has done nothing to stop in its 50 years of regulating the industry," is because the city created it in the first place. And over that 50-year span, the city was perfectly content to allow the market in taxi licenses to function until Uber blew in and "opened their eyes." Then it did an about-face without any regard to the financial destruction their sudden adoption of a two-tiered taxi system would have upon local citizens who had invested their lives and fortunes in the city's own taxi license franchise system.

Yet, the city claims it has "no responsibility to protect the taxi industry from any financial losses that might arise from the regulatory changes." That's like a hangman saying he has no responsibility for the broken neck that occurs after he releases the trap door on the scaffold.

If there were actually any intelligence behind the city of Ottawa's decision to give Uber a fast-pass to its taxi market one could reasonably argue that the whole taxicab regulatory system was a set-up from the beginning. That the city would now claim that it has no responsibility to protect the financial losses it exposed industry participants to in the first place is laughable.

But that is how politics works.

I have been writing about it for years. Much of my work can be seen at my blockrants website.

Then there is this gem,

Buying and selling those taxi plates "created a speculative and artificial secondary market for time-limited taxicab service licenses" that the city had nothing to do with other than register the plate transfer, according to its statement of defense.

Since the city created the market in taxicab service licenses in the first place, the claim that they had "nothing to do with it" is gut-wrenchingly nauseating.

Yet, they will probably get away with this incredible horseshit once they present it in a government-run court.

Just when you think I am finished, I get to the best part under, "Taxi industry failed to 'innovate'."

Blame the Victim

It added that the taxi industry failed to "innovate" to compete against Uber, even though it had "historical" advantages.

"Rider preferences showed generally that taxicab service providers were incapable of matching the transportation service experience provided to users of the Uber Apps," said the statement of defence.

Let's start with, "Rider preferences showed generally that taxicab service providers were incapable of matching the transportation service experience provided to users of the Uber Apps."

The main "preference" that Uber riders have when choosing between taxi providers is this one: price.

And the reason Uber is able to charge a lower price is, not because the taxi industry "failed to innovate" when it came to service pricing, but because taxi rates are dictated by the local government. Any other taxi operator who tried to "innovate" by charging rates other than those mandated by the government would be fined and/or shut down.

Blame the victim?

Uber has also introduced several other "innovations" into the taxi business that have a lot to do with its ability to charge a lower price than competing taxi service providers.

Uber hires unlicensed cab drivers. If another taxi brokerage were to employ this "innovation," they would be fined. So there's that.

If a traditional taxi brokerage were to match riders with drivers by signing up a fleet of private, unlicensed taxicabs, this "innovation" would run afoul of the city's regulations. The brokerage would be fined and/or shut down.

If a traditional taxi brokerage started to dispatch fares to people driving their own personal cars without proper commercial insurance the city would not only frown on such an "innovation" but would act swiftly and decisively to put an end to the practice, unlike their response to uninsured Uber taxis.

Another Uber "innovation" is to save money by ignoring certain mandatory "innovations" that traditional taxicabs are required to adopt, such as spy cameras, amber 911 lights, identification numbers and markers, roof lights, strict vehicle age limits, regular inspections, trip sheets, tariff cards, accessible vehicles and a plethora of other impositions that all have an impact on the price of non-Uber taxi services.

It can not be argued that the alleged failure of the traditional taxi industry to "innovate" is the fault of an industry that has had to operate under a government mandated straight-jacket since before most current industry stakeholders were even born.

For the city of Ottawa to adopt the defense that the taxi industry failed to innovate while simultaneously being subjected to a spectrum of costly and, often idiotic, government regulations exemplifies the depths of the criminal mentality that imagines the city of Ottawa has any "defense" at all in response to its disgustingly preferential treatment of the Uber bully.

Conclusion

Predicting the weather remains fraught with uncertainties, as my good friend Harvenut Puritan has pointed out in his most recent guest rant. I have never been much good at predicting the weather. There are too many variables.

On the other hand, I have been astonishingly prescient in my ability to predict political outcomes. It is derived from my ability to accurately assess the character of most of those who enter the field of politics as a vocation. Politicians buy and sell human beings. They lie and cheat while pretending to act out of a concern for justice. Many would kill their own family members for political advantage, as history clearly shows. (See Henry VIII, Peter the Great, Hitler and Stalin and countless others.)

And many more will not shirk from destroying people who they don't even play golf with.

Like taxi drivers.


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