Ride-sharing companies will face new rules for operating in Red Deer when a revised bylaw is approved by city council. (Black Press file photo).)

Uber drivers warn high licensing costs would force them out of Red Deer

City council will discuss parameters for a new bylaw on Monday

Red Deer’s Uber drivers say new rules the municipality is considering could prevent them from operating in the city.

Their concerns range from high licensing costs to too frequent vehicle inspections.

Michael van Hemmen, of Uber, wrote to the city stating that the parameters city council is considering are “not sustainable for the ride-sharing business model,” in which many drivers sign up for the job, but many end up taking very few fares.

Van Hemmen added Red Deer’s proposed requirements are more onerous than in three other mid-sized Alberta municipalities.

In his comparison with Lethbridge, Airdrie and St. Albert, only Red Deer is considering requirements for rider-share drivers’ and vehicle licences, and semi-annual vehicle inspections. (Lethbridge relies on provincial regulations for record-check standards, while Airdrie and St. Albert only require annual inspections.)

Red Deer is also the only community of the four considering mandating annual quality compliance inspections.

But the biggest difference is in business costs.

According to van Hemmen’s comparison, if Uber drivers had to pay the same licensing fees as Red Deer taxi drivers, the cost for 100 ride-share drivers and their vehicles would total about $36,500 — compared with paying $774 in Lethbridge, $1,000 in Airdrie and $682 in St. Albert.

Van Hemmen called this one of the key factors that could prevent Uber from continuing to operate in Red Deer.

Local Uber driver Travis Beebe expressed similar concerns in a letter, saying “Uber drivers really don’t make a lot of money.”

Additional upfront costs may cause many drivers to be squeezed out of the city, “thus negatively affecting availability of the service,” Beebe wrote.

In a report to be presented Monday to city council, inspections and licensing manager Erin Stuart acknowledged that aspects of the proposed bylaw don’t mesh with Uber’s business model.

Since dozens of motorists apply to drive for the company, but many only work a couple of times a month, Stuart is recommending that lower licensing fees be considered for very part-time Uber drivers, as opposed to more full-time taxi drivers.

Vehicle mechanical checks could also be done once a year, instead of twice, for Uber drivers who take few fares, she added.

While Uber prefers a unified licensing system, which puts the onus on the company to be self-regulating under provincial requirements, Stuart is not recommending that city council consider this model — which is not favoured by the taxi industry.

Taxi companies want the city to continue setting standards and expectations for their industry to preserve their reputation for safety.

Cabbies are also concerned about the proposed lifting of a cap on taxi licences. Stuart is, therefore, recommending the cap be maintained for two years and then be reconsidered.

Stuart feels a proposed bylaw could have different fee options and vehicle check requirements, while still regulating all driver-for-hire companies.

City council will discuss this on Monday.


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