Uber To Cease Operations In Quebec

Tyler Durden's picture

Just days after Uber lost its license to operate in London, the online ride-hailing service that has been at the centre of various controversies and scandals for the past year, announced it would cease operations in Quebec as of Oct. 14. According to the Montreal Gazette, the final straw for Uber, which has been negotiating with the Quebec government for months in an effort to co-exist with the taxi industry, reportedly was a government demand that its drivers submit to a 35-hour training program already imposed on taxi drivers.

Uber reportedly felt such a program was incompatible with its business model, which relies on part-time drivers who would presumably not be ready to undertake the course. Other government demands included mandatory vehicle inspections every 12 months and background checks on drivers performed by police rather than a private firm.

In short, all hurdles that the company decided were a dealbreaker for its future operations.

As the Gazette adds, the stage seemed to be set for some kind of push back from Uber last Friday, after Quebec Transport minister Laurent Lessard announced the new conditions, describing them as merely an extension of a year-old pilot project permitted under the current rules.

That led Uber Quebec spokesperson Jean-Christophe de le Rue to accuse the government of adhering to “new and challenging regulations that favour old policies instead of incorporating the benefits of new technology … based on our current understanding, these changes significantly threaten Uber‘s ability to continue operating in Quebec.”

The measures came after a year of discussions with the taxi industry, which resulted in 19 recommendations to Lessard. But those discussions followed a series of public splits and policy reversals within the Quebec Liberal government over whether Über could co-exist with the province’s taxi industry.

In May of 2016, the youth wing of the Quebec Liberal Party and some business groups criticized the government’s lukewarm or sometimes hostile attitude toward the ride-hailing service, and while the Couillard government and then Transport minister Jacques Daoust took a tough line with the service, insisting drivers obtain Class 4C driver’s licences and taxi permits, those conditions were eventually dropped and a pilot project developed to try and marry Uber’s business model within the existing taxi industry.

According to the Gazette, Uber has been making waves for the taxi industry and the Couillard government since it became a part of Montreal’s transportation landscape in 2015. The taxi industry complained Uber was engaging in unfair competition, since its drivers didn’t hold expensive permits required of taxi drivers, some of which sold on the second-hand market for nearly $200,000.

Reacting to the news, a coalition of taxi owners said the government must not bend to Uber’s threats to pull out if it doesn’t get its way. “Uber is not obliged to cease operations it is only doing so to frustrate users so they can put pressure on the government,” said Georges Malouf, a spokesperson fort he group. “Once again, instead of negotiating in good faith, Uber prefers to use bullying tactics.”

While the Quebec blowback against Uber may have been many months in the making, with two major markets lost in under one week, one wonders which city will be next, and where the biggest transportation disruptor to emerge in recent years will itself be disrupted as legacy service providers and local politicians continue to push back against the deflation-creating and money-losing company.

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Francis Marx's picture

 Governments are always the number one oppressors of economies and consumers.

Stupidity follows right behind oppressor.

Buckaroo Banzai's picture

Economically speaking, Uber is a piece of shit and deserves to die. Is regulatory arbitrage now what passes for "value creation"? Fucking pathetic.

Don't like your local taxi and limousine regulations? Then figure out a way to change them. IMO, frankly there's a lot worse uses for local government than regulating taxi service. Does it make it more expensive? Yes. Is that a bad thing? Not necessarily. Constructively limiting competition and regulating vendor behavior can actually be economically useful.

Uber is a "better product" than your local, regulated taxi service because Uber vastly underprices their product to kill their regulated competition, while simultaneously financially deceiving their drivers, by underpaying them and pushing a huge amount of cost and risk onto them-- cost and risk that the idiot drivers are ill-equipped to evaluate or understand given that they are economically illiterate part-time amateurs.

Uber is just one more symptom of the stupid clown world economy that out-of-control fiat jewbux printing has created.

Francis Marx's picture

Uber gave the transportation industry true price discovery.

Cab cost before Uber were through the ceiling. 

 

Buckaroo Banzai's picture

Go back and read what I wrote. Cab costs are "through the ceiling" because its a fucking expensive business. Every time you get into a cab, you are paying for a car AND a driver.

Uber has "lower prices" and "better quality" because their services are not properly priced, and their employees are not properly compensated. It is a giant money-losing scheme designed to drive their competition out of business.

Both the local taxicab business, and the national rental car business, are on the verge of collapse thanks to Uber's predatory pricing and economically illiterate drivers.

Uber rates will literally triple once the competition has been wiped out, assuming of course Uber doesn't financially collapse first--which in a just world, it would.

You can take that to the fucking bank.

RagaMuffin's picture

Sounds like the situation is self correcting even down to the financing of UBER, among others

Buckaroo Banzai's picture

Don't count the Jews out yet. I'll count Uber as dead, only after it is dead, buried, and a stake has been driven through its heart.

RagaMuffin's picture

Perhaps the crux issue in NYC is not who owns/controls the Taxi medallions but the system that created that false value..... They are entrenched. What are the odds of any systemic change politically regardless of whether they are Jewish or not. the Goy robber barrons were a sticky fingered bunch.......

Buckaroo Banzai's picture

Corruption is endemic to the human condition. Some kinds of people seem to be more corrupt than others. Sometimes those kinds are recognizable from a distance, if you know what I'm saying.

It's pretty well known that Uber causes massive traffic jams in San Francisco. This is one of the reasons why taxi services were regulated in the first place. Is it really in the public interest that the public streets be jammed with freelance drivers hustling to make a buck? No easy answers, but people who act like Uber is some kind of magic bullet money-tree solution to what are age-old public transportation problems that will always be with us, are delusional.

oncemore's picture

Here in Vienna/Austria, Uber operates ONLY thanks to the corruption of unbelievable dimensions.

beemasters's picture

"Uber rates will literally triple once the competition has been wiped out"

Until the next competitor comes along...That's how it goes.

It's not Uber killing the competitor right now...It's the government.

SafelyGraze's picture

+! for "regulatory arbitrage"

 

RedBaron616's picture

If there were no taxi regulation, freelance drivers would weed themselves out. It is the same reason that there isn't a grocery store on every corner. There is only enough business for a limited group. Freelancers would eventually make too little money to stay in the game.

armageddon addahere's picture

They don't make anything now. Lucky for Uber there is an endless supply of young car owners who don't know how to figure it out. It can take weeks or months for them to catch on.

U4 eee aaa's picture

....usually after the first few car repairs and they learn a new phrase:

wear and tear

FatTony7915726's picture

In Quebec, the Quebec Liberal Party is presently governing and its Prime Minister, Philippe Couillard is corrupt to the bone.  Couillard and his Liberal Cabinet love BROWN envelopes stashed with $100 bills.  CORRUPTION!!!

Onan_the_Barbarian's picture

The real expense is the super-expensive taxi license/medallion.  The supply of these is artificially limited and they're allowed to trade on a secondary market.  This provides zero benefit to the citizens of any city.

The real gift of Uber is that they broke this cozy little corrupt arrangement most places they showed up.

 

Buckaroo Banzai's picture

We can agree on that. But replacing one set of problems with another set of problems isn't really progress. Trading a system of local control (local taxicabs regulated by local jurisdictions) for a system of national-level oligopoly control (Uber and Lyft sewing up the national car-based transportation network) doesn't sound like a good idea tbh.

Francis Marx's picture

Then how come so many people drive for Uber???

Buckaroo Banzai's picture

Because they are economically illiterate? And because in Clown World, a terrible job that gives you the illusion of being a good job, is better than no job, or a shitty corporate job with no future?

Driver turnover is a huge problem for Uber. There are a lot of "former" Uber drivers for a reason--eventually they figure out that the numbers don't pencil out.

Lyft at least allows passengers to tip their drivers, which is helping them attract and retain drivers, at least in the short run. But when you underpay your drivers by 50%, a 15% tip isn't going to make a meaningful difference in the long run.

Francis Marx's picture

how is the turn over for the cab companies since you have this all worked out?

By the way, my cousin works Uber and does pretty good.

U4 eee aaa's picture

Anywhere there are owner operators there are going to be people too stupid to price the cost of the vehicle in. That is what companies count on as those people come in and underbid and undercut the people who can actually use a calculator.

It is a highly unethical business practice for companies and it is very short term thinking

sparksmass's picture

Maybe it's an expensive business because every time you get into a cab, you are paying for a car and a driver AND a multi-hundred thousand dollar 'license'?

alangreedspank's picture

Taxi is expensive because of regulations the taxi industry imposed on itself. They could just lobby to have them removed if they don't like them anymore.

RedBaron616's picture

Businesses love government regulation because it insulates them from competition.  They actually lobby for them.

RagaMuffin's picture

What are you more terrified of riders having a choice, drivers having a choice? Limiting competition sounds like empire building 101 from the Oligarchs handbook.  MDB is that you?

Buckaroo Banzai's picture

It's just (((free markets))) at work, goy!

There's free markets, and (((free markets))). It pays to know the difference, friend.

Augustus's picture

Uber allows individuals to become voluntary part time workers who determine their own schedule.  The people who choose to do it, and continue to do it, are not particularly stupid.  If they had opportunities to earn brain surgeon incomes by performing an operation upon you, I expect they would do that instead.

 

As to the pricing of Uber services, I note that Uber has been and continues to be a money pit with continuing large losses at the corporate level.  Seems unsustainable to me.  The individual drivers must find it rewarding enough to continue to pick up the passengers.

RedBaron616's picture

Not workers, as in employees, but as independent contractors, which is sheer nonsense. It needs to be stopped because Uber and Lyft don't pay ANY benefits this way and essentially screw their employees. The employees are too stupid to realize they are being screwed, otherwise they would quit.

sparksmass's picture

Uber fares are only slightly lower than taxis in most markets, and in some cases more expensive.  How is 'constructively' limiting competition a good thing for consumers?  It's Uber's fault that people that want to work for them are stupid?  Entrenched taxi cartel with 'medallions' or 'licenses' going for hundreds of thousands of dollars, or over a million in some cases, does nothing for consumers and needs to be shaken up.

Buckaroo Banzai's picture

But you miss the point. No, it's not Uber's fault that their drivers are stupid, but eventually those drivers are going to either smarten up and quit, or wind up both broke and stupid, and that'll be the end of that. At least until Uber manages to drive rental car businesses and local taxicabs out of business. Then drivers will be marginally better paid, and the public will be absolutely raped by oligopoly pricing.

We can agree that local taxi businesses--and the corrupt and lazy politicians that regulate them-- probably needed a kick in the ass in many jurisdictions. But at least local taxi businesses are economically sustainable, and (via your local politicians) can at least theoretically be held responsible to the public interest.

Regulating common carriers is just common sense. Yes there will be some inefficiency and corruption, as there is in any human endeavor involving government. But very careful of the alternative. We are seeing the consequences of unregulated common carriers in the internet right now, as Twitter, FaceBook, and ICANN have proven to be extremely abusive and onerous monopolies.

Francis Marx's picture

"Uber fares are only slightly lower than taxis in most markets"

How do you figure? I can pay 40$ to a cabby to go to my airport or pay a Uber $8-9.

sparksmass's picture

Where do you live?  Something wrong there.  I also beleive Uber underprices airport trips to create just the kind of headlines and word of mouth that you speak of.  Average Taxi pricing is between 0.9 to 1.7 times that of Uber.   http://www.businessinsider.com/uber-vs-taxi-pricing-by-city-2014-10

Badsamm's picture

Uber shows up when I order a car. When taxis figure that out, we can talk

RedBaron616's picture

Constructively limiting competition and regulating vendor behavior can actually be economically useful.

Yes, in a very anti-free market, monopolistic kind of way.

Monopolies are never good except for those who hold the monopoly. This is NOT what governments should be creating.

GunnerySgtHartman's picture

Uber may "be a piece of shit and deserve to die," but if so it should die under the weight of a bad business model, incompetent management, and financial losses.  This is another example of government picking winners and losers, with the general public being the "Biggest Loser" of them all.

porcsale's picture

You make good points. The thing with the taxi industry in Quebec though is that the number of taxi licenses there are is fixed. This was a prime opportunity for the government to use the leverage Uber was providing them to abolish the current system of taxi licenses.

It's not normal to have to take a mortgage to drive a cab (in Quebec, you have to buy your license from someone and it's often more than 130,000$). It's only pushing prices up so that a very small number of people can profit from the work of others.

Uber has problematic pratices but the attitude of the government is worse here. They're essentially bargaining the support ($$$) of a few very wealthy license owners against the welfare of consumers.

 

 

FringeImaginigs's picture

Every business works within society. It is fully proper that the government regulate activities for the best interests of all its citizens. Having a minor training program, proper background checks and regular inspection of vehicles is hardly an operessive measure. No, Uber would rather have untrained drivers, uninspected vehicles and questionable background checks. That's hardly an advance in technology. It is a regression in our societal standards. 

Francis Marx's picture

Un-trained drivers haha...

What is a trained driver ?

Second, what does it matter if a car is inspected??? Inspected cars can get slammed just as easily as a non-inspected cars.. oh..too funny...

RedBaron616's picture

Sorry, Uber wants employees, but wants to call them independent contractors. Talk about suppression and oppression.

garypaul's picture

“new and challenging regulations that favour old policies instead of incorporating the benefits of new technology..."

Well, they're not really new, but more to the point:

Does the pilot of the newest jet fighter plane need to fear an old outdated jet fighter? If so, there's something wrong with the newest fighter plane.

(a sloppy analogy but I think you get the point)

oddjob's picture

I wonder how much fuel is bought by UBER drivers through Couche-Tard at one of its 7200 locations in the U.S.?

Dominus Ludificatio's picture

Like those idiots would even know who owns gas stations.

FatTony7915726's picture

Larent Lessard , the Minister of Transport in Quebec is the most incompetent person ever.  He was responsible for the Highway 13 blockage with a snowstorm that trapped more than 300 cars for 48 hours causing death and injuries.  He and his Transport Quebec minions messed up so big, that tow trucks and snow plows could not get to the trapped drivers!  Laurent Lessard is the most hated Minister in Quebec!!!

 

Laurent Lessard went to bed the night of the storm which was a major storm.  Instead of being in a command center with Transport management, he went to bed and counted sheep.  Very poor Emergency Management Administration on his behalf!

 

https://www.youtube.com/watch?v=oUa1VwXt33U

Expat's picture

This anti-Uber movement is pathetic.  I live in the most expensive taxi city in my country.  I also lived in the UK for a long time.  Uber is a god-send.  Sure, the drivers are not trained as well as black cab drivers, but who cares?  Every single Uber I have taken has been equipped with GPS.  Every driver has been courteous and professional.  And it costs one-quarter to one-half regular fare. 

All the press about Uber drivers raping, robbing and murdering are bullshit.  I had friends in NYC who were robbed by cab drivers, something about as rare as an Uber driver robbing a customer.

Whether or not the business model works is another story.  sorry to see the forces of monopoly and bribery killing off an interesting busness.

Buckaroo Banzai's picture

>And it costs one-quarter to one-half regular fare.

Those low fares are being subsidized by a multi-billion-dollar venture capital (((war chest))).

Let's see how long those "low fares" last once the competition has been wiped out. And don't tell me that Lyft is "competition". There's going to be room for two or three national rideshare companies at most, and once they have crushed the rental car and independent local taxi companies, you'll see oligopoly pricing that will literally make your teeth hurt.

Why is this so difficult for people to understand?

sparksmass's picture

You mean oligopoly pricing like the taxi cartels had until Uber came along?

Martian Moon's picture

Quebec

The highest taxed jurisdiction in North America, where tax auditors get a cut of the booty

If you can't tax it kill it, should be the local motto

Soph's picture

...or fund it along with the rest of their social net via Transfer Payments from Alberta.

Martian Moon's picture

If Quebec could tax Martians it would

They ream this Martian daily, I literally have no clue why I bother going to work in the morning

johnnycanuck's picture

Puleeze, not that poor Alberta beast of burden schtick again.  Ontario carried the transfer payment system for almost it's entire existence until Harper's dutch disease struck.