Taxicab service remains tightly-controlled even at times of high demand,
such as the holiday season
Link to publication: http://www.conferenceboard.ca/e-library/abstract.aspx?did=5897
News release 14-58
OTTAWA, Dec. 17, 2013 /CNW/ - The trucking and taxicab industries have
travelled two different roads in recent decades, reveals a Conference
Board of Canada study, We Have Been Here Before: Supply Management in Transportation.
Deregulated in the 1980s, for-hire trucking has since become larger and
substantially more productive. The taxicab industry, meanwhile, remains
stuck in a restrictive and inefficient system.
"There have been winners and losers in the Canadian for-hire trucking
industry since deregulation. But the sheer magnitude of the
productivity gains, which have contributed to lower prices for
shippers, suggests that there have been more winners than losers," said
Vijay Gill, Director, Policy Research.
"In contrast to the influence of shippers who use trucking services,
consumers' voices are relatively weak when it comes to taxicab
services," added Gill. "Politics favour the status quo — regulation is
fragmented across many local jurisdictions and many customers are
merely visitors who have no stake in local politics. As a result, the
inefficiencies built into the taxicab market lead to higher prices,
more travel when cabs are empty, and increased congestion and
A substantial portion of the savings from productivity gains in trucking
were passed on to customers in the form of lower prices.
The taxicab sector is largely a "supply management" system.
High taxicab licence values increase costs of taxicab trips and
encourage the creation of a black market for taxi service.
The taxicab sector is largely a "supply management" system. The
production/licencing quotas, price controls and trade or jurisdictional
barriers in the taxicab industry are similar to those that govern the
production of milk, chicken, turkey, eggs and hatching eggs.
The values of taxicab licences in Canada are heavily influenced by the
supply of new licences granted by the local municipality. The City of
Winnipeg has not issued new taxicab licences in decades and has one of
the highest license values in the country. The highest license values
are found in the City of Vancouver, which proportionately (to
population) has far fewer licences in circulation than any other
municipality. In Vancouver, it is difficult to find a taxicab in the
downtown core on Friday and Saturday nights partly because of the very
low number of licences in circulation.
The Toronto experience provides an example of an attempt to liberalize
taxicab licences. In 1999, the city created an Ambassador plate, which,
unlike a Standard plate, cannot be bought and sold in the open market
or leased to other drivers. A Standard plate was valued at $80,000 when
the Ambassador plate was introduced. Between 1999 and 2005, annual
Standard plate values never exceeded $100,000.
Since 2006, no new Ambassador plates have been issued. Standard plate
prices more than doubled to $210,000 in 2011. In June 2013, the City of
Toronto proposed a package of reforms to its taxicab industry.
In the Canadian for-hire trucking industry, the launch of new carriers
and increased levels of competition brought some instability following
deregulation. Ultimately, helped by productivity gains that averaged
1.7 per cent per year, the industry grew substantially. Meanwhile,
shippers benefited, as prices dropped in real dollar terms.
This publication is part of the Conference Board's research for the Centre for Food in Canada on reform options for Canada's supply-managed agricultural commodities.
The report, Reforming Dairy Supply Management: The Case for Growth, will be published in January 2014. The Conference Board will host the 3rd Canadian Food Summit: From Strategy to Action in March 2014 in Toronto, where it will unveil the Canadian Food
SOURCE: Conference Board of Canada
For further information:
Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221