Uber concerns slash taxi industry share value in Vancouver
Taxi shares in Vancouver used to be worth as much as $400,000 – but now no one is buying them at any price, says the president of the largest fleet in Vancouver.
Yellow Cab’s Kulwant Sahota blames the sudden shift on uncertainty around the arrival of ride-hailing apps like Uber, as his industry struggles to adjust to new technology.
“There is panic in the industry as to what the future is. There are no buyers,” said Sahota.
Sahota says he’s rapidly modernizing the fleet, by including a new Yellow Cab app that can hail a cab automatically over the phone, and tying in with an international app known as eCab.
He’s also hoping that the city and the province will grant more cabs, to reduce delays and restore confidence in the industry.
The soft market could portend the plummeting values that have been seen in other cities where Uber has arrived, such as Toronto. Uber drivers have not applied for city licenses, and are picking up passengers anyway, with drivers there accusing the company of breaking the law.
Reports say Toronto cabbies’ license values have dropped from some $360,000 in 2012 to below $100,000 this year. Cab drivers protested in that city this week. Tensions were so high that a cabbie was dragged for 20 metres by an Uber driver.
It’s the same story in New York City, where the value of the medallions there were once $1.32 million – cut in half after the arrival of Uber, to $740,000. In Boston, licenses that were worth $700,000 in 2014 are now around $400,000.
Sahota estimated that there are between 60 and 70 shares of Yellow Cab on offer, which would normally be bought by drivers hoping to build equity or investors, but they haven’t been sold.
Other cab companies wouldn’t comment on their shares, though the Vancouver Taxi Association’s Carolyn Bauer estimated there were some 120 shares across the four companies of Vancouver Taxi, McLure’s, Yellow Cab, and Black Top Cabs.
Generally, one share translates into the right to operate a taxi for a 12-hour shift each day. Two shares is a full cab, though there are other assets associated with the share as well.
Bauer estimated that there is $500 million of debt with those share values as collateral across the industry, with owners worried about the value of their investment.
Right now, Uber has not applied to operate a taxi service in B.C., in part because its application through the Passenger Transportation Board might be doomed by opposition from existing taxi companies. B.C. and municipal officials threatened tough fines and undercover investigations if Uber drivers were to start without a licence, as has happened in other cities.
In an interview Transportation Minister Todd Stone wouldn’t give details about his plans for the industry, except to say, “Ride sharing will come to B.C. eventually.”
Port Coquitlam Mayor Greg Moore told CTV News that he supports Uber coming to B.C. and says he wrote a letter to Stone encouraging him to allow competition in the taxi industry.
“I’ve used Uber around the world, and it works phenomenal. I think the taxi industry can learn from what Uber is doing,” he said.
Uber sent out a message to an e-mail list Friday, asking recipients to call Suzanne Anton’s office and push for the service to be allowed.