British Columbia’s legal restrictions likely to limit growth of ridesharing

Uber may be the top dog but it looks like Lyft will make it to Vancouver first. Ridesharing services were previously blocked in British Columbia due to provincial restrictions. But, with applications opening this month, it looks like the region is about to join the ridesharing revolution. 

Uber, Lyft and other ride-hailing companies have started submitting applications for passenger transportation licenses. The first tranche from those granted licenses is expected to hit Vancouver roads by Halloween, according to Richmond-Queensborough B.C. Liberal MLA Jas Johal. Nonetheless, a variety of restrictions may cause companies to limit their services to urban Vancouver. 

While both Lyft and Uber are operating widely in the United States, the services have been slower to launch in Canada. Government regulation has largely kept the upstarts in check. Though Uber, in particular, was initially willing to enter markets without concern for regulations, both companies are now much more careful about working with local and regional governments to ensure smoother launches.

Ridesharing regulations in British Columbia

The regulations that will be applied to the industry are not yet clear. However, one major requirement is likely to limit how widely new companies launch in the region. Though in the U.S. ridesharing drivers simply use their everyday driver’s license, British Columbia is requiring drivers to obtain Class 4 commercial driver’s licenses. Such licenses are relatively limited due to the need for “higher driving exams scores, additional tests, and a doctor’s exam.”

Lyft, if granted a license, its service would likely be available only in the city of Vancouver itself. The quality of ridesharing services is, in part, dependent on having a large number of drivers available across all areas served. Since drivers will initially be limited in number in British Columbia, Lyft said that a broader launch might lead to service that is lower in quality than in most areas in which they operate.

British Columbia regulators are considering other restrictions as well. It is possible that vehicles will be limited to specific areas, that pricing will be limited to highs and lows set by the government and that the number of licenses per company will also be limited. 

Supporters and competitors

Supporters of the emerging sector have organized a group called Stranded BC which is lobbying to lift commercial license requirements. Representatives of Stranded BC maintain that requiring commercial licenses will not increase safety to a significant degree. They also claim they will limit the growth of ridesharing. But such limits will not only undermine the business opportunity for both the companies and the drivers. It will also make it unlikely that the services will be available as widely as needed.

Once launched, ridesharing services in Vancouver will face competition from each other as well as a robust range of transportation options, including public transit and traditional taxi services. Vancouver’s ever-growing Chinese speaking population is also served by a so-called “grey-market” system of unregulated ridesharing operators. It is estimated that grey-market operators number in the thousands and are generating revenue in the tens of millions.

Ridesharing will face many established competitors (Source)

To some degree, the existence of these underground services confirms that ridesharing could be a huge industry in Canada. However, some folks in Vancouver do not look forward to the growth of ridesharing. They appreciate the current range of options. The usage of public transit continues to grow as does biking and car-sharing. In fact, car-sharing services, which allow for members to rent cars “by the minute, hour, or day,” are also supported by dedicated parking options.

Balancing the downsides and upsides

In the U.S., the growth of ridesharing has undermined such options, most notably public transit. Studies are also showing that ridesharing services lead to increased congestion in urban areas. They also often put less experienced drivers on the road for more hours. Yet, the convenience of ridesharing is widely acknowledged. After all, it still increases the mobility of those who do not own vehicles or wish to limit their usage.

It seems clear at this point, barring unforeseen requirements that create additional obstructions, that ridesharing is coming soon to Vancouver. Not only does the city have a profitable mass of potential riders but it also already has numerous potential drivers who already have commercial licenses. But as long as the requirements remain as restrictive as currently envisioned, the likelihood that ridesharing will be available beyond Metro Vancouver is highly unlikely for the foreseeable future.