As Edmonton taxi drivers feel a cash crunch, industry seeks first fare increase since 2007

Parminderjit Singh once considered his taxi plate a ticket to retirement.

Singh said he bought his plate — the licence required to operate a taxi in Edmonton — for $190,000 In 2012.

He's attempting to selling it for $30,000 but says he will be lucky to get that price today.

"Most taxi drivers are very frustrated," he said. "The price is nothing and there is no income. 

"It's very hard to make money in the taxi industry. It's not easy right now." 

Singh has watched the licences depreciate in value over the past decade. He doesn't expect any driver in the city will ever see a return on investment in the city-issued permits.

The city sets the price of a licence at $423 but isn't issuing new ones and the number of available licences is capped.

Because of that, the market for the licences saw values soar to more than $200,000 as of 2015.

Ads currently posted on social media show plates are being offered for as little as $25,000. 

Singh fears the industry will die out. 

"I don't think there is any future for the taxi industry," said Singh, who drives for Yellow Cab. 

"Many people are trying to quit because there is no future."

Drivers now selling their plates for a fraction of what they paid say the cost of doing business — and competition on the streets — has become increasingly unsustainable.

Taxi drivers have been left struggling to turn a profit because of a range of factors, from the proliferation of Uber to inflation, skyrocketing gas prices and lingering impacts of the pandemic.

Taxi fares in Edmonton have not increased since 2007. 

Cab companies are now asking the city for a fare increase to bring rates in alignment with higher operating costs and to encourage drivers who parked their cabs during the pandemic to get back on the road.

The city says it is collecting data from local operators, and that a comprehensive fare review is underway, the first in 15 years.

Under the city's vehicle-for-hire bylaw, plate-holders who leave the business are allowed to sell their plates instead of returning them to the city.

The cap on the number of taxi plates that can be issued is 1,235 regular taxi licences plus 95 more for accessible taxis.

The number of active permits has fallen in recent years and the city says demand for new plates petered out as ride-hailing services moved into the market.

I can't make enough money. Every expense is going up.- Jahirul Alam

Yellow Cab driver Jahirul Alam, 49, is hoping to sell his plate for $32,000. He bought it for $200,000 seven years ago. 

"Now, it's worth nothing," he said. "I was thinking that I had invested — and when it came to retirement — I could get something but unfortunately, that did not happen."  

Alam pays about $2,000 to his company each month in insurance and dispatch fees. He also pays annual city licence fees of around $400, plus maintenance costs and twice-yearly mechanical inspections. 

COVID-19 saw customer demand plummet and the rising price of gas is undercutting his profits, he said.

After expenses, he said, he usually takes home $350 after a 60-hour work week.

Since Uber drivers hit the streets, there is too much competition for fares, he said.

Following a series of protests by taxi drivers, Edmonton city council voted to legalize the ride-hailing company in 2016, making it the first Canadian municipality to do so.

"Nowadays, there's not much business. I drive day shift, I drive night shift and I don't find riders," Alam said. " I can't make enough money. Every expense is going up."

Greater Edmonton Taxi Service Inc. operates Yellow Cab, Barrel Taxi, Checker Cab, Capital Taxi, 24-7 Taxi Line, Sherwood Park Yellow Cab, Leduc Yellow Cab, Prestige Limousine fleet and the Skyshuttle airport service.

Company president Phil Strong says increasing fares would help drivers maintain a steady income, and help companies retain them.

Strong said the changes would also help the industry compete against Uber and other ride-hailing companies that can change their prices at will.

Pricing pressures

Cab company operators formally applied to the city for a fare increase in March.

Strong declined to say how much they are seeking, but pointed to a recent increase granted in Calgary. Calgary's maximum metered rate has now increased by 15 per cent, the first regulated increase to taxi fees there in eight years.

Strong said operators are asking for a slightly larger percentage increase than Calgary but rates in Edmonton would still be cheaper.

As part of the application, operators are also asking the city to institute annual pricing reviews.

Metered rates in Edmonton start at $3.60, plus 20 cents for each additional 135 metres travelled. Waiting time is charged at 20 cents for every 24 seconds, equivalent to about $30 per hour.

During the worst months of the pandemic, as business virtually ground to a halt, many drivers stopped working, Strong said.

Staffing levels at his operation dropped to around 15 per cent of pre-pandemic levels. Now, only about 70 per cent of his regular drivers are on the road.

Strong said drivers are slowly returning to the road and he feels optimistic the industry can bounce back, especially if fares increase.

"It should be a no-brainer with everything going up; gas, maintenance repairs," Strong said. "There should be no hesitation to give us a rate increase."