Uber Comes to Ottawa, but City Hall Threatens Fines

October 2, 2014 Updated: October 2, 2014

OTTAWA, Canada—Uber started rolling out its service in Canada’s capital city Ottawa on Wednesday, but not with a warm welcome from the city.

Ottawa said Uber needs licenses—three kinds at least—for drivers, their vehicles, and for dispatching cars. Without those, Uber will be violating bylaws, said Susan Jones, general manager of Emergency and Protective Services for Ottawa.

“It is the driver that is going to be charged … so they are going to bear the penalties,” warned Jones.

She said the city will partner with local police to investigate underground taxi services. Under the Highway Traffic Act, fines can reach $20,000.

And if the city does use undercover officers to bust drivers?

“If the city wants to exert time, effort, and energy with these so-called sting operations then that’s rather unfortunate,” said Jeff Weshler, the general manager of expansion for Uber Canada.

“We’re looking forward to working with the city and innovative policymakers so that Uber and ridesharing have a permanent home here in Ottawa,” he said.

Uber Strategy

Uber has so far virtually ignored the city’s call to get licensed and is moving forward despite a request from the city that it not. It is a strategy Uber has employed elsewhere—sometimes in the face of cease and desist orders, like in Virginia, and sometimes by leveraging support from its users and sympathetic legislators to change the rules, as in California.

When asked if this was part of their strategy, Weshler dodged the answer.

“Ridesharing is a new technology. We have collaboratively worked with cities,” he said.

Weshler and Uber focus on what they offer—a cheaper alternative to taxis, an option that makes full use of a GPS-equipped, smartphone culture.

Rather than hailing a cab, calling, or walking over to a taxi stand, users request a car on the Uber app and watch it arrive via GPS tracking. The cars are slick and the service considered a step up from regular taxis—and all for a better price. Rides can be as much as 40 percent cheaper than a conventional taxi in Ottawa.

Changing Culture

If Weshler seems reluctant to acknowledge the city’s concerns, the city is also reluctant to acknowledge that the ground has shifted.

Uber is only one of many new services, such as Lyft and Sidecar that capitalize on smartphone technology and the 22 hours a day many cars sit empty.

The city argues it is an issue of safety, and making sure cars and drivers are trustworthy. Uber said it screens its drivers better than many taxi services.

Compounding their differences is a taxi industry warped by a business model that can drive the cost of a taxi license to hundreds of thousands of dollars, with drivers struggling to make decent wages.

Uber’s arrival in Ottawa is likely good for riders, but bad for the status quo.