By Eryk Bagshaw , CNN Written by
Uber has warned of “potentially dramatic” fare increases and longer wait times following Toronto’s move to freeze new motor vehicle permits for the app-based transportation company . The Toronto city council voted on Thursday to slap a five-year moratorium on new Uber licenses.
During a debate Thursday, Toronto’s Ward 5 Councillor Jaye Robinson called on Uber to “show me the model of sustainability that is going to be profitable for everybody in the city of Toronto.”
The company has faced stinging criticism over the past year, but remains the largest transportation service to operate in the city. The San Francisco-based startup has already lost dozens of drivers over discontent about being treated as contractors, not employees.
According to the Institute for Research on Public Policy, Uber made an operating profit of roughly $210 million on revenue of $2.64 billion in 2016. The company attributed about $29 million of that figure to Toronto.
According to the Canadian Broadcasting Corporation, the average Uber ride in Toronto is about $7.20. Robinson told CTV that the projected increase in fare could reach $20 during peak hours.
But Uber Canada CEO Ian Black said “it will be clear the sky will not fall.”
“I think the reality is that we have to understand that this is a piece of legislation that may, in fact, disappoint a significant number of consumers,” he said.
In a statement, the city’s transportation commission said the freeze will improve transit infrastructure in the region.
“We thank the OMB (Ontario Municipal Board) for its wisdom and agreed to impose the five-year hold on the growth of the city’s ride-hailing companies until they can demonstrate to us that the growth of ride-hailing is sustainable for municipalities like Toronto,” commission chair Andrew Wallis said.
The city’s transportation commission said it is not opposed to increased transportation options, but suggested that more research is needed into the expected public and safety benefits of ride-hailing apps.
“(We) will continue to advocate for additional investments in and the development of transit, priority maintenance and funding dedicated to the city’s overstretched street maintenance system,” the statement said.
Ethan Zohn, co-founder of New York-based viral video collective The Sos, said in a tweet that he would choose Uber as his ride.
“Uber has gotten worse for the worse over the past year,” he wrote. “Every license holder has been affected to varying degrees, and our freedom to connect with consumers in Toronto is now in question.”
“Toronto is a very progressive city, and our drivers want to work in order to help improve the lives of people in this city. We have been working closely with the city and our driver partners to improve the service,” Black said.
The company said Thursday that it would continue working with the city “to develop a better ride sharing platform.”