Taxi cabs lined up on Front street at Union station in downtown Toronto Canada
Toronto city council introduced an unexpected motion to temporarily limit the number of licenses issued to ride-share drivers in the city. The motion will cap licenses at current levels in order to manage the city’s greenhouse gas emission levels in the industry.

Toronto City Council has voted to move forward with city staff recommendations to require all taxi and ride-share vehicles be zero-emission by 2031

The city of Toronto has approved a plan to phase out gasoline-powered taxis and ride-sharing vehicles over the next seven years. After Jan. 1, 2031, all vehicles-for-hire operating in the city must be zero emission.

The decision, made by City Council this month, leans into the city’s broader TransformTO Net Zero Strategy, which aims to reduce community-wide greenhouse gas emissions in Toronto to net zero by 2040.

City staff acknowledged during the Oct. 11 council meeting that transitioning to zero-emission ride-share vehicles by the end of 2030 was an “aggressive, aspirational goal.” They identified several potential challenges such as the lack of vehicle availability, inadequate public charging infrastructure and higher costs.

“The industry needs time to make the change. We would be leaders in this industry, which is good, but, again, it’s challenging to the people having to purchase those cars and make those decisions,” said staff.

To help offset the cost of the transition, the city is introducing a Zero Emissions Grant Program with a $10-million budget. The grant program will allocate funds to taxi, limousine and ride-sharing vehicle owners (like Uber and Lyft drivers) to help them purchase zero-emission vehicles. The grant program will run from January 1, 2024, to December 31, 2029.

“We have an opportunity here to be bold and visionary around climate but to also make sure that we’re bold and visionary on ensuring that what we do here is a just transition to electrification to zero emissions,” said Councillor Alejandra Bravo.

Adding licensing cap

During the council meeting, Councillor Mike Colle brought a separate motion — which was adopted — to temporarily limit the number of licenses issued to ride-share drivers in the city. It caps licenses at current levels in order to manage the city’s greenhouse gas emission levels.

“We’re trying to deal with air quality, we are trying to deal with the climate crisis [and] we’re trying to deal with the city’s attempt to manage congestion,” said Colle, in introducing the motion.

There are approximately 52,000 ride-share licenses for drivers working for companies such as Uber and Lyft in Toronto, said city staff. The industry is responsible for about four to six per cent of the emission on Toronto roads.

Mayor Olivia Chow backed Colle’s motion, arguing that many ride-share drivers are earning less than minimum wage and would benefit from a limit on further competition.

“We need to put a real good framework, a good system in place so that drivers can make a living and that we would have a good system without contributing too much to the congestion and greenhouse gas emission,” said Chow.

The motion passed 16-7, but not without dissent from some council members.

Opponents including Councillors Shelley Carroll, Brad Bradford, and Jaye Robinson, who said the proposal goes against city staff recommendations and was being done without consulting ride-share companies. They argued this expose the city to legal action, increased ride prices and have negative equity impacts.

In support of the motion and in response to these concerns, Councillor Gord Perks said, “Sometimes as a government, we have to take on powerful interests who are capable of going out and hiring high-priced law firms and fighting tooth and nail so that their interests are protected and not the interests of the people that we represent.”

Uber and Lyft respond

Following the council’s decision, Uber released a statement saying the company is “reviewing all legal options.”

In a statement sent to Electric Autonomy, Uber says the company “fully supports the city staff report and all its recommendations transitioning the vehicle-for-hire industry to net zero emissions, including a mandate of 2030 and a grant program to support drivers make the transition.”

However, the vehicle cap “will ultimately hurt the diverse group of Torontonians who rely on rideshare as part of their transportation mix and those who drive rideshare for additional income, especially in a time of rising costs.”

Lyft echoes Uber’s position on the licensing cap, stating that it also fully supports efforts to electrify ride-share vehicles, but that “instituting a licensing cap without any research into its implications is counterproductive and will do little to improve congestion downtown.”

“Toronto is still recovering from the impacts of the pandemic, and as demand for rideshare continues to rebound, a cap at current levels will inevitably drive up rider fares and wait times. It naturally pulls drivers into the city’s busiest areas, exacerbating traffic and limiting transportation options for those living outside the city center.”

“I would also say a cap cuts off a flexible earning opportunity for those dealing with record inflation by denying them the ability to sign up and drive on the platform whenever is right for them,” says CJ Macklin, senior communications manager, Lyft in an email to Electric Autonomy.

The vehicle cap will stay in place until a comprehensive report from city staff assessing the impacts of the vehicle-for-hire industry on emissions, congestion and public transit. That report is expected to be complete by the end of 2024.

New license registrations for zero-emission vehicles are exempt from this cap.

1 comment
  1. The exemption should be sufficient for Uber and Lyft as they have been promoting the use of EVs on their platform. Also, as self-employed drivers, those drivers need to speak to their CPA about the very lucrative federal tax credit for EVs, beyond the Federal rebate. There is a very high tax write-off available that can amount to a significant portion of the cost of the EV.

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