How Uber is Taking Toronto’s Taxi Business by Storm


In 2012, one taxi license in Toronto sold for $360,000 and this dropped to $153,867 in 2013. One year later, the cost of a license fell even further to $118,235.

The main reason behind the decrease in price is Uber, the online ride-sharing service that lets you order a ride from your smartphone. By the looks of it, Uber is ending the dirty dealings behind Toronto’s cab business.

“Among the key players was Mitch Grossman, a businessman whose family had collected more than 100 plates. These plates gave Grossman a pharaoh’s power.

If a driver wanted to use one of his family’s plates, Grossman could force him to buy an overpriced car from his sales operation, finance it through a family firm called Symposium Finance (where rates reached 28 per cent) then join Royal Taxi, the Grossman family’s taxi brokerage.”

The report notes that other taxi plate holders included an airline pilot, a dentist, and investors from the U.S. and Israel. At least 30 percent of the industry’s income went to people who did nothing but sit and watch the cash flow in from their licenses.

uber x toronto.png

Today, we have a new competitor in the ride-sharing market. Uber looks to be putting an end to the dirty deals behind Toronto’s cab business by offering a service that is quick, convenient, and affordable.

“After installing the Uber app on my iPhone, the screen showed that there were at least half a dozen available cars nearby. The app said I could have a car in five minutes. I touched the icon, and the app announced that my car would be an Acura TSX, driven by David.

David and the Acura appeared on schedule. The car was nearly brand new, with a leather interior. I asked David about his job. He was a student, and paid his tuition by working for Uber. The setup was straightforward – David had gone into the Uber office, undergone a background check, had his car inspected, and set up a company account.”

When you use Uber, the fare is automatically charged to your credit card through the app. Uber takes a 20 percent cut of the fare and pays the rest to its drivers. Uber drivers have the ability to work whenever they want and in a good week a driver can easily net $1,000.

In comparison, Toronto’s taxi drivers have to work 12-hour shifts and they have to pay daily rental fees for the car. In addition, the fees for taking a taxi in Toronto are a lot higher than Uber.

If you live in Toronto, have you been using Uber? If so, how are you liking it when compared to Toronto’s traditional taxi service? Let us know in the comments below.

[via The Globe and Mail]

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  • Rob

    Uber takes 30%
    of drivers pay AND doesn’t even care about car, insurances, taxes or
    dues that ARE applicable in this industry (so that comes in addition to 30%).
    If you think Uber takes less % than local TAXIs then you can’t do simple math.
    The whole purpose of Uber is to MONOPOLIZE the industry.
    AND – they are BREAKING LAWS and evading taxes while doing so.
    And obviously – are 1000% lying.

  • MGSayah

    …and eventually when they’ve monopolized the system and got every legislation on board, they’ll crank up the price like they do with “surge hour”. Or simply replace all car drivers by self-driven cars (Google Venture backs Uber…)

  • FragilityG4

    Effectively they will become the very same taxi system.

  • Chrome262

    As long as they break up the taxi system don’t care what happens afterwards. I never use taxis and I don’t own a car. I use public transit way cheaper. Hell its cheaper to rent a car. Taxis just cause more traffic problems, increase accidents, and are a danger to pedestrian.

  • einsteinbqat

    Uber is just like car sharing. Do you or your friend or whomever gives you a ride to whichever place you need to go care about the insurances, taxes or dues that are applicable? The person that gives you a ride, why is s/he not considered a competitor to a taxi driver? That person does take you from point A to point B, does s/he not? Perhaps it’s going to be a free ride for you, but it would not be surprising for you to pay the petrol/gas for your ride, or offer to pay lunch or dinner as a thank-you for the service? Now what is wrong with someone who decides to start a business that easily connect two persons: one who is willing to give a ride, and one who needs one?

  • 1His_Nibs1

    Well considering the driver & having to listen to the radio in their native tongue & not even being considered enough to have the driver offer you another radio station or turn it off altogether, the B.O. and possibly an accent so thick you can barely understand, I for one, welcome the day when a driverless car is the norm. I’m the one paying the fare and most of the time taking a taxi is not a very pleasant experience.

  • Aleks Oniszczak

    When Uber starts jacking up the prices, other companies like Lyft and SideCar will be more than happy to come in to compete with lower prices as they already do in other cities. Cabs could also try to compete with Uber by lowering their prices to something a little less ridiculous and providing better customer service, but they probably won’t. So good riddance to them.

  • Rahul

    You wrote an article without knowing anything about the taxi industry and how Uber scrowing the passenger, drive and you

  • limotalk

    The Canadian government should take serious notice and take an action agaist Uber or its going to be what happened in France and other countries of the world. Uber will destroy the local taxi industry that would affect canadian economy.

  • limotalk

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  • limotalk

    check what happen with uber passengers

  • GN

    How do you think Uber is so reliable where they always have a car ready for you in less than 5 minutes? They use Surge pricing when there is a higher demand for cars. Don’t like it? Don’t order an Uber. Feel free to get sexually harassed by one of many Toronto’s fine taxi drivers.

  • GN

    Rather than ‘take an action agaist Uber’, the government should regulate Uber and the Taxi industry to new standards where it’s fair and allows for open competition. Who the hell are you? Do you even know how the world works?

  • Tim Tripp

    Still haven’t made up my mind about Uber, but something needs to shake up the taxi industry in this city. The last time I took a cab across town, the driver had no idea there was a parade going down Spadina Avenue, and asked *me* what to do!

  • limotalk

    Uber sexual harassment cases check out Uber sexual harassment in India, France, UK and USA and you will see how uber is so reable and safe.
    If you love to use uber good for you but in general its affecting the economy.

  • limotalk

    The new york mayor is trying to pass a bill in new york to restrict the number of drivers by a company. As the traffic in new york is worse these days and more incidents comparing last year. normal taxi drivers are trained and they actually know how and where to ride.
    However when the bill is up for voting, uber has launched a propaganda campaign against the mayor because they dont want to play by the rules. They were banned in south hamptons yet the drivers continued to pick up passengers from there now 23 of the drivers may face criminal convictions.
    Who the hell i am… we stand for the rights of drivers and raise their voice and problems… right now what i see how the world is working for uber by paying of politicians and defying laws …

  • limotalk

    and its not just about uber and the people who use uber… what about those drivers who work for uber. Uber raises and lowers prices as they want to and the drivers make nothing from it. The drivers working for uber get below minimum wage …

  • definingsound

    There are too many underused passenger cars in the city, and we need more ideas (like UberX) to more effectively share them.

    Five years ago there were 1M cars in Toronto, and the options to use one within the city on a short-term basis were limited to:
    > borrow
    > rent (minimum 1 day)
    > hire a taxi
    > buy a ttc token
    > rideshare (still the best option, but the hardest to monetize, so these businesses seem to be based on a not-for-profit model)

    The above list is short. It’s short on creativity, usefulness, thoughtfulness, and really short on economic sense.

    That the mobile Internet has allowed us to increase this list of options can only be a good thing. We live in a free market society (despite what the taxi plate-owners have bought into), and we must encourage disruptive technologies. Now we can also:
    > hourly rent (autoshare, zipcar, car2go)
    > hire a driver of one of the 1M cars sitting in Toronto

    This second list is also short. Protests against UberX are, to me, fundamentally anti-free market.

  • definingsound

    If money is still flowing from passengers to drivers, then a disruptive technology simply reallocates passenger fares to a different subset of drivers.

    If an IT firm with a simple GPS-enabled app, can destroy an entire industry, then the industry in question had already destroyed itself – by ignoring (for far too long) available technology that would have improved operations.

  • einsteinbqat

    Why did you accept such a fare? It say “type if you agree”. So, you agreed?

  • crazydriver

    The money is not going into the pocket of the drivers. Drives are barely making minimum wage where uber controls the fares. There is a reason that uber drivers protested against uber.

  • crazydriver

    You must be a real loyal uber drivers or the company pays u to speak for them .

  • Kent

    The article says Uber takes 20%. And the Ontario Superior Court says Uber is legal. You seem to be misinformed.