Building a just transition for for-hire drivers

October 3, 2023

Building a just transition for for-hire drivers

Once a pathway to economic security, taxi and ride-hailing jobs have become some of the most precarious in the City, due in no small part to the industry’s deregulation under Mayor Tory in 2016.  At committee, Councillors introduced three measures aiming to ensure a more just transition for the City’s 70,000+ ride-hail and taxi workers who would shoulder its cost (almost all drivers have to furnish their own vehicles).  RideFair is asking environmental allies to communicate support for Councillors’ efforts.

Councillors’ amendments call on the Province to reinstate EV subsidies, direct staff to develop an implementation pathway for targets, and ensure City-led financial incentives can deliver on their intended goals, built on ongoing work to support a more efficient, sustainable and economically secure sector.

It is both a principled and pragmatic ask: if drivers are not able acquire and operate zero emissions vehicles (ZEVs) on the City’s timeline, we could once again see rising emissions from the sector.

Background: What is the City’s plan, and what are the proposals to strengthen it?

Currently, staff’s plan addresses only tailpipe emissions and does not yet contain strategies to maximize sustainable modes of transportation.  It asks drivers to start adopting electric/zero emissions vehicles after 2025 and requires ZEVs by 2030 – a decade and a half ahead of goalposts set for the City’s own fleet (there is an exemption for accessible vehicles and a two-year grace period for plug-in hybrid vehicles only).

Serious climate action targets require detailed and feasible implementation pathways, and there are several barriers to reaching these targets that are neither the fault of gig workers nor within their control identified by staff, companies and drivers.

Ontario and Toronto lag far behind other jurisdictions in electrifying transportation sector, but Ontario is the only populous Canadian province not providing a ZEV subsidy.  Toronto has only 8% of the high-speed chargers it would need to support the industry.  EVs represent 6% of new vehicle inventory; waiting times for suitable low- and zero-emissions vehicles can be years and replacement parts can take months, driving up insurance costs for commercial use.

By contrast, the City’s plan to green its own 10,000-strong fleet extends to 2040, has clear, feasible implementation steps and calls for not only electrification but also improved Fleet management, as the more efficient use of City Fleet assets will “result in reduced costs and better service delivery by enabling transition to simple, reliable, efficient, and equitable services that anticipate changing customer needs.”  Electrification has begun with the City’s light duty trucks, which are being electrified upon replacement, and where operationally feasible (avoiding “stranded assets).  Where not operationally feasible, hybrid vehicles have been deployed.

The Vehicle-for-Hire transition plan needs a comparable implementation plan, with equivalent consideration for operational needs, resilience and socioeconomic impacts.

In this context, Councillors proposed amendments to the plan to achieve Net Zero for Vehicles-for-hire that would:

  • Urge the Province to restore subsidies for ZEV purchases
  • Ask staff to report back on a pathway to reach climate targets by next year, including progress in addressing the infrastructure needed for a Net Zero industry
  • Ensure City-led financial incentives truly help drivers with the cost of acquiring and operating ZEVs, and aligning financial incentives with efforts to reduce driver precarity, lower emissions and facilitate electrification.

Driver precarity remains one of the biggest obstacles to decarbonization

When Toronto de-regulated the Vehicle-for-Hire industry in 2016, it removed all restrictions on the number and type of vehicles that ride-hailing platforms could put on our roads.  Ride-hailing giants subsidized the cost of car-based travel to attract customers, and millions of rides moved out of the TTC and back into private cars every year.  This shift impacted traffic and emissions, but also undermined the economic stability of both our public transit system and vehicle-for-hire drivers.  Once unpaid time and costs are taken into account, drivers routinely earn less than minimum wage.

Staff have proposed addressing driver precarity by introducing a temporary financial incentive.  However, as currently structured, the plan won’t ensure drivers have additional funds to help with the costs of acquiring and operating an EV.  Council is proposing to fix this incentive program and align it with council-approved measures that could also help address drivers’ precarity.

In 2021 Council voted to overhaul this system and optimize its vehicle-for-hire fleets, considering impacts on traffic, on travel choices (TTC vs car) and on drivers’ economic security, to name a few.  More effectively using the working time of existing drivers would not only improve driver earnings but would also impact emissions –  33% of which are currently generated by drivers circulating empty.  We would require fewer cars on the road to service the same business levels, requiring more manageable growth in charging and grid infrastructure.

This approach aligns with TransformTO’s call to consider equity impacts in all aspects of the City’s decarbonization plan, and to encourage shifts to sustainable transportation modes in its transportation plan.

Making sure city-led incentive funds do what they are supposed to.

The proposed incentive plan is funded by clawing back a hardship fund that reduced licensing fees for struggling taxi drivers during the pandemic.  From the perspective of a taxi driver receiving the full incentive, licensing fees would remain the same for two years, and would then begin to rise.  No taxi driver would receive any new money to offset the cost of becoming an early ZEV adopter.

Staff also propose using a portion of the cancelled financial aid for taxi drivers to offset licensing fees for ride-hail drivers on a per-trip basis.  Beyond potential fairness issues regarding this funding model, there is a real financial risk to the city: given the obscurity of ride-hail compensation, it is virtually impossible to ensure these funds don’t accrue to the platforms rather than the drivers.  In other words, City funds originally intended to alleviate hardship for taxi drivers may end up subsidizing the platform giants that contributed to this hardship, and not helping ride-hailing drivers.  It would not be difficult for the City to redesign this program to ensure that any incentives are provided directly to appropriate drivers.

What about speed?

If we are concerned about helping drivers financially make the transition to low- and zero-emission cars faster, the course is clear: we can speed up ongoing work that could make drivers less precarious to begin with.  City-led funding can help – but it must actually deliver new money to the hands of the drivers who need to acquire EVs.

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