May 12, 1998

 To:Chair and Members of the

Task Force on the Reform of the Taxi Industry

 From:Councillor Howard Moscoe, North York-Spadina

 Re:Plan to Reform the Taxi Industry

  It will be painful to bring about the necessary reform to the taxi industry but dramatic change is required. There are many who would want us to take immediate action by deregulating and offering "instant" justice. The Council could do so by simply offering a taxi plate to any qualified person who wanted one. To do so would immediately end the rotten system that presently exists and immediately free hundreds of drivers from the wage slavery that ties them to leases and deteriorating vehicles. The Council, however, must be mindful of the fact that the present system exists only because the bylaws are, for whatever reason, the cumulative results of decisions of Council. If the system is rotten, it is because we allowed it to become so.

 Whatever change happens, it should respect the fact that hundreds of people have devoted their lives to working in the industry under the rules that we made. We must bring about changes that give a measure of justice to all parties. Any valid reform should:

 1.Redirect the flow of money in the industry to ensure that drivers receive a fair return for their labour.

2.Eliminate the participation of the passive investor who has no direct stake in the industry.

3.Establish direct lines of accountability.

4.Respect the equity that many have worked their entire lives to build.

5.Remember that the ultimate goal is to provide a decent taxi service to the public.

 It's akin to turning a "Dash 7" into a "Dash 8" in mid flight. The wrong move could have disastrous results.

 I propose the following measures:

 PHASE I

 1.Advise all present owners that their plates will be grandfathered.

In the case of individuals they can continue to hold them for life.

They can be passed on to spouses and minor children, but they continue to be the property of the City and must be returned if they cease to be operated by the lessor.

In the case of corporations, they will be grandfathered for a period of not more than ten years.

 2.There will be a designated five-year period in which plates may be sold or leased. After that period the only agencies that will be permitted to lease out plates will be the Council of the City of Toronto, and those who hold grandfathered plates.

 3.The Council will offer to lease back plates from any owners. For the first two plates leased back, the City will pay $500 a month, for the second two $400 a month, for the third two $300 a month, and for the remaining $200 a month. These payments would be guaranteed for life to individuals, their spouses and minor children. Plates held by corporations and numbered companies would be non-transferable, and in the case of corporations or numbered companies the payments would terminate after a fixed period of time (say ten years).

 4.The City would in turn lease the plates to drivers, from the drivers' list, for $500 per month, on condition that:

 a)The person who leases the plates must hold a valid taxi driver' licence.

b)That person must drive the plates himself/herself, as their principal occupation. They can hire a second shift driver, but no more than one other.

c)If at anytime they cease to fulfil (b) they must return the plate to the City for re-lease.

 4.The owners' list would be abolished and the drivers' list would continue.

 The net effect of these rule changes would be to immediately drive the lease rate down to $500. a month. It would also protect equity for present owners. The plate value would be set at $500. x 12 months x 5 years = $30,000, i.e., the amount that one could derive by leasing back the plate to the Commission.

 Large fleets would start to be broken up, restructured, and sold to individuals. The average fleet size would drop to two vehicles. Sales would be in the $30,000+ range, making them affordable to the average driver and it would be a safe investment because of the Commission guarantee. The guarantee would also make financing the purchase of a vehicle easier.

 Present large fleet operations would retain some of their equity and could then focus on providing services to the industry on a competitive basis:

Vehicle repairs, pre-inspection, insurance services, car sales or leasing.

The passive investor would be squeezed out, the large fleets broken up, the equity for all would be protected, but particularly the retiree would be protected and drivers would be able to earn a decent living for their efforts.

  How are the interests of the public protected by this plan?

 1.Newer vehicles.

2.Safer drivers. Drivers would not have to drive at breakneck speeds to earn enough to make ends meet.

3.Driver safety would be enhanced. The best safety measure for drivers is experience. There would now be some incentive for drivers to stay in the industry.

 PHASE II

 The City would establish a ATaxi Industry Benefits Reserve Fund@. Any net profits from the lease of plates, if we can find a legal way to do this, would be deposited in the fund, this money will be available to establish a driver administered benefit fund, to provide things like OHIP, extended health, dental insurance, or even a pension fund.

 If the City is paying $500 a month and re-leasing the plates at $500 a month, the balance will be zero. Fleet leases at $400 and $300 may bring a small amount into the reserve, but most fleet plates will end up being sold. If there does come a time when it is possible to issue new plates at $500 a month, there could be a revenue stream. This benefit should flow to the industry, not the City=s budget.

 If we cannot legally establish a benefit fund, then these reserves should be used to write down the license fees.

 HOWARD MOSCOE

City of Toronto Councillor

North York-Spadina