Item - 2020.GL19.4

The General Government and Licensing Committee submits the item to City Council without recommendation.

At its meeting on October 27, 2020, City Council adopted MM25.1 - Supporting Taxi Operators from COVID-related Financial Hardship, which directed the City Manager, in consultation with the Executive Director, Municipal Licensing and Standards and the Chief Financial Officer and Treasurer, to undertake a broad review of relief measures for the taxicab industry and report to the November 30, 2020 meeting of the General Government and Licensing Committee, with any financial impacts to the City addressed through the 2021 budget process. Council directed that this review include the feasibility and impact of:

- a 12-month moratorium on enforcement of the age of vehicle provision for taxicabs and limousines, or an extension to the maximum age of vehicle provision for vehicles used as taxicab and sedan limousines by one year

- a reduction to the Vehicle-for-Hire Accessibility Fund Program's regulatory charges

- a 12-month moratorium on licensing renewal fees for taxicabs; and/or a significant reduction or elimination of taxicab licensing renewal fees for 2021

As with many licensed businesses, the vehicle-for-hire industry has suffered financially due to the COVID-19 pandemic. The closure of non-essential business, such as bars and restaurants, cancellation of large events such as concerts and sporting events, and a substantial increase in people working from home has contributed to lower consumer demand for vehicles-for-hire. While the taxicab industry does not currently provide trip data to the City, the Toronto Transit Commission Wheel-Trans has indicated that their taxicab contract has been operating at 35-40 percent of normal capacity (November 2020). Private transportation company trips continue to be down by approximately 65 percent (when comparing March to July 2020 to the same time period last year); however, at their lowest level in April 2020, they were down approximately 80 percent.

This report recommends that any changes adopted by City Council should be consistent for the entire vehicle-for-hire industry (taxicabs, limousines, and private transportation companies such as Facedrive, Lyft and Uber). This is considered an equitable approach, and is intended to mitigate the risk of possible legal court challenges.

Municipal Licensing and Standards reviewed the proposal to place a 12-month moratorium on the enforcement of the vehicle age provision for taxicabs and limousines and determined that this would only support 2013 model year owners. Further, this proposal is considered inequitable, as it would only apply to taxicabs and limousines, and not Private Transportation Company vehicles (such as Facedrive, Lyft and Uber) who have also reported lower ridership during the pandemic, posing the risk of possible legal court challenges.

To support the vehicle-for-hire industry, it is instead recommended that the maximum age of all vehicles licensed under the Vehicle-for-Hire By-law be extended by one year. The proposed change would extend the maximum age of taxicab, sedan limousine and Private Transportation Company vehicles from seven model years to eight model years, for vehicles of the 2013 model year and onward, and the maximum age of stretch limousine vehicles from eight model years to nine model years, for vehicles of the 2012 model year and onward. This change recognizes that all members of the vehicle-for-hire industry have been affected by the COVID-19 pandemic. It would also be a longer-term support, as it is unknown when the pandemic will end and how long it may take the vehicle-for-hire industry to recover.

Staff have determined that this recommendation is feasible given that industry members have reported a decrease in ridership during the pandemic, and since the age of a vehicle is not necessarily linked to its state of repair. Members of the vehicle-for-hire industry expressed support for this proposal as a way to provide relief during the COVID-19 pandemic, in response to a survey conducted by Municipal Licensing and Standards. Taxicab brokerages, limousine service companies or private transportation companies would still be able to implement more restrictive vehicle age requirements, as a business decision.

With respect to regulatory charges for the Vehicle-for-Hire Accessibility Fund Program, Municipal Licensing and Standards worked with the Policy, Planning, Finance and Administration Division to determine that a 75 percent reduction in the monies to be collected from non-accessible vehicle-for-hire members in 2021 is feasible. This temporary reduction would allow the City to maintain the intention of the fund (that is, to offset the higher cost of providing wheelchair accessible vehicle-for-hire service for accessible vehicle-for-hire members), while providing immediate financial relief to the non-accessible vehicle-for-hire industry for one year. Financial impacts could be accommodated through the existing budget due to the City's initial self-funding of the Accessibility Fund Program in 2019 and regulatory charges collected thus far.

Staff also reviewed the proposal for a 12-month collection moratorium on business licensing fees and the proposal to significantly reduce business licensing fees. As mandated under the City of Toronto Act, 2006, business licensing fees are established based on cost-recovery. Therefore, any changes would result in negative budget pressures, and would need to be offset through other revenue sources, or through expenditure control measures during the budget process. To reduce the business licensing fees of one category, and not others is also likely to be seen as unfair by other licensed categories and may lead to requests for the same treatment. Municipal Licensing and Standards licenses and permits 99 different businesses. If reductions in one class of business licence are made, the City should consider reductions in to other licence classes, resulting in further negative budget pressures on the City's budget. In addition, reducing the business licensing fees for one licensing category, but not others, may also lead to legal challenges. 

A broader report on the vehicle-for-hire industry, including responses to outstanding directives, is expected later in 2021.

This report was prepared in consultation with Legal Services, Policy, Planning, Finance and Administration, the Office of the Chief Financial Officer and Treasurer and the City Manager's Office.