The taxi industry in Montreal has undergone significant changes in recent years due to the emergence of innovative companies in the field of mobility and paid transportation. Previously, large companies dominated the market by sharing it with independent operators. However, the limitation of permits issued by the SAAQ resulted in high costs for permits, leading to a system of lease contracts. Regulations regarding vehicle maintenance, driver training, and customer service were also strict.
Over the years, ride-sharing companies such as Amigo Express and Netlift, as well as mobility companies such as Uber and EVA, have emerged, resulting in increased competition for the traditional taxi industry. Some have claimed these companies were not subject to the same regulations and costs as traditional taxi companies, giving them an unfair advantage. However, the Quebec government has taken steps to standardize the rules of the game for all transport providers.
More recently, the COVID-19 pandemic has also impacted the taxi industry in Montreal, leading to a decrease in demand for transportation services in general.
In this article, we will analyze the condition of the paid transport industry in Montreal by reviewing new laws regulating the practice, as well as taking inventory of the actors involved in the Greater Montreal market. We will then discuss the integration of taxi offerings into integrated mobility through the taxi registry and business models that foster a business relationship between taxi operators and trip planners. In summary, the taxi industry in Montreal is facing challenges from increasing competition and evolving consumer preferences, and we will highlight the need to continue innovation to improve service offerings.
Current State of the Paid Transport Industry
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Regulations governing the practice of paid transportation in Montreal
In Montreal, the cab industry is subject to numerous laws and regulations enacted by the Government of Quebec and the City of Montreal. The main laws are the Act respecting transportation services by taxi, which governs cab transportation services throughout Quebec, and the City of Montreal’s taxi transportation by-law, which sets out the conditions for cab licensing, safety standards and rates cab drivers may charge.
The City of Montréal’s motor vehicle services by-law applies to motor vehicle services in general, including traditional cabs and for-hire transportation services. It sets out rules of conduct for drivers, safety standards for vehicles and fare rules. Finally, the Quebec Highway Safety Code applies to all drivers of vehicles, including cab drivers, and sets out rules of conduct for drivers on the road, safety standards for vehicles and traffic rules.
These laws and regulations are enforced by various authorities in Montreal, such as the City of Montreal, the Société de l’assurance automobile du Québec (SAAQ) and the Commission des Transports du Québec (CTQ). These authorities ensure that cab drivers and companies comply with these rules to ensure the safety of passengers and fair competition between market players.
In recent years, new laws have been passed to regulate the new players in the paid transportation industry that were defying existing regulations. Bill 17, passed by the Quebec National Assembly in 2016, provides a framework for the cab and paid transportation services industry in Montreal and throughout the province by establishing operating and safety rules for drivers and passengers. In particular, it requires all cab drivers to register with the Registre du Taxi. Bill 20, passed in 2019, aims to modernize the cab industry in Montreal and other cities in Quebec and make it more competitive with paid transportation services such as Uber and EVA. Bill 21, adopted by the Quebec National Assembly in 2018, has the primary objective of improving the supervision of the financial sector, the protection of money deposits and the operating regime of financial institutions. However, it also contains provisions that impact the cab and paid transportation services industry in Montreal and throughout Quebec. More specifically, Bill 21 is intended to ensure that paid transportation services meet certain safety and quality standards for both drivers and passengers. It is also intended to ensure a level playing field for all transportation providers operating in the city.
These laws include minimum fares for cab drivers, specific training and criminal background checks for for-hire drivers, and reporting of operations data for for-hire transport companies.
Now that the current regulatory situation has been mapped out, it is interesting to analyze who are the main players in paid transportation across the Greater Montreal area.
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Players in the paid transportation industry
As far as the traditional cab industry is concerned, there are currently more than 9,000 registered drivers throughout the island of Montreal, according to the Bureau du Taxi de Montréal (BTM). These drivers are all registered under the banner of a cab operator or a taxi cooperative. The following link MTLTAXI presents all the operators currently active in Montreal, in addition to displaying links to their website and to their cab ordering applications, if available. On the same site, one can also get information on which operators offer paratransit in their services.
The Fabrique des Mobilités Québec recently launched a survey that gathered information on the different cab operators in service, on the specificities of their service offer, as well as on their methods in place to better understand their clientele. For more information and the results of this survey, you can visit our Wiki page on cab valuation.
In addition, the information on the functionalities present in the cab ordering applications of the operators questioned (not all organizations have been questioned yet) is relevant. Here is a table from the Wiki that summarizes the analysis:
As for the other players in the paid transportation industry, the best known in the Greater Montreal area are of course Uber and EVA, a Quebec-based organization. There are also independent cabs and Véhicules de Transport avec Chauffeur (VTC) that offer personal transportation services.
In the case of Uber, an application well known to Montrealers, the company has not done well since 2010, the year of its creation. Indeed, for the last ten years, several scandals have appeared, including harassment, hacking, industrial espionage and arm wrestling with the law. Several investigations have appeared around the world since 2015 on the poor working conditions of the American giant’s drivers, La Presse informs us. In addition, last July, Quebec newspapers learned from The Guardian that the car-sharing company would have encrypted data remotely to thwart Quebec tax authorities and the global scale, according to some 124,000 documents exposing them.
In short, while Uber is dealing with problems with its image, a golden opportunity arises for the cab industry to regain a certain share of the Montreal market by innovating and moving towards an integrated mobility that will allow the visibility of their offer. This approach will be explained in the following chapter.
The future integration of the offer in an integrated mobility
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The Montreal Taxi Registry
The Registre des taxis de Montréal is a database based on the French open platform LE.TAXI that gathers information on cab owners and drivers licensed to operate on the island of Montreal. This database is managed by the City of Montreal, specifically the BTM, and was created to better regulate the cab market and protect consumers.
All Montreal cab licensees are required to register with the Registry and provide information on their cab operations, including the location and availability of drivers on duty, in order to provide an overall picture of supply and demand. Cab drivers are also required to register individually and provide information on their driving experience, criminal history and health status. Today, there are over 4,400 regular service cab vehicles in the City of Montreal connected to the registry according to the BTM. The analysis of the data collected from these drivers will be done by several organizations, including the BTM, Polytechnique Montréal and the Fabrique des Mobilités Québec, in order to propose new functionalities and urban mobility solutions that will benefit the entire industry.
The Montreal Taxi Registry is used by municipal authorities to control and regulate the cab market, notably to enforce safety and fare regulations. It is also used to manage consumer complaints and for cab licensing.
The registry presents several positive points for all the actors it impacts. The added value for the city of Montreal is to optimize the distribution of the cab fleet throughout the territory to respond more effectively to the demand. For citizens, this tool will reduce waiting times to increase satisfaction and strengthen user loyalty. For intermediaries in the passenger mobility sector, access to new data will improve the process and attract new business opportunities. Also, the registry will have a positive impact on the environment by reducing the GHGs emitted by cabs, thanks to the optimization of drivers’ trips, in addition to promoting the reduction of car use in the Greater Montreal area.
The cab registry is definitely one of the tools that will allow the traditional cab sector to ensure its place in the supply of passenger transportation and to remain at the forefront of the urban passenger mobility sector of tomorrow. A concrete example of the registry’s application is the integration of data into the popular travel planners of the Greater Montreal area. However, there are some bottlenecks that do not allow the rapid implementation of this information, especially because of a business model that must satisfy both parties in this business relationship in terms of development costs and benefits.
- Integrating cab supply into travel planners
Integrating cabs into planners requires a business model that is both beneficial to planners in terms of generating attractive gains, but also to cab operators who may not be willing to put their hands up without knowing the potential benefits of such integration. Some examples of gains for planners in integrating the cab offer are: gain in terms of user data, gain in terms of usage and financial gain.
The existing business models identified are multiple and will be explained in the next sub-chapters.
Cost per impression : This is a model based on the views of the integrated cab offer where the planner who integrates the solution receives royalties for each print (1000 views). However, this business model would be complicated to implement in Montreal, due to the large number of cab operators operating in the city.
Cost per installation : This is a business model based on the installation of cab booking applications where the trip planner receives a payment each time an operator’s application is installed by a user following a deep link* in the trip planning application.
*A deep link is a hyperlink that points directly to a specific page in a mobile application, rather than to the application’s home page.
Cost per click : This is a click-based business model where each click on the displayed cab offer generates a cost for the trip planner that is established in the agreement between the planner and the operator. It is the body that groups the operators that will be paid at the end of each month.
Cost per reservation : This is a business model based on cab bookings via schedulers. This model is typically used by Uber when it is integrated with schedulers where the scheduler receives 20-25% of the price of the operated ride for each first booking of a Uber ride by a user.
A paid premium application package : This is a business model where one of the features of the application is paid and only available to the user with a premium membership. The cab offer can then be seen only by users who have paid for the service.
Cost for integration : The trip planner estimates a cost for the integration of the solution. This one-time cost is set for the integration initially, and a monthly cost will also be paid to the planner for maintaining the solution. The planner can estimate this cost based on the complexity of the integration and the time that will be spent working on it.
It is important to ask the question who pays the planner to integrate the cab offer? It was defined that in the Montreal context, it would be up to the operators to pay the planner to integrate their solutions, either via the cab offer with a deep link if the operator has an application or by having the phone number to make the reservation.
As there are several operators in service in Montreal, it is difficult for a planner to have specific agreements with each of them. The lack of a body that groups together all the operators and can sign only one agreement with a planner is highlighted. The BTM is the first candidate to be identified, however, it is a para-public organization that cannot play this role.
It is necessary for the actors involved to continue the discussions in order to reach an agreement that satisfies both parties in order to move forward with the implementation of the cab offer in the planners, which will increase the visibility of the cab and improve the user experience for the citizens in the reflection of the best travel option according to their criteria.
In short,
In short, the Montreal cab industry, having greatly evolved over the last decade, is in a good position to integrate innovative functionalities into their service offering to gain more visibility and customer loyalty. Once well-framed agreements with trip planners are in place, cab operators will be able to initiate experimentation projects that will highlight the strengths and weaknesses of adding the offer to the planners, thanks to the cab’s record in terms of costs and benefits.
This is exactly where the Fabrique des Mobilités Québec, an expert in business experimentation, supports the BTM, cab operators and planners. The goal is to validate the value creation hypotheses with specific use cases on a controlled population by ensuring the collection of opinions from the targeted testers. The next steps of the Fabrique des Mobilités Québec, in this perspective, will be to test via our travel planner FabmobQC some use cases integrating the cab by advocating a business experimentation methodology. We will then be able to communicate the results of our tests with cab operators and other actors in the transportation sector to demonstrate the value that such implementations could bring to the transportation service offered in the Greater Montreal area.
If you want to learn more about upcoming cab initiatives and are interested in becoming a tester, please contact us directly at communications@fabmobqc.ca
Stay tuned for our upcoming communications to ensure you seize opportunities to create a community synergy of ideation for the good of the growth of new sustainable mobilities.