Uber strategy backfires in Edmonton, provoking taxi advocate to create competitor TappCar
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Pascal Ryffel will lead TappCar in an alternative to Uber and traditional taxis in the city of Edmonton (video screenshot, cbc.ca)

TappCar’s founders see an opening in Uber Alberta’s blunders and now the lights aren’t the only green they might see

In Edmonton, Alberta, Canada, a pro-taxi worker lobbying organization called the Alberta Taxi Group recently tried to defeat Uber’s attempts to deregulate personal licenses, cab licenses, and required insurance for drivers. While Uber got most of the deregulation it wanted, a special insurance scheme for ride-sharing companies is slated to go into effect on July 1. In a bizarre twist, the company announced they would — temporarily anyway — halt service in the city because the municipality refused to grant them four months of clemency to operate without that proper insurance.

The Alberta Taxi Group, an effort that lobbying company Alberta Council led after being enlisted by Teamsters to represent local taxi drivers, could have thrown up their hands and declared their fight over. Instead, they decided to launch TappCar: a startup.

TappCar: from drivers’ advocate to drivers’ employer

TappCar's founders went from lobbying for the city's drivers to employing them as a new alternative to Uber. They are also expanding to other parts of the Alberta province (image, courtesy)

TappCar’s founders went from lobbying for the city’s drivers to employing them as a new alternative to Uber. They are also expanding to other parts of the Alberta province. Photo credit: Courtesy

“Alberta Taxi Group was [made] to unite some different factions in the taxi industry in Edmonton who were splintered for various reasons,” Ryffel tells Geektime, “where taxi drivers would contribute a little bit of money to lobby the municipal government to either delay the bylaw, quash it altogether or have influence on what passed.”

While Uber waits out updates to local rules, Ryffel’s squad Alberta Council has launched TappCar, a full-fledged competitor to Uber that will now step in as Uber makes its strategic retreat. It wasn’t Ryffel’s plan to upend Uber, permanently or temporarily. He says all his drivers have comprehensive insurance, so they’ve already hit the road.

“[It started] last summer essentially. That’s where all this started percolating,” Ryffel recounts to Geektime. “We met with some city counselors, had some rallies, got it delayed a couple times. But by December, it was clear the bylaw would be passed no matter what.”

But like a startup trapped in a corner, they pivoted.

“We changed gears a bit because we were still representing the drivers. We asked ourselves, ‘What would be the best way to ensure drivers could compete in a system that would be completely deregulated?’ If we did nothing, the choice was between existing taxi providers or Uber.”

Working on behalf of local drivers left Ryffel and his company with another issue. The grumblings about Uber’s treatment of drivers aside, many customers around the world have complained about not feeling safe in Uber rides, while traditional taxis “weren’t up to snuff.”

“We decided to create a whole new model — if we have a happy driver we can have a good product. So, we went around that premise to see if we could make that work financially. How do we differentiate ourselves from the old players and new players like Uber? Treat our drivers much better and remain competitive.”

The new regulations: licenses, safety, and fees

Edmonton has taken in a number of lay-offs from the stagnant oil industry, which is based in northern Albertan city of Ft. McMurray. That has fed into a good response to TappCar’s recruiting campaign, says Ryffel. New rules require that drivers have a Class 4 license or better, the same needed by conventional taxi drivers. It’s here that Uber probably mis-stepped, as they had demanded their drivers be exempt from needing them. Ryffel thinks that request was absurd.

“The example I always give is, imagine there was an American-based restaurant chain who wanted to come to Edmonton, Alberta. ‘The only way we can operate is if the government lowers food safety standards.’ If someone came in and said that, they [the city] would say ‘No!’ because these laws are there for certain reasons. So, unless you can operate by these standards, you cannot operate here. You look at the existing rules and build your business plan according to those rules.”

TappCar drivers will have two subscription options to operate under the brand. They can either pay a weekly $125 CAN and 15% of all fares, or a flat $250 CAN fee every week. “It’s very competitive pricing,” Ryffel asserts, saying it beats the $600 some drivers pay to rent cabs from other drivers. Having worked with the drivers’ union to start, TappCar is taking their anti-Uber marketing strategy pretty seriously. “It’s kind of a unique situation I guess,” says Ryffel. The drivers will be freelancers, but they will be unionized with a collective bargaining agreement.

“You know there’s no magic to what were doing really. What we have found and what a lot of people appreciate is a business model being respectful, following the rules and crucially treating our workers well. Some people will decide which service to use based solely, purely on what’s the cheapest. There are a significant number of people who go beyond that: ‘Are they respectful? Do they treat workers well? What are their safety procedures?'”

Edmonton: local support, local investment

TappCar rates are slightly more expensive than what Uber advertises for its UberX offering in Edmonton, but CEO Pascal Ryffel is banking on quality

TappCar rates are slightly more expensive than what Uber advertises for its UberX offering in Edmonton, but CEO Pascal Ryffel is banking on quality

Ryffel explains that Uber did have a point with certain things. Besides personal licenses that allow drivers to operate cabs, cars themselves receive licenses to operate as cabs. Until Uber stepped in, there were only 1,300 of those available for 3,000 Class 4 licensed drivers. Some drivers would pay up to $250,000 for a taxi’s license plate.

TappCar and Uber drivers will have to get medical physicals to be cleared to drive and get additional training. When taking the rest of Alberta into consideration, Calgary’s new rideshare bylaws go even further. Rideshare drivers won’t need extra driver training, have no CCTV cameras inside the vehicle, nor have a limit on the number of vehicles permitted to operate in the city.

Yet Uber has not set a date for a return to that city. Calgary made Uber suspend its services in November, then relaxed its rules and legalized using Uber in March, but Uber has since refused to operate in the city. This leaves the door open for its aggressive public relations strategy to backfire spectacularly.

“We are looking at Calgary at the moment and we’ll see expanding there first,” Ryffel told Geektime just prior to an announcement they would expand to Edmonton suburbs St. Albert, Spruce Grove and Fort Saskatchewan. “We want to make sure we don’t move too fast. We don’t want to overextend ourselves.”

The majority of their investors are local, non-venture capitalist types. There is no big money in the operation just yet. They have established some local partnerships for business and are already putting their name on the sponsors’ list for local events. The company hopes they will serve as a boon for the Edmonton startup scene.

“The startup scene in Edmonton is absolutely incredible. We have some great universities here to start with. It really is unique in that it is very supportive of startups and embrace them as their own.”

It remains to be seen if TappCar can take full advantage of the short Uber-less calendar in the city. If it can, Uber might have a rough time reestablishing itself in the city come July. Ryffel is confident though.

“We’re really happy about the response we’ve gotten in Edmonton. [We hit] a kind of the sweet spot in the middle; it’s safe, efficient and easy to use. We sort of hit the nail on the head.”

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  • moeburn

    Wait a second. I’m confused as to how the driver/company relationship works. Either that or the writer of this article doesn’t understand labour law. At one point in the article, it says they’re employees of TappCar:

    “TappCar: from drivers’ advocate to drivers’ employer”

    But then it says they have to pay a flat rate to be listed in the TappCar service, which would mean they’re not employees or contractors hired by TappCar, either they’re like plumbers using the Yellow Pages, or a franchisee.

    “TappCar drivers will have two subscription options to operate under the brand. They can either pay a weekly $125 CAN and 15% of all fares, or a flat $250 CAN fee every week.”

    But then it says they’re unionized with collective bargaining rights, which means they are employees.

    “they will be unionized with a collective bargaining agreement.”

    But then it says they’re freelancers, which means they’re not employees, but possibly self employed contractors hired by TappCar.

    “The drivers will be freelancers”

    So what the hell is it then?

  • Sonny Caponne

    Taxi apps existed years before Uber. Check Taxi/magic, groundLink for limos. I don’t get uber’s ‘innovation’ and the exact reasons why Uber is not following existing laws everyone else follow.

  • Eliyahu Neiman

    “Uber has since refused to operate in the city.”

    Refused? Its almost as though people want them to bring their business model to Calgary.

    Also, a company doesn’t have any obligation to come to a city if they think it’s not in their best interests.