Ride-sharing firms such as Uber are expanding their base by entering new markets. However, this trend has not gone down well with the local taxi operators who see their revenue coming down as they can't compete with low fare offered by the app-based ride hailing giants.
Something similar has just happened in Quebec, a province of Canada. After Uber launched its services in the province, some taxi drivers from Montreal staged protest against the entry and demanded the city to ban the operations. Taxi drivers also approached the court but the requests were turned down.
Now, the Quebec government has come forward to their rescue and decided to compensate those taxi drivers whose business has suffered because of Uber.
According to Montreal-based MTL Blog, a whopping total of USD 250 million in public funds is expected to go to taxi drivers who have seen the value of their permits plummet from hundreds of thousands of dollars to just a few tens of thousands.
The move has kick-started debate whether the government should compensate or let the market decide the pricing on its own. People are arguing that new technologies, industries, and markets replace obsolete services. Workers in older industries have to adapt to changing times.
But instead of investing heavily in a transition to the new industry, the government is handing them cash to make up for the declining value of permits. Only USD 44 million will go toward improving taxi companies to help them compete in changing times, the report observed.
Protest against Uber is not new. Earlier in July, the company had to stop its operations in Barcelona after taxi drivers protested against the ride-hailing firms. They were demanding a cap on private hire vehicle numbers.
In 2016, the app-based firm had faced stiff protest from taxi union in Buenos Aires after Uber said that it was considering bringing its service to the city.