A Vancouver tech company that offers a hybrid taxi and ride-hailing service, will apply to operate a traditional ride-hailing arm this fall, despite continuing concerns from critics that it is being given an unfair advantage.
“We launched this spring under the existing regulations,” said Kater CEO Scott Larson. “That was the only way we could go live, but certainly being part of the ride-hailing process in B.C. and elsewhere has always been part of the Kater plan.”
Ride-hailing companies will be allowed to apply to operate in B.C. on Sept. 3.
Regulations on licensing and insurance will go into effect beginning Sept. 16. The Passenger Transportation Board, which will take ride-hailing applications and decide who can operate, is working on policies around boundaries, fleet sizes and rates.
Kater currently operates according to regulations that govern the taxi industry, and uses an app that is familiar to those who have hired ride-hailing services in other cities.
A beta version of the Kater app launched at the end of March. The app is now widely available and the company has 35 cars that operate using taxi licences that were issued to the Vancouver Taxi Association, picking up passengers in Vancouver and dropping them where requested.
Kater pays the association an undisclosed percentage of its profits — believed to be around 20 per cent — for using the licences.
Initially, the idea was to use the 140 licences that had been allocated to the taxi association and scale up to that number of cars within weeks of the company’s launch, but Larson said as Kater’s technology improved and after the latest announcement that ride-hailing companies will be able to apply to operate this fall, the plan changed.
“We’re not going to use them. We’re focusing on the ride-hailing,” he said.
The Vancouver Taxi Association still owns the unused licences.
Kater can still only pick up passengers within the City of Vancouver, but can drop people off wherever they want. Drivers are independent contractors who are licensed and certified the same as taxi drivers, and are paid a minimum of $20 per hour.
The cost of a Kater ride is the same as a taxi, but can be paid in advance through the app.
When asked why Kater would want to keep its cabs if its application to operate as a ride-hailing company is approved by the Passenger Transportation Board, Larson said it is a matter of control.
“Having our own vehicles provides us some type of guaranteed supply — we can direct them, we know where they are, we can organize outside of certain events,” he said. “It integrates nicely with what is more traditional ride-hailing as we move forward.”
Transportation critic Jordan Sturdy, the B.C. Liberal MLA for West Vancouver-Sea to Sky, said the fact that Kater started operating in the spring is concerning.
“It obviously makes me a little uncomfortable that they’ve moved forward in advance of a true ride-hailing model where other companies weren’t able to take advantage of that opportunity,” Sturdy said. “Perhaps they could have, but it doesn’t make sense for a pure ride-hailing company to operate under taxi restrictions. It seems like kind of a going through the back door thing.”
Minister of Transportation and Infrastructure Claire Trevena has asserted in the past that Kater is following the rules as they exist, and will have to follow any new rules that go into place for ride-hailing.
Larson said the ability to launch in the spring, long before any other ride-hailing app, was not an unfair advantage because any other company could have done the same by following the regulations for taxi companies. All it did was allow Kater to work on their technology and customer experience, he said.
Richmond-Queensborough B.C. Liberal MLA Jas Johal, who was on an all-party committee on ride-hailing, has been critical of Kater since it started because of its ties to the Vancouver Taxi Association and the B.C. NDP, via former party president Moe Sihota.
He said he wouldn’t be surprised to see Kater eventually transform completely into a traditional ride-hailing company and drop the Kater cabs.
“For Kater to now look at a different business model tells you their present business model is an unmitigated failure,” he said.
Larson wouldn’t give out details of Kater’s ridership, except to say that app downloads and customer usage are growing 15 per cent week over week.
“The adoption is healthy,” he said.
Kater’s foray into traditional ride-hailing fits with plans to expand its services to include mobility as a service, which involves connecting different modes of transportation through one digital platform.
Eventually, Larson sees people using the Kater app to plan and pay for multi-modal trips, such as travelling from Surrey to Victoria using ride-hailing, transit, a ferry and a taxi. This fall, the idea is to have Kater cabs and ride-hailing on the app along with transit.
“There’s a bunch of cities working on (mobility as a service),” he said. “Vancouver should be one of them, for sure.”