Taxi ownership in biggest Canadian cities does not come cheap

Peter Rakobowchuk, THE CANADIAN PRESS
MONTREAL - Owning a taxi was once a low-cost route into the world of small business but it's not such a bargain now.

Open bidding on taxi rights in some big Canadian cities has triggered wild bidding wars and speculative investment that has priced many newcomers right out of the market.

The cost of getting started in the taxi business in Canada's biggest cities ranges from the high of $600,000 in Vancouver down to the still-not-affordable Toronto price of $150,000 - and that's just for a permit.

Montreal comes in at $220,000 - up from $18,000 just 20 years ago.

"People take out a second mortgage to finance their taxis," said Serge Masse, the owner of FinTaxi, a Montreal company created to provide loans to cabbies who need help getting started.

For the big initial investment, taxi owners don't exactly get rich, either.

"Their average salary is about $35,000 a year, depending on the number of hours they work," Masse said.

Every city has a different system of taxi licences, which helps explain the big gaps between Montreal, Toronto and Vancouver.

Paul Teichroeb, Vancouver's chief taxi licence inspector, says potential owners have to buy shares in a cab company if they want to own a taxi licence and a vehicle in the city.

"The owners would purchase a share from an existing shareholder and they trade at whatever the market will bear," Teichroeb said. "They tend to trade around $450,000 up to as high as $600,000."

Teichroeb added that trading in Vancouver taxi licences is in the same range as New York City where it also costs about $600,000 to operate a hack.

He said a Vancouver taxi owner may have several vehicles and lease them out to drivers, who start out making about $70 a shift.

Toronto is a bit more reasonably priced, but Jim Donnelly, the president of the Canadian Taxicab Association, says the cost in Canada's biggest city also fluctuates with the market.

"It's willing buyer, willing seller . . the price goes up and down and depends on how the industry is doing," Donnelly said.

Fernand Bouchard, 70, started driving taxi 50 years ago when permits were cheap, but he says cost is not the only thing that has changed in the business.

The former high school teacher who drove part-time had to sport a cap, white shirt, jacket and tie when he was behind the wheel of his cab.

"The car would have to be washed twice a day. . . if not, the police would stop us and our taxi permit would be suspended," said Bouchard who now runs the Montreal Taxi School.

Masse says many of the Montreal cabbies who seek startup financing from his company are immigrants, and about 25 per cent of them are well-educated professionals.

"About half the clientele are Haitian, one-third Arab and the rest are mixed," Masse said.

Masse points out it's not easy for the highly-skilled workers who came to Canada to make a living.

Bouchard said he usually gets two engineers in every class at Montreal Taxi School, where students spend 150 hours studying maps of the city, learning how to balance their books and how to deal with clients.

"We have had people who are doctors in their own country . . we even had a surgeon," he added.

"They are people who are super educated, but their diplomas are not recognized here."

One taxi driver named Faisal arrived in Montreal from Algeria six years ago.

"I came here as an aeronautical engineer, worked as a designer at Bombardier for about a year, but after that there was no work because my contract ended," he said taking time out between runs.

Faisal, 40, who didn't want to give his last name, said he can't work as an engineer until he goes back to university and gets retrained so he can join the order of engineers.

"Then, if you get into the order, they ask for Canadian experience. There are always obstacles, always obstacles," he sighed.

But the father of a six-year-old boy, whose wife was expecting twins, says he's ready to tough it out.

"I'm ready to sacrifice myself for the good of my children because it's good for my children here," he said.

© The Canadian Press, 2008