Halifax Taxi Monopoly vs Uber

By Patrick O’Brien (AIMS On Campus Student Fellow)

Uber is a service that many consumers want to bring to Halifax, Canada. Even though consumers advocate for the ridesharing service to be implemented, cab companies certainly do not. The taxi service in Halifax is an effective monopoly, whereby there are only two taxi companies that absorb all the business. These companies pay provincial fees to operate in their designated area, special taxi licenses, and have a large overhead cost in their contact centers. When you incorporate all these expense into the revenue that the taxi service provides, it doesn’t leave much room for competition amongst other companies. Uber poses a large threat to the monopolistic business, as the ride-service contractors (your Uber drive) are not regulated by the province as ordinary taxi service providers are, and therefore don’t have to pay regulatory fees, have a much lower cost of operations, and can offer cheaper rides.

When discussing benefits for consumers and why they would choose Uber versus a normal taxi, majority of people do so because a quick and cost effective alternative. The bigger concern many consumers should ask themselves, but don’t, is whether they are safer in Uber compared to a taxi? According to an article written by Postmedia Network Inc. majority of Uber drivers are not properly insured when in accidents, as ordinary taxis must be insured to carry passengers legally. Aviva insurance has introduced a solution. A new type of insurance called ride-sharing insurance which protects the driver carrying passengers in the event of an accident. The requirements are limiting, which means many drivers will not be able to qualify. To qualify, a driver must hold a license for a minimum of six years, is only eligible to work 20 hours a week, and eligible only for residents driving in the province of Ontario. The problem is many young/new drivers with good records won’t be able to qualify, and If this was a full-time job for the individual, then they need to reduce their hours in half, which naturally will not happen for those who depend on the income full time and therefore won’t be covered during an accident past 20 hours.

What is the result of Uber breaking into the taxi industry? A study published by Forbes Magazine gathered data about the effects of uber on the income of taxi drivers in multiple U.S cities. On average salary for taxi drivers decreased 10%, while self-employment increased over 50%. This is a drastically contradicts the widespread theory or thought, that Uber is destroying jobs and killing the market. In fact, as shown by this study, it is doing the exact opposite. When looking back to a small city like Halifax, the effects may be different. While the market is largely dominated by two taxi companies, (Casino Taxi & Yellow Cab) there are independent drivers in Halifax, who pay large fees for their license in order to operate independently with the use of a call center that provides the service of referring clients to them.

With that being said, Uber had the possibility to change jobs, and the costs for independent drivers by allowing them to enter the market with greater ease. Even though it disrupts the taxi industry, maybe that change is needed, and should be embraced. Just like major companies that need to adapt to new technology and laws to remain competitive against their peers, why should taxi companies be exempt from this?

Lessons from Atlantic Canada’s biotech sector: Part one

By Ainslie Pierrynoswki (AIMS On Campus Student Fellow) 

In this two part series, I’ll examine several of the key factors behind the biotechnology sector’s success in Atlantic Canada—and what lessons they hold for other industries in the region.

In Atlantic Canada, biotechnology is booming. The term biotechnology refers to products or processes created using living organisms or biological systems. In the case of Atlantic Canada, the region boasts more than 100 bioscience companies and 25 research organizations, which generate over $300 million per year in private sector revenues. At a time when many communities and industries in the region face continued economic challenges, what lessons can Atlantic Canada’s entrepreneurs draw from the biotechnology sector?

Bridge the gap between research and commercialization

Innovation is not a mere buzzword. Industries such as digital technology, biotechnology, and automated transportation systems are becoming increasingly sophisticated and profitable. As this report from the Council of Canadian Academies notes, countries which fail to develop new ideas, processes, and technologies in their industrial, scientific, and technological sectors “risk becoming unable to participate in world-leading research and equally unable to reap its eventual social and economic benefits.” Although Canada’s universities and research organizations have a strong output, the country’s overall investment in research and development is sorely lacking compared to other developed countries and emerging economies, such as China and India. Further, Canada often struggles to translate research and development into profitable products and services.

Atlantic Canada’s biotechnology sector, however, provides a prime example of how companies can bridge the gap between research and commercialization. Biotechnology firms across the region have drawn on Atlantic Canada’s 17 universities and the specialized research institutes therein. Halifax-based biotechnology firm Immunovaccine, Inc., for instance, started out as a partnership between entrepreneur Brian Lowe and then-Dean of Science at Dalhousie Richard Kimmins.

As a matter of fact, Atlantic Canada is home to Natural Products Canada, one of only two biotechnology firms in the country to be designated Centres for Excellence in Commercialization and Research. The company maintains multiple partnerships with research organizations, as well as technology and commercialization experts, in Atlantic Canada and beyond.

In the words of PEI BioAlliance CEO Rory Franics, “It’s not enough just to do the research. There’s a lot of discipline and a lot of understanding required to make this economically impactful.” Atlantic Canada’s biotechnology sector seems to have these qualities in spades. As a matter of fact, innovations in biotechnology are helping to revitalize traditional industries, as recounted below:

Build on—and innovate—existing industries

A number of biotechnology firms in the region are injecting innovation into existing industries such as forestry, fishery, and agriculture. For example, Maritime Innovation uses analytics and scientific data regarding tree genomics to help the forestry sector grow larger and stronger trees. Moreover, Seagrave noted that similar data analysis programs in the fisheries sector have the potential to make the fish processing industry in Atlantic Canada more efficient and competitive. Given Atlantic Canada’s continued reliance on traditional, seasonal industries, new companies and established industries need to follow the biotechnology industry’s lead and develop a symbiotic relationship—one which finds common ground between the old and the new. In essence, the biotechnology sector’s experiences shows how we can breathe new life into established industries facing economic challenges.

When it comes to the biotechnology sector’s success in Atlantic Canada, there remains much more to unpack. The second and final part of this brief series will delve into how biotechnology firms are forging international connections, pursuing partnerships, and facilitating economic diversification—and why all of that matters.

 

Canada & U.S Trade War

By Patrick O’Brien (AIMS On Campus Student Fellow) 

The trade war amongst Canada and the United States is beginning to gain momentum as Canada slaps counter-tariffs on steel and aluminium products being shipped in from the U.S. Canada announced on July 1st the implementation of the same tariffs by percentage on steel and aluminum products at 25 percent and 10 percent respectively, and a list of other goods that would be tariffed at 10 percent similarly. The list of counter-tariffs was designed to have the same dollar per dollar affect as the U.S tariffs on Canada and was not very different from the action other Countries took such as Mexico, Turkey, and Europe.

What is the U.S trying to accomplish with these tariffs on many Countries including Canada? Essentially by implementing large tariffs on Steel and Aluminum this allows for the U.S produced metals to become more desirable, as they now cost relatively 25 percent (10 percent for aluminum) less than their foreign competition. This kind of protectionist policies hurt both sides of the economy. At a time when the situation around NAFTA is uncertain (as described in previous articles) implementing tariffs on your trade partner doesn’t help negotiations, especially when there was no discussion prior to.

In a recent conference in Winnipeg, U.S politicians met with Canadians to find regional trade solutions that can be taken to resolve/counteract the new tariffs. During the conference, Martin Nelson who is a Democrat in the North Dakota house representative states that “Americans are feeling the effects of the counter-tariffs not only through a higher cost of steel and aluminum, but also in the other goods such as food products that Canada rolled out tariffs against the U.S. Farmers in Western U.S would also feel the of the tariffs, more specifically those who are in debt to the banks that finance their operations. They may have to sell crop to at lower prices to meet bank capital stipulations and suffer large losses.

New discussions are also arising from the Trump administration about a possible 25 percent tariff on vehicles imported from Canada. This is one of the largest concerns for Canada, as it would almost completely decimate the Canadian auto Industry. Analysis conducted by the University of British Columbia concludes that failure to maintain a NAFTA agreement would lead to a 30 to 40 percent decline in the Canadian auto industry. This is not including the possibility of a 25 percent tariff as described above. Alternatively, the U.S would also be affected by imposing an auto tariff on Canada, as auto parts are shipped back and forth across U.S-Canadian border many times over to complete production of the car. If the U.S were to tariff the Canadian auto industry, then a counter-tariff would only make sense to compete. This would result in higher costs in the industry, loss of jobs, manufacturing plant shutdowns, and ultimately the consumer would be at a lose due as this would translate to a substantially higher cost of cars.

In conclusion, we as Canadians realise that something must be done to compete with the U.S economy, whether that is looking for opportunities abroad in Europe or Asia (thereby increasing our bargaining power) while simultaneously coming to an agreement with the U.S on fair trade practices that benefit both parties.