Viral

How long have you been driving for?

Anytime I’m in a Taxi, this is typically one of my go-to questions. It also inevitably turns into an opportunity for the cab driver to share their personal story with me (this is one of the 5 BLESS steps in missional living). Last time I asked this question, the driver opened up the internal world of the taxi industry, and gave me insight into how and why companies like Uber and Lyft are gaining so much ground.

It costs $300,000 to buy a permit to drive a cab in this city…

I couldn’t believe my ears when the cab driver told me how it cost to drive a cab in Edmonton (Canada). As I continued to pry into the industry, he continued…

A limited number of permits are issued once every few years, and when they are, it’s a complete lottery. Here’s the catch though, in order to enter that lottery, you need to have already been driving a cab for a couple of years, which is why I’m leasing this cab from someone else. If you’re lucky enough to have your name drawn, then it’ll cost you less than a $1000 to buy the license through the city. Once you get that license, you can either use it yourself, lease it out to someone else, or you can sell it for $300,000 – that’s the going rate these days.

If I was talking to a lawyer, doctor or a dentist and they told me that it was going to cost them $300,000 to buy someone else’s practice, I wouldn’t even blink. All you would have to do is crunch the numbers and it would make sense. However, how does it make sense for a cab driver to dish out $300,000 to buy a permit, when they might only make a couple hundred dollars a day, plus the cost of maintenance and fuel?

I was beginning to understand why companies like Uber and Lyft were gaining so much ground in the transportation industry and why taxi drivers and unions were trying so hard to prevent them from coming into their cities.

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