Ride hailing companies Uber (UBER.NYSE) and Lyft (LYFT.Q) are coming to Vancouver after a long wait beginning start month, but they’re coming with significant restrictions.

Drivers working for ride-hailing companies will be required to hold a Class 4 commercial license rather than the standard Class 5 license held by the average driver. It shouldn’t be a surprise to anyone whose been paying attention to the cannabis markets in B.C. that the provincial government can’t possibly leave any market entrant alone to operate.

Go anywhere in North America and you won’t find an Uber or Lyft driver who does this job exclusively. This is a side-gig at best.

“Ninety-one per cent of the drivers on our platform drive less than 20 hours a week. These are people like single moms, students in school and people trying to supplement their incomes. As soon as you introduce that Class 4 commercial licence, these people tend not to apply for that type of work,” said Aaron Zifkin, the managing director of Lyft Canada.

B.C. will join Alberta, which has Uber, in requiring ride-hailing drivers to have licenses normally fit for professional drivers. Most other provinces do not require a commercial license.

What’s a Class 4 licence?

  • There are two types of Class 4 licence: unrestricted and restricted.
  • An unrestricted Class 4 allows you to drive buses with a maximum capacity of 25 people, taxis, limousines, ambulances and any normal vehicle under a Class 5.
  • A restricted Class 4 allows you to drive taxis, limousines, ambulances and special vehicles carrying not more than 10 people designed for wheelchair-accessible transport.

The primary purpose behind the requirement of Class 4 licenses is security, according to Bowinn Ma, MLA for North Vancouver-Lonsdale, except security won’t be improved by a Class 4 license. Instead, it will increase waiting times and benefit the taxi industry, because the requirement will limit the driver supply.

Insurance

Once Lyft and Uber receive their approval to operate from the Passenger Transportation Board, they will require to buy a “blanket” insurance package that covers all vehicles used for ride-hailing. The mandatory insurance will cover all drivers for up to $1 million in third party liability and $300,000 in accident benefits.

Premiums will be based on kilometers driven and the zone where the passenger is picked up. The three zones are the lower mainland, the second includes Maple Ridge, Pitt Meadows, Pemberton, Hope, the Fraser Valley, the Okanagan and southern Vancouver Island and the third zone covers the rest of B.C.

The pricing model here mirrors those used in Ontario, Saskatchewan and Alberta.

Uber and Lyft’s fortunes

Financially, both companies have taken some significant hits in the past quarter.

Uber reported a loss per share of $4.72 versus an expected loss of $3.12 per share. It reported $3.17 billion in revenue versus $3.36 anticipated by Wall Street. The company said their reported $5.2 billion loss was due to stock-based compensation.

Comparatively, Lyft, which reported its earnings on Wednesday, posted a loss of $644 million during the quarter.

—Joseph Morton

Written By:

Joseph Morton

Joseph is a Vancouver-based author and journalist with both a communications degree and journalism diploma (and a few novels) under his belt. His joie de vivre is to spin difficult technical topics into more human-centric narratives. Buy him a coffee and he'll talk your ear off for hours about privacy issues, blockchain, cryptocurrency and martial arts. Don't talk to him if you're either a tomato, a bully, or if you're not a fan of either 1984 or Tender is the Night. No. You can still talk to him. Just be prepared to be told why you're wrong.

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