Canada's taxi industry is facing more pressure to modernize as the federal government looks for ways to cut its multimillion-dollar cab tab.

Most public servants are currently issued taxi chits, paper tickets filled out by hand – a system dating back to the Second World War.

Hanif Patni is president of Coventry Connections, an Ottawa taxi dispatch company. He says his firm has been in talks for two years about getting rid of 'paper chits.' (Steve Fischer/CBC) The cost of ferrying public servants to and from meetings in the Ottawa-area alone is about $11 million annually, with each ride costing an average of $14.50. Every business day, local cabs pick up and drop off more than 3,000 federal workers on average, many headed to the airport.

Since early 2016, the department in charge of the archaic system, Public Services and Procurement Canada, has been actively examining ways to dump the chits in favour of digital alternatives using credit-debit cards and electronic accounting.

Under fire

The Liberal government came under fire last October during the Conservative leadership contest, when then-candidate Maxime Bernier railed against the inefficiency of the current system.

"Government officials are handed taxi chits like candy, even though there are more economical ways to travel," he said on social media. "Companies like Uber and Lyft are great solutions that are convenient, affordable and innovative."

Through an order paper question, Conservative MP Ben Lobb found that the biggest taxi users in government are Health Canada, Public Services and Procurement Canada, the Canada Revenue Agency, Shared Services Canada and Global Affairs Canada.

The government recently asked industry for information about a "more effective, efficient and seamless method of payment that requires minimal administration. It also requires sound payment tracking and management of taxi usage by its employees and by administration fund centres."

It's not an easy process. These systems are complicated. - Ottawa taxi company owner Hanif Patni on converting from a chit system to digital payments

The notice specifically referred to payment by "some type of credit card," and a system "available by smartphone application," a business model promoted by ride-sharing services such as Uber and Lyft.

But the requirements also say any solution must "be accepted by all taxi companies and other local transportation options." Uber and Ottawa's existing taxi firms have clashed in the past, though an uneasy peace has since been struck after the city legalized the Uber service last September and began inspections.

The department has set July 27 as the deadline for responses to its so-called "request for information" or RFI, issued late June.

The call for Uber-like solutions comes shortly after the federal government changed its sales-tax rules to require ride-sharing services to start charging GST/HST on all fares.

Level playing field

The March 22 budget said the move would "level the playing field" with the existing taxi industry. Uber Canada's Ian Black slammed the levy as a "tax on innovation."

Uber later emailed many of its customers, urging them to protest to their MPs, arguing that "at a time when people should be encouraged to take public transit and share rides more often, transportation options like ride-sharing should be more affordable, not more expensive."

The measure nevertheless got Parliament's approval and came into effect six days ago, on Canada Day.

Efforts to drop chit system

The president of Coventry Connections Inc., which owns four major taxi companies with 1,400 cabs in the Ottawa area, said he has been in talks with Ottawa for about two years about ditching the chit system in favour of an electronic solution.

"It's not an easy process," Hanif Patni said in an interview. "These systems are complicated and we're trying to go to a paperless solution."

Patni said his companies have an advantage over ride-sharing services like Uber because public servants normally hail their cabs or head to taxi stands. Uber's 3,000 drivers in the Ottawa area cannot be hailed on the street, nor can they use taxi stands.

Taxi drivers protest against the ride-sharing service Uber during a rally on Parliament Hill on Feb. 2, 2016. The federal government is looking for taxi-payment solutions championed by ride-sharing services such as Uber. (Adrian Wyld/Canadian Press) A spokesperson for Uber Canada did not respond directly when asked whether the company was planning to make a submission to Public Services and Procurement Canada.

"As always, we remain committed to better our cities by helping Canadians reduce single car occupancy and make greater use of affordable and reliable transportation alternatives," Jean-Christophe de le Rue said in an email.

U.S.-based Lyft has not yet expanded to Ottawa.

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