The car-for-hire service UberX would be regulated and allowed to operate legally in Toronto under a new draft bylaw released Thursday. But the proposals would also dramatically loosen rules for the city's existing taxi cabs.

The plan has some critics declaring that Toronto has given into all of Uber's demands and is deregulating its taxi industry. But pro-Uber voices at city hall, including Mayor John Tory, call the proposals a balanced approach that would give consumers more choice.

The draft bylaw is expected to get a rough ride next week at the city's licensing committee before coming to a vote at city council next month. Taxi representatives say they will lobby councillors to reject the proposals. Uber Canada welcomed the draft rules but said it was still reviewing them.

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UberX allows passengers to summon drivers using a smartphone app. If the proposal is passed, UberX drivers, many of whom are on the road only a few hours a week, would have to submit to criminal background checks and have their vehicles inspected annually by a licensed garage. UberX's prices, however, would remain unregulated.

At the same time, traditional cab drivers would no longer need 17 days of mandatory training or to prove they speak English. Rules governing how new their cars must be would also be relaxed. And while they could not implement Uber-style "surge pricing," taxi brokers would be allowed to offer discount fares, with the city-controlled rate becoming a maximum.

Critics say the changes fly in the face of a city council resolution last fall supported by Mr. Tory that the new rules must create a level playing field.

Councillor Janet Davis, an Uber critic, said the city has "capitulated" and abandoned both taxi drivers and public safety.

"Instead of levelling the playing field, we've dropped the floor," Ms. Davis said.

The Canadian arm of San Francisco-based Uber Technologies Inc., which also offers an Uber app that allows customers to hire conventional taxi cabs, still faces a potential class-action lawsuit filed last July that demands a court injunction to shut down its operations. The lawsuit also accuses UberX of costing cab drivers hundreds of millions of dollars.

Some accuse the taxi industry of simply trying to keep out an innovative competitor. But Sam Moini, an owner of HPM Taxi Ltd. and a spokesman for the Toronto Taxi Alliance, said there is nothing new about what UberX is doing – other than flouting Toronto's existing bylaws on a grand scale. Apps to hail cabs have been adopted by others in the industry, he pointed out, and UberX should simply be treated as another cab company.

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"Is Uber tele-transporting anybody? ... Is there some Star Trek technology that they have that I don't know about?" Mr. Moini said. "You're using a vehicle to transport people. ... Nothing has changed."

Cities around the world have been grappling with how to deal with UberX. In some jurisdictions, Uber has faced national bans, including in Germany and France. In Canada, Edmonton approved rules to allow Uber to operate, but the company then ran into problems with provincial insurance rules. In Calgary, rules requiring a $220 annual per-driver licence fee, as well as background and safety checks, prompted Uber to pull out. Ottawa is debating proposed rule changes similar to Toronto's.

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'Street hails'

Only traditional licensed taxis would be allowed to pick up "street hails," or passengers who flag down a passing cab.

Taxis would remain able to pick up passengers who call ahead or summon them with a smartphone app. Their numbers would remain capped, with the current total fleet of cabs set at about 5,000.

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UberX, or other licensed "private transportation companies," would face no cap on the number of cars. (Uber says it now has about 16,000 drivers in Toronto.) But they would not be allowed to pick up street hails, a restriction one cab industry spokesman says is unenforceable and already being flouted on Toronto's streets.

Fares

UberX would be free to set its own prices as it does now, including using its controversial "surge pricing" in times of high demand. Taxi cabs would still be subject to the city's price controls. However, the current set fare would become a ceiling, allowing taxi companies to compete with discount fares.

Fees

Taxi drivers would see their annual licensing fees reduced by 17 per cent, but they would still face an annual driver fee of $290. UberX or other similar new entrants would face a "one-time application fee" of $20,000, with an annual licence renewal fee of $10 a driver. UberX would also face a fee of 20 cents a trip.

Safety

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Both UberX and taxi drivers would need to carry insurance with at least $2-million in collision and passenger hazard coverage. Both types of drivers would be subject to criminal-background and driver-record checks. The city would continue to collect and vet that data for taxi cabs. The city would set the rules for UberX on driver eligibility but allow UberX or other services like it to handle their own records, provided they hand them over for city audits. UberX or other similar services would also be forced to keep detailed records on each trip their drivers make, and hand that data over to the city for auditing.

For a vehicle to be used as a taxi or an UberX vehicle, it must be less than seven years old and have four doors, a move that loosens the current rules about the age of cabs. A move to make taxis either low-emission or hybrid vehicles would also be scrapped.

UberX cars would need to undergo an annual safety inspection at a Ministry of Transportation licensed garage, while taxi cabs would remain subject to two city-run safety inspections a year. Taxis would no longer be required to install snow tires.

Taxis, because of their ability to pick up anonymous street hails, would still need to have special markings, lights and an on-board camera. UberX cars would not be required to have a security camera.

Training

Requirements that taxi drivers go through 17 days of training and provide proof of their command of the English language would be removed.

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Accessibility

The plan calls for ensuring that 25 per cent of all taxis are accessible to the disabled by 2021, and would waive fees for wheelchair-accessible cabs. Private transportation companies such as UberX with more than 500 vehicles would be required to provide wheelchair-accessible cars, with "comparable" wait times and fares.

