A major transaction that will transform the taxi industry in Montreal.
MONTREAL, August 9, 2016 – Taxelco announced today that it has purchased Taxi Diamond, the biggest taxi fleet in Montreal. This transaction, which combines the strengths of two innovation-focused players, will allow Taxelco to step up its modernization strategy to meet the needs of Montrealers looking for safe, fast, and efficient professional taxi service which is available round the clock everywhere on the island of Montreal.
The complementary service offerings under the Taxelco umbrella will meet the needs of all customer segments across Montreal. Taxi Hochelaga operates in the east-end of Montreal and specializes in paratransit. Taxi Diamond is the biggest taxi fleet available in the central and western areas of the city and is also the leading provider for corporate and institutional clients. Téo Taxi is the first all-electric taxi service in Canada offering a unique experience to users and drivers.
This acquisition will allow Taxelco to implement its ‘’know-how’’ on a large scale, with 1,720 vehicles offering the same reliable service to Montrealers under three different brands.
“A year after acquiring Taxi Hochelaga, and eight months after launching Téo Taxi, we’ve gained key strategic knowledge and learned quite a few lessons,” pointed out Alexandre Taillefer, senior partner at XPND Capital and Taxelco founder. “Through innovative management of our operations, we put customers first while at the same time providing a favorable work environment for our taxi drivers.”
“New technology and better taxi fleet management are the keys to transforming the industry,” said Marc Petit, the CEO of Taxelco. “We want to offer the owner-drivers and independent contractors who work with Taxi Hochelaga and Taxi Diamond a modern, clean, and environmentally friendly fleet so that they can provide Montrealers with consistently top notch service that is safe and efficient.”
Taxi Diamond’s experienced management team will remain in place. Like Taxi Hochelaga, Taxi Diamond will retain its agency model and drivers will continue to be self-employed. Taxi Diamond’s service code will be improved and standardized with Taxelco’s.
“This acquisition unites two companies recognized for their forward-looking approach” said Dominique Roy, the CEO of Taxi Diamond. “Taxi Diamond has always relied on innovation to set itself apart from the competition and it has now one of the best call centers in the industry. We were also the first taxi company to launch a mobile app, equip vehicles with GPS, and accept electronic payments. We are very happy to be joining Taxelco.”
Taxelco was launched by XPND Capital in 2015. It owns Taxi Diamond, Montreal’s leading taxi company, Taxi Hochelaga, and the latest arrival, Téo Taxi, the most innovative player in the taxi business. By electrifying the industry fleet and optimizing the use of information technology, Taxelco seeks to position Montreal as a green and avant-garde urban hub where transportation methods drive economic development and mirror the city’s unique and innovative character.
#IAmUber or #WeAreTéo?
Uber’s misinformation campaign is in full swing and the company is doing everything it can to rally Montrealers to its cause. Over the past few days, I’ve read several texts that reflect a profound intellectual dishonesty. That’s why I’ve decided to write this text—to set the record straight.
This is not an attempt to win over Uber fans. The positions of the pro-taxi and pro-Uber camps are firmly entrenched—although more and more people are leaving Uber for Téo. My goal in writing this text is to shed a different light on Uber’s propaganda campaign in order to help Montrealers make an informed choice.
The truth behind Uberfandom
Today a number of Montrealers showed their support for Uber at a large gathering skilfully orchestrated by the company’s communication agencies. These Uberfans support a company that doesn’t give a damn about them. A company that doesn’t give a damn about its drivers and the cities in which it operates. A company run by mercenary individuals whose only goal is to go public ASAP and rake in the profits.
The Uberfans at today’s gathering were joined by people who think they are supporting innovation, but who are in fact being used to persuade the government to rewrite laws and regulations that Uber has been ignoring with impunity for the past two years. Uber is seeking carte blanche to make money, to the detriment of an entire society.
They will fight to destroy a taxi industry that has languished for years due to a lack of leadership and innovation. An industry that today is making a concerted effort to turn itself around and embrace innovation.
Uberfans are being manipulated by people who are skilled at telling lies and half-truths, at putting a favourable spin on what they call a regulatory vacuum (no such thing exists) that is purportedly preventing them from offering an innovative service. Uberfans are being manipulated by a company that has paid millions of dollars in Quebec to lobbyists and PR firms, and to their lawyers who contest fines handed to Uber drivers for providing an illegal transportation service.
Uber is not solving the taxi industry’s No. 1 problem—it’s making it worse
When we decided to enter the taxi industry, we soon realized that service could never be improved in the long term if the extremely precarious working conditions of drivers were not addressed. Those who are critical of the industry are quite right: drivers are not always courteous, friendly or well groomed. In many cases, that’s an understatement. But how would you act if you had to work 12 hours a day, 6 days a week, for lousy pay, and if you’d been doing that for the past 12 years?
Uber’s raw material is drivers. They’ve developed a slick, efficient hiring strategy, promising drivers an easy way to make money using their own car. They talk about an income of up to $20 an hour. The reality is quite different. On average, Uber drivers make about $6 net an hour. That’s why most leave the company after six months. Those who stay are often in for a nasty surprise. Many of these drivers lease their car and once the lease is up, they return the car with 200,000 kilometres on the odometer, whereas the maximum on their contract is 72,000 kilometres. At 25 cents a kilometre, the additional mileage winds up costing them a lot . . . You won’t see many drivers demonstrating to keep Uber in town.
At Téo, drivers are guaranteed a salary of $15 an hour with regular benefits, including two weeks of vacation. They can hardly believe it! If they want, they can also work overtime for time and a half, in accordance with our labour laws.
Téo is not a company that lives off the government
When I read words of support for Uber from a prominent institution or an instructor at Hautes Études Commerciales, I see the business mentality of a bygone era. A mentality shaped by a belief in individualism, commercial Darwinism and the law of the jungle. There is no subtlety to their statements. We should support Uber because it’s innovative, because it’s what consumers want. They say nothing about social and tax issues. Is that truly what innovation is all about?
They even use the ultimate argument, the weapon of mass destruction: Uber doesn’t receive government subsidies. What better way to undermine your opponent? Uber began its smear campaign against Téo in a particularly nasty way. I’ve read statements to the effect that we’ve received $60 million in subsidies. That is simply not true.
Here are the facts:
Sales taxes must be charged on every dollar of income
I’ve also read a text suggesting that taxi drivers should no longer have to pay sales taxes. The educated people who wrote that text should do their homework. All taxi drivers have to pay sales taxes, because they’re included in the meter rate. It’s not an income for the drivers; they charge taxes on behalf of the government. To suggest that they shouldn’t have to pay sales taxes if they make less than $30,000 a year is absurd. It’s true that if you make less than $30,000 a year, you don’t have to charge your customers sales taxes. But this rule doesn’t apply to taxi drivers, since sales taxes are automatically calculated in the price they charge. They’re not entitled to keep that money for themselves!
Uber maintains their drivers don’t have to pay sales taxes because they’re self-employed workers who make less than $30,000 a year—and they aren’t providing a taxi service. Uber defines itself as a commercial ride-sharing service. Is that so? The definition of ride-sharing is very clear. Ride-sharing is when drivers decide to travel from point A to point B and invite third parties to join them, in exchange for a nominal fee. When drivers wait for ride requests and travel to destinations chosen by their customers, that’s not ride-sharing; that’s a taxi service.
Quotas are necessary for taxi drivers to make a decent living
People attack quotas and discredit the existing system, calling it archaic. Quotas have a single purpose: to ensure that those working in an industry with low entry barriers are able to earn decent wages. In the space of 12 months, the number of cars offering an UberX service in London doubled from 50,000 to more than 100,000. That’s double the number of cars in 12 months! It’s also double the amount of greenhouse gas emissions, and a lot less income for each driver. Analysts estimate that all taxi drivers in London have seen a 35% drop in their income. Demand is up, because prices are down, but the standard of living for all has declined.
Uber is rubbing its hands in glee. There are taxis everywhere, drivers’ wages are dropping . . . but Uber gets its 25% cut regardless. They don’t have to cover operating costs. The more cars there are on the road, the happier Uber is. Customers have shorter waiting times and are more likely to take a taxi than use public transportation, given the cheaper prices. This in turn reduces the revenues of public transportation providers, which then require more government subsidies to continue operating.
Uber rakes in all taxi ride profits
Let’s talk business for a second. Uber has a smart business model, reflected in the company’s estimated worth of over $70 billion. How did Uber manage to become so profitable in such a precarious industry? Very simple. By sucking all the profits out of the industry. Uber charges its drivers a 25% commission. Its only direct cost is each customer’s credit card transaction. For a $10 ride, Uber generates $2.50 in revenue and pays a direct cost of about 2% on $10, or 20 cents. The gross profit margin is $2.30 or about 92 percent. What’s not to like? How many companies do you know with a gross profit margin of 92 percent? Uber applies the same model in every city without ever investing a dime in the local community. Oh yeah, it’s true that they pay millions of dollars to cover the fines slapped on their drivers . . .
Once customers are hooked and the industry has been damaged and conquered, Uber shows its gratitude by raising prices. Is this the face of innovative capitalism?
Uber plans to eventually do away with drivers
Uber has a Machiavellian scheme that involves replacing its raw material with robots—a dream come true. They penetrate markets by offering taxi drivers an alternative dispatch system. Then they create competition by introducing UberX. But their ultimate goal is to replace all of these slaves with cars that drive themselves, leaving millions of families without an income. They’re quite open about this. Talk about great values.
Uber’s cynical ad campaign compares your freedom to choose a bottle of wine with choosing a taxi service that is illegal and harmful to our society—whichever way you look at it.
Today you have a choice. You can be part of this war machine whose only goal is to take over major urban markets, one city at a time. Or you can stand up and say no. Say no to this farce that has gone on long enough. Say no by saying yes to an alternative model that is unique in the world. A model that is eco-friendly, social-minded and innovative—created and financed by local businesspeople. A model in which all Quebecers have a stake.
Today you can choose between “I” and “we.”
April 29, 2016
La Presse+ Édition du 18 avril 2016, section AFFAIRES, écran 2
« Nous sommes le groupe le plus impliqué et le plus ambitieux pour électrifier les transports au Québec », dit Alexandre Taillefer. Cette vaste stratégie a été, selon lui, le facteur décisif pour convaincre des acteurs importants de s’impliquer. La Caisse de dépôt et Investissement Québec participent à XPND2, lancé en novembre dernier. Ce fonds a amassé 75 millions pour déployer ce plan. « Ce ne sont pas des subventions, précise-t-il. Ils ont investi de l’argent, aux mêmes conditions que moi. »