Since Jim Beck started Beck Taxi in 1967, the company’s iconic orange and green cab colours have been traveling the streets of Toronto. With 1,700 taxis – the largest cab fleet in Toronto by far, and the largest privately owned dispatch company in North America (excluding co-operatives) – Beck Taxi’s professionally trained independently contracted drivers move the city 24/7, answering some 7 million calls in 2012 alone.
Even with the fleet of this size roaming Toronto today, Beck remains a family business, and daughter of Jim Beck, Gail Beck-Souter, General Manager, and her daughter Kristine Hubbard, Operations Manager, carry on the tradition of excellent service that won’t keep customers waiting. The Canadian Business Journal spoke with the two about Beck Taxi, and about the issues created by the City of Toronto that continue to thwart taxicab business in the city and make the taxicab operators lives and business difficult.
The company started with one radio frequency, today it has 14, and the number of call takers grew from one to 35 in a shift, and Beck Taxi’s 6,000 square foot head office has about 150 staff, and garages all over the city. In 2012 the company took seven million calls and grew by 20 per cent, aiming to hit eight million calls in 2013.
Jim Beck organically grew the business from 25 cars to 200 in 1985, and his daughter took over focusing on the principals of good service and respect for the driver. “We in Beck Taxi have two customers — one in the back seat and one behind the wheel. We have a sense that they are all part of our family, and we treat them all with respect. We have to provide a high level of business for the drivers, and high level of service for the customer. It is a balancing act for us.
“My father worked very hard to maintain a five minute timeframe for a customer pickup, and this legacy of hard work and customer service has stayed with us to this day. The taxi service relies on disciplined approach to taking orders from clients and making sure that drivers are available for pickup,” says Beck-Souter.
Beck Taxi uses the latest technologies that aim to serve the customer. For example, Mobile Knowledge provides the company with automated dispatch technologies, and provides equipment, software, customization and support services to get Beck Taxi going. “We do everything possible that can make people’s lives easier. Our smartphone apps have 40,000 downloads, but our phone numbers are still at the heart of our business. We treat technology as a buffet. We cherry-pick what works for our industry. While technology helps, we still rely on the two-way radio for communication. We are fair to our drivers, and strict policies are what built our business, and that’s what will drive our future growth,” concluded Beck-Souter.
The Industry Rift
The 1998 industry reform by the City of Toronto created a second-class license that put a rift between the drivers, creating issues in regard to leasing, agents, and the Ambassador Program.
The 1998 Ambassador Program allows only the Taxicab owner to drive the vehicle, and the taxicab cannot be transferred, sold or leased. Not being able to hire additional drivers forces the Ambassador Licence holders work long hours without a long-term view of the job security. The program created an inequality between those who were issued an ambassador licence and those issued a standard licence before 1998.
“This created a two-tier system. The Standard License allows taxicab operators to run and grow a small business, hiring more drivers (after 20 years of service) as the city grows. This is what drove people into the industry. The standard license gave people the option to hire new people and step back — a form of business and retirement planning. The Standard License No.3481 was the last one issued by the City of Toronto, and No. 3482 became Ambassador License No. 1,” says Hubbard.
According to Hubbard, the idea behind this action was to devalue the industry as a whole, but the effect has been just the opposite. In 1998 the Standard License could be purchased from the existing license holders for about $75,000. Today the Standard License is worth about $350,000. “Today we have the Ambassador Licensees who work for nothing, and Standard Licensees who pay quadruple to lease the standard license due to higher demand with more drivers coming into the market and no increase in supply, so the whole industry is suffering.
“On top of this, it’s often not even the standard license owners who rent the Standard Licenses. This job has gone to the money managers — agents who manage the licenses. These agents seek out the highest bidder on the license rental, and there is no regulation, no requirements, and no protection for those who rent the license because they are nameless to the city,” says Hubbard.
“We would like to get rid of these middlemen agents. We want to see value for the lessees and drivers. It’s a health issue, a safety issue, and these agents take millions out of the system,” added Beck-Souter.
Beck Taxi takes action to the City, working to create a suitable solution for Toronto’s taxicab industry. The company met with multiple City councillors, provided viable solutions to the City, went through the City’s consultations, even held open house events for the City (with a one councillor turnout).
So while the business thrives, Beck Taxi finds the City of Toronto being a subpar industry regulator. While the taxi regulation reform is underway in the City, the company sees continuous indifference from the City. “We are plagued with disinterest. We don’t have a champion for the taxi industry (in City Hall). No one really cares, and no one really wants to meet with us and talk to us,” says Beck-Souter.
To this Hubbard added, “The taxi industry executes about 30 million trips a year in the city, so the industry keeps the city moving in a big way. Following the reform of 1998, we can only hope that the bad decisions will be overturned, but we don’t hold a lot of hope due to the disinterest. The industry contributes to the City through licensing fees and taxes, but we are not seeing anything in return,” concluded Hubbard.