Lawrence Eisenberg grew up listening to his parents lecture him about his future by pointing out that if he had any smarts, and he did, he should grow up to be a dentist, or a doctor, which might have been the case if young Lawrence hadn’t had ideas of his own about following in his father’s footsteps.
Sam Eisenberg was a hard worker, a guy who drove a bus for the Associated Hebrew Schools of Toronto by day and, after supper each night and on weekends, put on a shirt and tie and a spiffy looking cap to drive a taxi. Sam’s cab was a green 1956 Buick, known around town as the No. 7 cab, partly because his taxi owner’s licence was the seventh one issued by the city in the 1950s and partly because he, in a brilliant stroke of cross-marketing, handed out free packs of Number 7 brand cigarettes to his fares.
The Industrial Revolution should be called the Screw-the-Little-Guy Revolution
Sam’s son, the hypothetical dentist, started driving cabs part time at age 18. His dad taught him that the key to being a successful cabbie was to be a gentleman, open doors for passengers, give impeccable service and lock up a few regulars for leaner times. In 1966, Sam died of heart failure at the wheel of his school bus, just shy of undergoing a medical procedure that might have saved his life, and his only son gave up on the idea of dentistry to drive full time and support the family.
“I always liked meeting people,” Eisenberg says. “I got hooked.”
Lawrence Eisenberg gave up on his idea of becoming a dentist to drive full time in 1966. “I always liked meeting people,” he says. “I got hooked.”
He remembers driving a country-and-western star to a town 200 kilometres north of Toronto for a concert. He remembers moving a woman to Ottawa. He remembers the taxi industry as his family’s good luck charm. Being a cabbie isn’t an easy life, to be sure, but it afforded him a decent living until Uber, the smartphone app that changed everything, turned him into a museum piece.
We’re Mickey Mouse compared to Uber, and the city doesn’t care. But I am a fighter
“I am a dinosaur,” the 73-year-old says. “We’re Mickey Mouse compared to Uber, and the city doesn’t care. But I am a fighter. I put 55 years into this business. I owe it to my father. I want something back.”
Specifically, Eisenberg wants compensation for his taxi owner’s plate, an item that in his dad’s day cost about $50, but had skyrocketed in value to close to $380,000 by the time San Francisco-based Uber Technologies Inc. rolled into Toronto in March 2012. Eisenberg is one of three plaintiffs in a $1.7-billion class action suit filed against the city of Toronto in August 2018, alleging the city was negligent in enforcing its bylaws regulating the ride-sharing service.
Lawrence Eisenberg’s taxi owner’s plate cost about $50 in his dad’s day, but skyrocketed in value to close to $380,000 by 2012.
It is the cabbies’ last stand, a courtroom gambit underscoring one of the great truths of progress, which is that what is dominant today can be dead, or near to it, tomorrow. As one wag told the Financial Post, the Industrial Revolution should be called the Screw-the-Little-Guy Revolution.
The examples are many: electrifying cities doomed the candle makers; carriage manufacturers were run over by the automobile era; and the newspaper industry has been crushed by the digital age.
There is always somebody looking to build a better mousetrap, and there is invariably collateral damage when creative destruction hits. That is, the lives of real people, whose hopes, dreams, health, future plans, visions of retirement — you name it — can be upended in the blink of an eye or, in the cabbies’ case, by a smartphone app backed by Silicon Valley money.
Taxi plate prices in Toronto have cratered in value since Uber’s appearance, and can be purchased on Kijiji today for as little as $20,000. A hearing to determine whether the suit will be certified as a class action is scheduled for November in the Ontario Superior Court of Justice.
But it is not all doom and gloom on the front lines of the taxi wars. One offshoot of the business’s decline has been the creation of a new industry — for academics —studying the Uber effect.
It is awfully hard for consumers to argue against the better mousetrap
Carlena Ficano, a self-described “Canadian-loving American” economics professor at Hartwick College in Oneonta, N.Y., says the Uber-versus-taxis skirmish is a great teaching aid for exploring basic economic concepts, such as monopolies.
Pre-Uber, city folk walked, cycled, took public transit, drove or took a cab to get where they needed to go. Cabs charged whatever the fare of the day happened to be. In a cab-only universe, prices were higher than would otherwise prevail in a perfectly competitive market. Economists hate this, Ficano says, since “it limits the amount of exchange, and thus the value created from that exchange.”
Uber has disrupted the cab business around the world.
Along come Uber and, later, Lyft Inc. More perfect competition was restored to the marketplace. Consumers had choices, which drove down prices. The monopoly was dead. What economic theory can’t explain is whether society is any better off because of it.
Jonathan Hall, an assistant professor at the University of Toronto, divides the Uber age into winners and losers. Among the victors are students, stay-at-home-parents, struggling actors and all those individuals in between full-time gigs who can become an Uber driver in a relative pinch, working the hours they want when they want for as long as they want.
The losers are the careerists.
“The data we have shows taxi drivers make more than Uber drivers,” Hall says. “If you were someone who had been working full time as a taxi driver, and are now working full time as an Uber driver, you are probably worse off.”
Other potential losers include congestion, pollution and accident rates. More than 90,000 licensed drivers work for Uber, Lyft and the other ride-sharing services in Toronto, which is about seven times the number of cabbies.
Uber has also affected other cities after it appears. For example, in Regina three months ago, it triggered a wave of driver defections from the traditional cab companies. In Quebec, Uber, and the provincial government’s (alleged) bungling of the file, have sparked rotating strikes among cabbies. Vancouver is the last major Canadian city to hold out against the app, but Uber is coming there soon.
About 250 taxi drivers block the intersection of Queen and Bay Streets to protest Uber in December 2015.
Such disruption is the new normal, and it means more cars on the road waiting for an app to point them where they need to go, while behaving as unpredictably as cabs stereotypically do, minus the easily identifiable colour schemes and taxi light on the car roof to identify them as potential hazards.
Yet even if Uber were demonstrably shown to be a societal cancer, cab drivers still would not catch a break, not according to theory.
“What makes society better off are the externalities that affect other people, but aren’t attached to prices,” Hall says.
Put another way, if there is more pollution because there is a bunch of Uber drivers zipping about, it impacts the overall social welfare, and maybe that outweighs the benefits of Uber. If there is an increase in congestion, maybe that’s also a problem. But taxi drivers earning less than they did before? In the big, social welfare picture, it is not a problem.
“I am not saying it doesn’t stink for the taxi drivers,” Hall says. “But we know every dollar lost by a taxi driver is a dollar saved by a consumer.”
Lest one get too weepy over the plight of the humble cabbie, it is important to remember the industry as it was.
In Sam Eisenberg’s day, cab owners were working stiffs, many of whom were World War II veterans. By 2012, taxi plates were often the preserve of absentee owners, dentists, lawyers, doctors, financiers and the like: Big shots, who didn’t actually drive a cab, but were happy enough to lease out their plate (or multiple plates) at predatory rates to drivers, who drove long hours in smelly cars to scratch out a modest living.
The taxi plate was Lawrence Eisenberg’s pension
Lawrence Eisenberg was among the exceptions. After Sam’s death, he expanded the family business, getting a bank loan to buy a second taxi owner’s plate, followed by a third. Eventually, he named his growing fleet Lucky Seven Taxi, identifiable by the number seven painted on the car doors.
He was still driving the No. 7 cab when he retired in 2010 due to health issues. The plan thereafter was to lease out his plates and spend a month in Florida each winter with his wife, Merna, a retiree from an administrative job.
The plate was his pension. If the kids needed financial help, Lawrence and Merna were going to chip in. If their two-storey home in northeast Toronto needed work, they were going to do it, or so they thought.
“We’re not starving,” Merna says. “But it hasn’t been the retirement we imagined. We would have liked to be able to help our kids, maybe with a down payment on a condo, but that’s gone.”
Adds her husband: “We’ve been screwed over by the city.”
Memorabilia of Eisenberg’s fleet Lucky Seven Taxi.
Eisenberg may be right, but he is not the only one getting screwed.
Cities are forever messing with their citizens, creating winner and losers, be it with a zoning amendment, a new bike lane, summer construction projects, condo builds, land expropriation directives, bylaw tweaks or, if one is an old-time cabbie in Toronto, by being slow to regulate Uber, a market disruptor that entered the urban fray — without regulation — and established a swell of loyal customers by offering something better and cheaper than had existed before.
It is awfully hard for consumers to argue against the better mousetrap, and it is awfully hard for a city to ignore popular demand.
Case in point: on a spring day in Toronto in 2019, a loyal taxi user (a.k.a. me) phoned a Toronto cab service I had been using for 25-plus years. My wife and I were going to a wedding and needed a car at 4:45 pm sharp. The phone rang, and rang, until a dispatcher finally answered. She was polite, lovely in fact, and explained that there were no cabs available. She even phoned back 15 minutes later, as she promised she would, and still no cars. She apologized. I (finally) loaded the Uber app onto my phone. Away we went. We haven’t taken a cab since.
Despite the economic headwinds and shifting consumer tastes, traditional cabs aren’t dead yet. For now, Eisenberg’s lucky No. 7 plate is still on the road. Ghulum Mustafa, a driver Eisenberg has worked with for years, leases the plate from him for about $300 a month — down from a peak of $1,500 in 2015.
Mustafa, an entrepreneurial sort, took on several other discounted leases amid the taxi market crash, to try to build something new atop the ashes of an industry. The strategy has not worked.
“Nobody wants to drive a taxi,” he says. “You can’t make any money at it. I am going to give Lawrence his plate back. It is time for me to do something else. The taxi business is finished.”
But the cabbie who could have been a dentist isn’t ready to let go of the wheel. A couple of times a year, Eisenberg gets a call from one of his former customers, a “nice lady,” a regular looking for a lift to the airport. His cabbie impulses kick in, and he will go through the rituals his father once did to deliver upon the request, shaving, putting on a shirt and tie, holding the car door open and whisking the fare to her destination — in his private vehicle.
“I miss being out on the road,” Eisenberg says. “I knew a lot of people, and 90 per cent of them never actually knew me by name, but they knew I was No. 7.”
• Email: joconnor@nationalpost.com | Twitter: oconnorwrites
