Uber suspends service, TappCar prepares to launch, Alberta seeks transit strategy input

Here’s the latest entry in my Edmonton Etcetera series, in which I share some thoughts on a few topical items in one post. Less than I’d write in a full post on each, but more than I’d include in Edmonton Notes. Have feedback? Let me know!

Uber suspends service in Edmonton

Today the City’s new Vehicle for Hire Bylaw came into effect. It should have been a great day for Uber and its supporters, but unfortunately the company was forced to suspend operations due to being unable to obtain sufficient insurance to meet Provincial regulations. The Province announced its plan for what it calls “ride-for-hire services” yesterday. There are three key areas in which the Province is taking action:

  • “Insurance: by July 1, an interim insurance product that will provide adequate coverage to Uber drivers and their passengers will be in place. The interim insurance framework has been approved by the Superintendent of Insurance.”
  • “Licensing: all ride-for-hire drivers, including Uber, will continue to require Class 4 Driver Licences or better.”
  • “Police Checks: regulations will be amended to require all ride-for-hire drivers to have a police information check conducted by police.”

It’s the July 1 date for insurance that is the big problem. Brian Mason, Minister of Infrastructure and Transportation, tweeted that Uber “has known all along that insurance wouldn’t be ready til summer.” But Uber said it only learned of the timeline yesterday and apparently neither did City Council.

Uber did say that it would continue operating in surrounding communities like St. Albert where there is no approved regulation, which apparently caught Brian Mason by surprise. “I had not been aware that Uber was going to try and deliberately operate against the law,” he told CBC Edmonton. “That concerns me a great deal and we’ll be having some conversations with our officials.” Umm…where exactly has he been for the last year?

TappCar and other PTPs prepare to launch

According to the City, five regional (Metro Airport, Anytime Taxi, Cowboy Taxi, Dollar Cab and a Private Individual) and one commercial (Tapp Car) Private Transportation Providers (PTP) have been granted licenses under the new bylaw. Not much is known yet about the regional PTPs, but TappCar does look rather interesting and has been featured in the media in recent days.

Image courtesy of TappCar

TappCar is a local company that promises “a new standard of service…that is convenient, reliable and safe.” They having been working to sign up drivers for their launch.

“TappCar offers an industry-leading mobile app, in addition to phone and web booking. Vehicles are guaranteed to be of comfortable size and quality. Drivers are properly insured and professionally licensed, and each vehicle has a two way camera installed, ensuring every ride is safe.”

You’ll be able to book a car using their app, website, or by calling the dispatch. TappCar is planning to launch mid-March if all goes well.

Provincial Transit Strategy

Today the Province announced it is looking for input on a new transit strategy for Alberta:

“There will be two streams of engagement – urban and rural – and an online public survey, all of which will inform the development of an overall provincial transit strategy and criteria for future funding for municipal transit initiatives and rural bus service.”

For the purposes of the strategy, urban communities are defined as having more than 10,000 residents with rural communities having fewer than 10,000. Clearly there’s a difference between the transit needs of Wetaskiwin with 13,000 people and Edmonton with more than 870,000, however.

Both Calgary and Edmonton have made it very clear that investing in public transit is a key priority. The big cities face unique transportation challenges, and require financial support from the Province to deal with them. Having said that, there are some common trends happening across Alberta, like the fact that young people are increasingly choosing other methods of transportation besides driving.

“In 2014, 67.2 per cent of Albertans age 18 to 24 held any class of Alberta drivers’ licence, down from 70.9 per cent in 2005.”

You can provide input on the strategy here until April 29, 2016.

Edmonton is in the middle of revamping its own Transit Strategy, a process that is expected to wrap up in the middle of 2017. Initial feedback was that Edmontonians want a fast, frequent, and reliable transit network that connects them to major destinations like work, school, and shopping, and that they place a high value on having a safe & secure, easy to use system.

Edmonton’s FIRE Industry: $135 billion and counting

Did you know that more than $135 billion is managed right here in Edmonton? I didn’t either until I heard someone an EEDC event I was at mention it in passing. I’m sure we’ve all heard another Edmontonian gripe about our city’s lack of head offices, about how blue-collar we are, but how many people have mentioned that billion dollar stat? Not many is my guess. I decided to learn more.

The acronym FIRE stands for Finance, Insurance, and Real Estate. It’s a big industry, with more than 36,000 employees in Edmonton (roughly 5.5% of our labour force). In 2009, the FIRE industry accounted for $8.7 billion or 18% of Edmonton’s GDP. Employment in the industry has grown 23% from 2007, and GDP created from the FIRE industry has grown 40% over the last ten years (compared to 30% overall).

Those numbers come from Greg Bainbridge and Tammy Fallowfield at Edmonton Economic Development Corporation (EEDC). They were nice enough to help me gain a better understanding of the industry.

I wanted to get a sense of just how big the industry is, compared to other places. As you might expect, it’s difficult to compare Edmonton with a population of around 1 million people to Toronto, which is four or five times our size. Comparing Alberta as a whole makes more sense. That means looking at Calgary and Edmonton together, an idea that both EEDC and the Alberta Economic Development Authority (AEDA) are promoting. Greg told me that “Calgary and Edmonton are complementary financial service centres”, something that is common in other places as well (Dallas/Houston, Geneva/Zurich, Amsterdam/Rotterdam, etc). He pointed me to AEDA’s recent report entitled Building Alberta’s Financial Services Industry (PDF). Sure enough, one of the “strengths we can build upon” listed in the report is the complementary nature of Calgary and Edmonton’s financial services sectors.

The local financial services industry in Calgary has established a reputation as among the world’s best for energy financing. Edmonton’s financial services industry, meanwhile, has established strengths in banking and risk management.

The report makes the point that as a whole, Alberta’s FIRE industry is, well, on fire. From 2004 through 2009, total capital investment in Alberta totaled almost $433 billion. Here’s what the per capita investment looked like across the country in 2009 (the national average was $9,174):

Employment growth in the financial services industry in Alberta has outpaced the national average over the last ten years as well.

We’re not without challenges, of course. The AEDA report cites economic diversification as a key challenge:

Another key challenge is a shortage of skilled labour: “compared to those of other provinces with financial centres, Alberta’s labour force includes the lowest proportion of individuals with post-secondary education.”

That’s a challenge that the industry is tackling here in Edmonton. Greg described the industry as “an industry of human capital, the foundation of which is smart people”. The University of Alberta has a number of programs of course, such as the MBA program, and NAIT offers a risk management program for insurance, but beyond that there isn’t much in the way of FIRE-specific education. Many of the industry’s senior positions have been filled by drawing expertise from elsewhere, and attracting talent has been a major focus of the industry.

That’s one of the reasons that EEDC recently formed the Financial Services Working Group here in Edmonton. Greg told me that the industry has grown quite organically and independently thus far, due at least in part to the government being located here (thinking of AIMCo and ATB, for instance), but that has meant very little coordination or working together (a mission to Toronto in June 2009 focused on recruitment was one of the first tangible examples of working together). The working group, which met for the first time in October, is brainstorming ways to further the industry, and working more closely with educational partners such as NAIT to develop relevant curriculum is a key outcome of that effort.

Continuing education of the industry’s labour force is another goal. Conferences, luncheons, and other events are all being considered. Though the University of Alberta has the only Chartered Financial Analyst (CFA) partnership in Western Canada, there isn’t a strong understanding of the designation in the industry (think of it as the CA equivalent for investment professionals). There are also opportunities to share research being done at the University of Alberta more directly with the industry.

So who are some of the key players in the FIRE industry in Edmonton?

  • Canadian Western Bank – Formed as the result of a series of mergers & acquisitions, but started in 1984 as the Bank of Alberta. CWB has nearly $12 billion in assets, more than 1200 employees, and has achieved 89 90 consecutive profitable quarters.
  • ATB Financial – Founded in 1938 under William Aberhart. ATB has more than $25 billion in assets and more than 5000 employees.
  • Servus Credit Union – Formed as the result of a series of mergers, the largest of which was Capital City Savings, formed in 1987. Servus has nearly $10 billion in assets and more than 2000 employees.
  • AIMCo (Alberta Investment Management Corporation) – Created by legislation in March 2007. AIMCo manages approximately $71 billion and ranks as one of the five largest institutional investment managers in Canada.
  • Peace Hills Trust – Established in 1980. Peace Hills has nearly $500 million in assets and over 120 employees.
  • Peace Hills Insurance – Established in 1982. Peace Hills has more than $270 million in assets and more than 175 employees.
  • ATRF (Alberta Teachers’ Retirement Fund) – Has been administering a pension plan for Alberta teachers since 1939. ATRF has assets of roughly $5 billion.

These organizations and others in the FIRE industry will play an important role in the future economic growth of our city and province. As the AEDA report states:

The financial services industry is a critical enabler of economic growth, competitiveness, scalability, and productivity. It provides businesses and other industries across the economy with the necessary capital, financial support and advice to pursue opportunities and compete internationally. A robust financial services industry facilitates connections and access to international markets, and helps develop local entrepreneurship, equity, and wealth.

They might be large, but these organizations are also part of the community. ATB Financial, for instance, is a very active community member with thousands of volunteers hours and millions of dollars invested.

The future for the industry looks bright, and initiatives such as the working group should help to take the industry to the next level. Greater engagement with educational partners is important, but the industry will need to make even broader connections to truly succeed. Organizations such as the Edmonton Financial Literacy Society (of which Greg is the chair) can help in that regard. It’s also encouraging to see people like Larry Pollock, CEO of Canadian Western Bank, connect with young professionals like he did at the Emerging Business Leaders’ September meeting.

Edmonton’s FIRE industry is successful and growing, with over $135 billion under management. Remember that the next time someone tells you Edmonton is blue-collar!

The problem with insurance

Driving home for lunch this afternoon on the Whitemud, I was passed by a red Chevy Blazer. Keep in mind that the speed limit is 80km/h, I was doing around 95 km/h, and the Blazer passed me like I was standing still. I don’t know for sure, but from what I hear the Blazer is not the safest SUV in the world. Especially not the way the driver was weaving in and out of traffic, not even bothering to signal. Now this might not sound that uncommon, given that it was on the Whitemud after all.

What gets me though, is that the driver of the Blazer was a twenty-something female. And on top of her speeding and weaving, she was talking on her cell phone. Her insurance is probably less than mine. There’s just something incredibly wrong with that.