Uber has warned that ridesharing companies could face increased costs and longer wait times after Toronto announced on Tuesday that it would freeze the issuance of new licenses for the industry.
In a statement, the city said that the decision was necessary in order to prevent increasing congestion in the city’s streets and to “to preserve the integrity of our system for both licensed taxis and unlicensed and unauthorized vehicles for hire.”
The statement also said that shutting down the industry would be “far from the best solution” but that the city wanted to use its next two-and-a-half years to see how the current system worked.
“We are committed to reaching agreement with existing and new drivers, and everyone who uses the system — so Toronto’s transit, tourism and transportation network can grow,” the statement said.
Despite the recent landmark agreement the city signed with the province of Ontario, which sets up and oversees a new municipal licensing authority, it seems that the Ontario government could be opposed to any further growth of the industry.
After the announcement, the minister responsible for the government’s efforts to cut costs for Ontario consumers, Rod Phillips, insisted that “The city should have dealt with the issue before we reached agreement with the City.”
While it is currently unclear what, if any, compensation will be offered to the hundreds of drivers affected by the city’s decision, it seems likely that Uber will have to pay the bills as the slow down takes effect.