Information & Ethics Committee on Dec. 3rd, 2024

[The Chair, Conservative, John Brassard]

I call this meeting to order.

Welcome, everyone, to meeting number 142 of the House of Commons Standing Committee on Access to Information, Privacy and Ethics.

Pursuant to Standing Order 108(3)(h) and the motion adopted by the committee on Tuesday, October 29, 2024, the committee is commencing its study of the privacy practices of delivery and ride-share applications.

I'd like to welcome our witnesses for the first hour today. From the Rideshare Drivers Association of Ontario, I have Mr. George Wedge, who's the president. Welcome, Mr. Wedge, and thank you for your patience.

From Uber Canada, we have Jonathan Hamel, public affairs manager.

What I did was this. We had a second-hour witness who was already in the room, so I've invited her to come to this first panel, which is going to give us a little bit more time with our witnesses today. Because of the votes, we're already 40 minutes past our scheduled time to start.

We also have Vass Bednar, who is the executive director of the master of public policy in digital society program at McMaster University. Thank you for your patience, Ms. Bednar.

I expect that we could go until 5:30 or 5:45. It will be up to the committee members, if they don't have any further questions.

What I'll do, as we have done customarily in the past, is reset and allow for six-minute questions from our friends from the Bloc and the NDP, once we get past this first round. We've done that in the past, so I don't expect there to be any problems with that.

I'm going to start.

Mr. Wedge, you have five minutes to address the committee. Go ahead, sir, please.

[George Wedge, President, Rideshare Drivers Association of Ontario]

Thank you, Mr. Chair and honourable members of this committee, for the invitation to share the inconvenient and unfortunate truths about the gig industry, specifically ride-share technologies operating in Canada.

My name is George Wedge, and I am the president-at-large of the Rideshare Drivers Association of Ontario, commonly known as RDAO. RDAO is an organizing, advocacy and lobbyist association. Our mission is to help governments of all levels understand how the ride-share industry is negatively impacting the lives of citizens, whether they are consumers or service providers, and to help drivers unite for the purpose of helping all levels of government see their way to bylaws, regulations and bills to prevent a monopolistic industry from driving the average wages of blue-collar workers down to third-world levels.

In October of this year, Canadian HR Reporter wrote:

More than one in five (22%) Canadians are participating in gig work of various kinds across the country. That equates to about 7.3 million adults finding work outside of regular employment.

Specific to ride-share, here in Ontario there are well in excess of 120,000 drivers. The number of ride-share drivers in Ontario pales in comparison to the number of delivery drivers in Ontario who depend on one of the fastest-growing industries in Canada: the gig industry. RDAO estimates that 25% of ride-share drivers are full-time drivers. They rely on their net proceeds to feed, clothe and house their families. This is the group of drivers most damaged by the unchecked, unregulated, monopolistic and exploitive tech giants. An overwhelmingly large percentage of ride-share drivers in Ontario are new Canadians, having come here to find a better life, many from third-world and conflict countries.

The big question—after generations of labour movements helped establish workers' rights and minimum wages—is this: How is it possible that more than one million Canadians are forced to accept hourly earnings well below the standard? The simple answer is a lack of transparency. The median hourly wage after expenses and vehicle depreciation for ride-share drivers in Canada is as low as $6.37 per hour, as reported in the peer-reviewed report entitled “Legislated Poverty”.

Uber and Lyft use marketing campaigns and cash incentives to lure unsuspecting drivers into the ride-share driving and gig work industry with vague promises of earnings that simply do not materialize. Recently in the U.S., Lyft settled a civil fine with the FTC for $2.1 million U.S. for misleading prospective drivers. RDAO can't imagine that Uber is immune on this issue, and we speculate their day is already circled on the FTC calendar.

Today was a very important day for RDAO. In the city of Toronto, a report was submitted to the city council executive committee based on one and a half years' worth of study of the vehicle-for-hire industry. In that report, we expected to see recommendations that would make the vehicle-for-hire industry in Toronto, specifically ride-share, taxi and limousine drivers.... We expected to see a road map in there that would create sustainability and wages that could support blue-collar workers. Unfortunately, it didn't materialize exactly the way we expected. We saw two of the three pillars required for the road map, but the third one is currently missing. There's a lot for us to do in that area.

On October 8 of this year, Uber activated its newest feature, which is called “upfront fares”.

Typically in the industry, there's a rate card that estimates a fare for a rider and the payout for a driver based on distance and time. This is what Uber has used since their installation in Ontario some nine years ago. On October 8, Uber activated something called “upfront fares”. There is no rate card. Instead, upfront fares are a three-part feature. The first part of the feature is where the driver gets all of the information for the ride that he expects to see: who he's picking up, where they're going and how long it's going to take them. The artificial part of this now is that they're using AI that looks at the rider, looks at all of their information and all of their history, and decides the maximum amount they can be charged. Then it looks at the driver and does exactly the opposite: What's the minimum amount they'll accept?

[The Chair, Conservative, John Brassard]

I'm sure that some members will have some questions during the rounds, Mr. Wedge. That concludes the five minutes.

Mr. Hamel, you have five minutes for your opening remarks.

Before I give you the floor, I just want to congratulate you for what is, in my opinion, the most beautiful sweater in all of sports hanging behind you there, Monsieur Hamel. It's a beautiful Habs jersey.

Go ahead, Mr. Hamel.

[Jonathan Hamel, Public Affairs Manager, Uber Canada]

Thank you, Mr. Chair.

My name is Jonathan Hamel, and I am a public affairs manager for Uber in Canada. It is a pleasure to be here with you today for your study on delivery services.

Uber is driven by the mission to help people go anywhere, get anything and earn their way. Uber has helped people save time while moving around safely and conveniently. It has created new business opportunities for restaurants, tourism and other local businesses, and provided flexible earning opportunities for drivers and delivery people all over Canada.

Uber Eats first started in Toronto in 2015 and is now available in over 300 cities in all provinces and two territories. It is a three-sided marketplace made up of the consumer, the restaurant and the delivery person. I’ll speak briefly about all three.

Delivery platforms like Uber Eats help Canadians access good-quality, local food regardless of how busy their lives are or what the weather is outside. After a long busy day of working, going to school or caregiving, Canadians turn to Uber Eats to get a meal or order groceries. Almost half of Canadians reported using delivery apps to order food or essential items. Convenience was listed as the most important reason people used Uber Eats.

Uber Eats helps local restaurants grow their business. Thousands of restaurants and other merchants choose to be on Uber Eats because we’re providing services they value, from delivery services and marketing to reaching new customers and growing their customer base.

Just this past year, 85% of Canadian merchants said that Uber Eats gives them access to an additional revenue stream and they’ve increased their revenue since joining the platform. In addition, 70% said that Uber Eats has a positive impact on their business’s ability to manage current economic challenges. Almost 86% said Uber Eats helped increase their business’s ability to reach new customers they otherwise wouldn’t have been able to reach. Finally, 93% said they plan to keep partnering with Uber Eats next year.

Delivery people choose the Uber Eats platform because of the flexibility it gives them. They can earn money on their own terms, and they control where and when they work. They are free to use other apps like Door Dash, Skip or Instacart at the same time as they’re on Uber. They can choose which deliveries to accept, and they can deliver using their own vehicle or bike, or on foot. It is this unparalleled flexibility that draws a diverse group of people to Uber, including newcomers, parents, caregivers, students, retirees, entrepreneurs and more.

As more Canadians turn to Uber to earn flexibly, whether as drivers or delivery people, we believe we need to level up this work. That’s why three years ago we signed a landmark national agreement with the United Food and Commercial Workers, or UFCW Canada, the country’s largest private sector union.

We’ve been working with UFCW Canada to do two things. First, drivers and delivery people can request representation services from UFCW when facing an account issue or deactivation with Uber or Uber Eats, or other issue. These services are offered free of charge—and in the first two years of our agreement, 1,908 workers have had their issue processed, and 457 of them had a positive outcome.

Second, we’ve been advocating for labour reforms that protect flexibility and offer tailored benefits to this type of work, like a minimum earnings standard, a benefits fund, notice of termination, health and safety protections, and representation services.

British Columbia just implemented a 120% minimum earnings guarantee, and Ontario will implement one next year.

In conclusion, we’ve come a long way since our first trip in Canada in 2012. We have gone very fast, sometimes too fast, but we have weathered the storms and learned from our mistakes.

Today, we are listening to people who use the platform, drivers, delivery people and cities to find out how we can make the platform better.

I look forward to answering your questions.

[The Chair, Conservative, John Brassard]

Thank you, Mr. Hamel, for your presentation.

Ms. Bednar, you have five minutes to address the committee. Go ahead, please.

[Vass Bednar, Executive Director, Master of Public Policy in Digital Society Program, McMaster University, As an Individual]

Thank you, Chair.

Thank you to this committee for the honour of appearing. As you heard, I run the master of public policy program at McMaster University. I'm also a contributing columnist for The Globe and Mail's report on business, writing monthly about technology and public policy. I've written about algorithmic pricing. The title was “Algorithms are raising prices for everything. This must stop”—I don't write the headlines. I also host Lately, The Globe and Mail's weekly business podcast. I co-host CIGI's policy show Policy Prompt.

Finally, I am the co-author of a book about competition in Canada. It's called The Big Fix: How Companies Capture Markets and Harm Canadians. My co-author is Denise Hearn. I tell you that in order to contextualize and offer that I'm coming to the committee as a thinker, as somebody who can maybe offer a broader context for these trends. One of the chapters in this book, one of my favourites, is called “Add to Cart: Trust”. It was excerpted in The Walrus, if you're looking for something to scroll through during committee.

I want to mention it, not to give you something to click on but because of what the text reminds the reader that today, “the prices of most goods”—and some services, as we're hearing—“are not set by humans but by automatic processes—algorithms. The use of these systems and their terms are [rarely] disclosed to shoppers, although the aim is often to extract the highest possible price from them. Using intrusive personal data”—this is sometimes called surveillant pricing—“sometimes acquired directly through interactions with consumers”—it's voluntarily shared or collected as some of their exhaust—“and more often bought by third-party data brokers, companies now know our intimate spending habits and can calculate our maximum willingness to pay.” We also state that “online personalized pricing is a different beast. It requires the use of highly invasive data collection and personal identification techniques. This kind of sophisticated price calibration is happening more often, without any sort of consumer consent, disclosure, or labelling.”

I’ve also contributed to journalism covering some of the recent Uber price change, called “upfront pricing”, which you've heard about. This strategy removes the proximate predictability, or some level of predictability, regarding pay that drivers previously had.

I should have said earlier that, back in 2022, I did some broader work on gig work regulation for the Province of Ontario, focusing on gig workers, as a member of Ontario's workforce recovery advisory committee. During that time, in my private time, I delivered for Instacart. I wanted to have the direct experience of having an algorithm for a boss. We can chat about that later, if you want. I didn't like it very much.

I resent how so much of pricing—for consumers and for workers in this monopsonistic gig context—has become an algorithmic hall of mirrors. A columnist who writes for The Atlantic, Charlie Warzel, called this “pricing hell” in a recent column that I really appreciated. At the same time, I find myself quite encouraged by the policy progress, not just in the U.S. but also in Canada, on ending junk fees. We've had a newish focus on identifying and eliminating these.

I'll wrap by telling you a little bit about junk fees and pricing and how they fit into gig work.

When the FTC took on junk fees, they mentioned the following. Forgive me, but all of this is a direct quote. You'll be thinking, “The researcher came and she read us things”, but I'll be ready to talk later. The FTC said:

Food delivery apps are notorious for obfuscating delivery and service fees. A recent survey showed one company’s hidden fee burden is about 15 percent of transaction volume. This company received 288 million orders in 2021 in the U.S. and had an average sale [price] of about $31. Putting these numbers together...this company collected about $1.3 billion from consumers in junk fees.

These were fake fees, irrational fees, passed on to people.

Using the most conservative assumptions, a similar calculation for a competitor—which in the same survey had a hidden fee rate of 7.5 percent—produces $1.5 billion in junk fees. In addition, the leading grocery delivery service had about $25 billion in transaction volume...with about 8% being junk fees.... [B]ased on the best publicly available information—

Again, a lot of this is quite opaque.

—junk fees in food delivery are an estimated $5 billion annually across the [United States].

I've read your motion. I know you're in the process of preparing to study more deeply what these fees are, how they are calculated, what is explained to end-users and what is not, and whether they are ultimately reasonable. I look forward to contributing to your discussion.

Thank you.

[The Chair, Conservative, John Brassard]

Thank you, Ms. Bednar. There was some reaction there when you were talking about those fees. I'm sure there will be some questions on that, so be prepared.

Mr. Barrett is going to start off our six-minute round.

Mr. Barrett, go ahead.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Hamel, how many annual users do you have?

[Jonathan Hamel]

Thank you for the question.

Through you, Mr. Chair, was the question about the number of users, drivers and delivery people, or was it about the number of customers and riders?

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

I'm asking about the number of people who use your service: the people to whom the drivers bring the things and the people whom the drivers move around.

[Jonathan Hamel]

Thank you for the question.

Through you, Mr. Chair, hundreds of thousands of Canadians use our platform every year. Unfortunately, I don't have more specific numbers to share with you.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Okay. Will you undertake to provide the precise numbers to the committee?

[Jonathan Hamel]

Thank you for the question.

Through you, Mr. Chair, I'll take note of that and check with my colleague if we can do so.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

We'll register that as a yes.

For how long do you store user data?

[Jonathan Hamel]

Thank you for the question.

Through you, Mr. Chair, I—

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Mr. Hamel, you don't need to thank me or the chair for the question. Just a reply would be much appreciated.

For how long do you store the data?

[The Chair, Conservative, John Brassard]

Hold on. I'm stopping the clock.

Mr. Hamel, I don't think this is your first appearance before a parliamentary committee.

In this committee, committee members and witnesses address each other directly.

Members' speaking time is limited, and they have little time to ask questions. The witnesses also have limited time to answer.

When Mr. Barrett asks you a question, please answer him directly.

That's how we operate now.

Mr. Barrett, you had a question. I haven't started your time.

I think there are a few technical issues with the interpretation. There's a long delay between questions and answers.

I will grant more time to committee members who want to ask Mr. Hamel questions. I don't know why we're having this issue.

Mr. Barrett, you may continue.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

For how long do you store users' data?

[Jonathan Hamel]

Thank you for the question.

By the way, this is my first time appearing before a committee.

When consumers delete their account, the data are stored for a period of 90 days, unless there are security, fraud prevention, compliance or other account-related issues.

In the case of drivers and delivery people, the time frame can be extended to ensure that we meet our legal obligations when it comes to tax matters, potential litigation and insurance claims.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Do you sell or share anonymized or non-anonymized user or employee data to advertisers or any third party?

[Jonathan Hamel]

Let me be very clear. We don't sell data to third parties.

There may be cases where law enforcement contacts our specialized team, for example.

At Uber, we have a highly specialized team that manages data. The team co-operates with the police to ensure that the law is enforced. When the police make a request for information they need on a specific case they are investigating, we can transfer data to them. Naturally, such cases are handled within a very formal legal framework.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

How many instances of breaches of user data have occurred in Canada?

[Jonathan Hamel]

As far as I know, there was one in 2016.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

How many users were affected?

[Jonathan Hamel]

I don't have that information at my fingertips.