David Menzies
Canadian Business
June 28, 2000

Ontario puts the brakes on a carpooling service.

When Mike Harris’s Ontario Tories swept into power in 1995, they did so on a Common Sense Revolution platform that boldly promised such free-enterprise reforms as deregulation and the reduction of red tape. Five years later, many sectors that the government could–and should–have opened up to free-market competition (i.e., alcohol sales, casinos) remain stuck in monopoly mode.

Yet, while it’s bad enough that archaic Crown agencies such as the Liquor Control Board of Ontario and the Ontario Lottery and Gaming Corp. are allowed to carry on business as usual, what are free-enterprise proponents to make of the recent plight of Allo Stop Inc. of Montreal? The company, a small operation that arranges carpooling services for a modest fee, was recently banned by the Ontario Highway Transport Board (OHTB) from operating within the province, even though a large chunk of its business involves matching passengers with drivers in the Toronto-Montreal corridor. The company’s crime: providing a low-cost transportation alternative that a growing number of commuters were taking a shine to.

Alas, being entrepreneurial in the transportation sector is irrelevant to the OHTB. Its bureaucrats recently deemed Allo Stop to be an illegal transportation service after acting upon complaints it had received about the carpool service.

And just who filed those complaints? Surprise! None other than the province’s two largest private bus lines, Greyhound Canada Transportation Corp. (with its subsidiary Voyageur Corp.) and Trentway-Wagar Inc. The big bus companies were miffed that Allo Stop might actually be taking a bite out of their ridership. “We’re a regulated industry and you can only carry on transportation for compensation pursuant to an operating licence issued by the regulatory body,” says Jim Devlin, president and CEO of Peterborough, Ont.-based Trentway-Wagar. “I’m a pro-deregulationist… but there are still all kinds of laws we may or may not like, and the fact is, they’re there.”

Are they ever. Even so, Allo Stop wasn’t operating a fly-by-night rule-breaking bus line. Rather, the company–which has been in business for 18 years in Quebec and 10 years in Ontario–was operating what was essentially a matchmaking service for low-income commuters (ranging from students to job seekers) who were simply trying to make ends meet by carpooling. In fact, Allo Stop doesn’t own, lease or operate any vehicles. Instead, it specializes in hooking up drivers with passengers for long-distance commutes. (Passengers pay the driver a small amount to cover gasoline expenditures, and a stipend to Allo Stop. A one-way trip from Montreal to Toronto, for example, will cost a passenger $26, compared to $81.61 for an adult Greyhound bus ticket.)

Allo Stop president Claire Patenaude describes her company as a “micro-enterprise” that provides a much-needed service for people at the bottom end of the economic scale. In fact, Allo Stop is just the sort of forward-thinking entrepreneurial firm you’d think the pro-free-enterprise Tories would love to see flourish in Ontario. Instead, not only was the company told to hit the road–permanently–but it was also slapped with almost $20,000 in costs. Adding insult to injury, the bulk of that amount was payable to the bus companies that complained about Allo Stop in the first place. (This payment was later waived on condition that Allo Stop not appeal the ruling.) Says Patenaude: “It’s inconceivable. How can a government in a civil society not allow people to ride-share?”

The OHTB’s ham-fisted ruling has managed to do the near impossible: enrage people on both ends of the ideological spectrum. Kevin Currie, secretary of the Toronto-based Green Tourism Association, says Allo Stop was both an environmentally and socially responsible enterprise because it offered “an effective use of carpooling to low-income earners.” Meanwhile, Lawrence Solomon, executive director of the Urban Renaissance Institute, a Toronto-based think tank, slams the OHTB’s decision as “an egregious intrusion on people’s rights–it’s another case of the government protecting franchised monopolies in the transportation business.”

For his part, Felix D’Mello, the OHTB’s secretary, simply notes that, well, rules are rules–and that Allo Stop had to be stopped because it was in violation of provincial law. “They were arranging transportation with people who are not licensed by the transport board,” he says. When pressed for details, D’Mello notes that since the OHTB operates at arm’s length from the provincial Ministry of Transportation and is responsible for “quasi-judicial” decisions, “it’s wrong for me to even discuss this.”

Okay, then. So what does the Ontario Ministry of Transportation have to say? Well, not much. Bill Parish, communications assistant to Transportation Minister David Turnbull, says the Allo Stop case “was a decision for the OHTB. I don’t want to comment on that. They [the OHTB] are quasi-judicial, so it wouldn’t be appropriate for the minister’s office to say anything.”

So there you have it: in free-enterprise Ontario, bureaucrats and ministers get away with passing the buck and shrugging off accountability, while a small, albeit growing, entrepreneurial firm is run out of town. Kind of sad, isn’t it?