By Alastair Sharp
TORONTO (Reuters) - Toronto officials on Thursday proposed new rules to allow ride-hailing service Uber to operate in the city and let traditional taxis compete on fares.
Among the recommendations, taxi companies would be permitted to offer lower rates for trips not hailed off the street.
The proposed changes would create a separate license for private transportation companies, which use a smartphone app to connect passengers with private drivers who use their own vehicles.
Uber Technologies Inc's [UBER.UL] private-vehicle drivers are currently unregulated, and taxi supporters were pushing for them to be held to the same rules as taxis.
Under the new proposal, Uber will not be regulated on the fares they charge. While all taxi fares are currently regulated, under the new rules, if a taxi ride is booked through an app or over the phone, the taxi company can offer a lower rate to compete with Uber.
The city filed an injunction last year to stop Uber, and an Ontario court ruled Uber was not operating illegally, just outside regulations.
The city has also charged some Uber drivers with carrying fee-paying passengers without a license, but 14 months later the cases have not been heard.
About 45,000 trips per day are taken in Uber vehicles, according to the city. Uber is the only private app-based transport company currently operating in Toronto.
The suggested rule changes would require a C$2 million minimum insurance coverage for all drivers, but keep distinct rules for each category.
Uber and similar companies that want to enter the market will have to pay a C$20,000 application fee plus C$10 a year per driver and 20 Canadian cents per trip from Toronto.
The proposals will go to a committee that includes many pro-taxi councillors for possible amendments next week before a full council debate next month.
"We have new regulations that create a level playing field, provide safe, convenient options to our residents and allow drivers to earn a competitive living," Toronto Mayor John Tory said in a statement.
Toronto taxi drivers have held protests and gone to court to try to halt Uber. Tory has been working to try to incorporate the service by overhauling regulations.
Uber is fighting for legal status in cities around the world as authorities weigh the legality of its app-based service.
(Editing by Jeffrey Benkoe)