In winning the Large Public category at IT World Canada’s Digital Transformation Awards, The City of Toronto also learned a few lessons along the way about regulating the sharing economy, laying the groundwork for the plans for AirBnB it announced on Tuesday.

When AirBnB hosts start registering with the City to rent out their homes on a short-term basis, they’ll be doing so with an online system, says Tracey Cook, executive director of municipal licencing and standards at the City of Toronto. “The City needs to know where AirBnB is happening and how it’s being used,” she says.

How the sharing economy service that’s been riding a digital wave of success around the world hasn’t been without controversy. But Cook and the City of Toronto staff at least had the benefit of experience this time around, thanks to facing regulation of Uber’s rogue entry to the market in the Spring of 2016 (Uber first launched its app in Toronto in 2012). The private transportation company is well-known as the app that connects drivers with people looking for a ride, but is also known for operating outside of existing regulations and has been banned from some cities.

“Uber upended and completely disrupted the established taxi industry, Cook says. “It’s what’s been happening around the world.”

Mayor John Tory came out favouring regulation of Uber rather than a ban, a path taken in other municipalities. City council agreed and voted to bring “ride sharing” firm under the city’s regulatory framework. Then they passed the ball to Cook.

“We were under a lot of pressure from all sides of the house to get this done and get moving,” she says. “Failure wasn’t an option.”

Meeting the expectations of Uber drivers that getting on the road is just a few clicks away was a priority. Cook says that a close partnership with CIO Rob Meikle and the City’s IT department was critical.

“If we hadn’t solved the electronics side of this, the digital regime would have failed,” she says. “And that’s just the way the sharing economy operates. You have to be more nimble.”

Meikle and his team was able to develop a digital ‘Vehicle for Hire’ licencing system for private transportation companies that is now seeing $500,000 in monthly revenue. Today, the licences are issued automatically and directly to drivers smartphones. Thanks to the first e-licence in the country, Uber drivers can simply use a mobile app to display their licence to police.

One reason Meikle says he’s proud of his team for the project – they were able to develop the solution with the City’s existing tools. Toronto uses a standalone tool for licencing called Progress.

“We didn’t have to create net new code and we were able to do the changes in the timeframe required,” he says. “It wasn’t overly complicated in terms of using new hardware or software, but changing the footprint we had to meet the new requirements in a collaborative and timely manner.”

Meikle’s team was also able to harness the City’s SAP Business Intelligence solution to collect data about the Uber driver trips, which plays a role in determining the cost of a licence.

“This is an example of where we get to maximize the benefits of digital transformation,” he says. “This is truly transformational and that’s what the city is really going for. It’s a fully automated digital solution to foster better relationships.”

Not only did the city find a way to allow Uber drivers to legally operate, but it took a few pages from the business model to improve the experience for licenced taxi drivers as well. For example, Uber drivers don’t have to complete a training course, but simply watch an operating instruction video and then receive constant feedback and ratings from their customers. They can also have their vehicles inspected by certified mechanics instead of a government source.

Based on recommendations from a MaRS report, the City updated its requirements for licenced taxi drivers to be more in line with that standard.

Among the savings for the city are the reduced manual processing of licences, elimination of city-run vehicle inspections, as well as taxi and limo training. The city estimates 22,500 staff hours were saved.

Cook says that is a result of the automation that was put in place, helping to issue licences at a much higher volume without the need to hire more staff. Also, city staff were freed up from vehicle inspections. Those costs were returned to the industry through lower licence fees.

But the best part of winning the Digital Transformation Award for Cook is feeling like her team is getting recognition for being agile and doing things differently.

“We often get affiliated with red tape and bureaucracy and that’s not necessarily wrong in some cases, but in this case we got it right,” she says.

Now they’ll try to get it right with AirBnB too.

Check out ITWC’s Digital Transformation Award winner video for the city of Toronto below.

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