An Uber driver in Toronto in December. Two new rideshare companies, Hopp and Hovr, have entered the Toronto market.Christopher Katsarov/The Globe and Mail
Two new rideshare companies – one Canadian and one European – have entered the Toronto market in an attempt to compete with ride-hailing behemoths Uber UBER-N and Lyft LYFT-Q and capitalize on the wave of domestic patriotism that is driving Canadian consumers away from American brands in light of the trade war.
Hopp, an Estonian rideshare company that also owns and operates the popular app Bolt, began service in Toronto in February and expanded into the Greater Toronto Area in June. David Riggs, the company’s general manager, said Hopp’s driver base has grown significantly since its launch – from 1,700 drivers to more than 26,000 – and the platform facilitates tens of thousands of rides daily across the GTA.
Hovr, a Toronto-based ridesharing app that has been operating since May, 2024, is vying for a greater share of the city’s rider market. Its business model is premised on paying drivers a fair wage, with founder and CEO Harrison Amit hoping the backlash to Uber’s use of algorithms to determine compensation – which often results in drivers getting paid different amounts for the same distance – will draw more ethical consumers to its app.
Hovr is expanding its services across the country this summer, with plans to launch in all major Canadian cities by September.
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Despite the challenge of competing with the incumbents, Mr. Riggs believes that Canadians are ready for more options, especially amid the trade war.
“We came in at an opportune time. The Canadian ride-hailing market has been dominated by the Uber-Lyft duopoly for a long time and is ripe for disruption. Canadians were also looking for an alternative to supporting American businesses,” Mr. Riggs said in a recent interview.
But both companies are facing an uphill battle: Uber and Lyft are able to offer rides at competitive prices and, most critically, have low wait-times. Drivers for rideshare companies are independent contractors, meaning they are not bound by one employer and tend to drive on multiple apps. But because Uber and Lyft are more popular services in Toronto, drivers on those platforms usually have less time to take requests from Hopp and Hovr, leaving those riders with longer wait times.
As an experiment, The Globe and Mail ordered four rides on each new app. Two were short rides under 10 minutes, and two were longer rides. On Hopp, wait times for all rides averaged between nine and 12 minutes. On Hovr, only one of the rides materialized, after a 14 minute wait. There were no drivers available for the other three rides. By contrast, wait times for Uber or Lyft for both short and long rides were under five minutes on average.
Drivers for rideshare companies are not bound by one employer and tend to drive on multiple apps.Christopher Katsarov/The Globe and Mail
Hopp is attempting to eat away at the incumbents by offering discounted prices to riders. According to Mr. Riggs, Hopp’s average fare for short trips under 10 kilometres is $12.51. The app’s discounts make its rides cheaper than Uber and Lyft.
Mr. Riggs declined to comment specifically on the extent to which Hopp has managed to chip away at those companies’ market share. He said Hopp now operates in all GTA suburbs and intends to expand beyond Ontario. The summer months are critical, Mr. Riggs added, because of the need for more rideshare options during major events.
To use Hovr, drivers have to pay a monthly membership fee of $20, but are guaranteed a take-home rate that is the entirety of the rider fare, similar to the taxi model. However, Mr. Amit admits that Hovr has not made the kind of gains he hoped it would in one year.
“Hopp entering the scene definitely changed things for us. It was hard to go head-to-head with Hopp’s huge marketing budget,” Mr. Amit said. “So we spent the last one year making sure our app was running smoothly and sorting out glitches. This coming year, we’re going to focus on getting the Canadian customer to know the Hovr brand.”
Uber has a 76 per cent market share in the U.S., according to a 2024 report from Bloomberg. But in Canada, there is scant public information on Uber’s ridership compared to Lyft.
Uber Canada spokesperson Keerthana Rang did not respond specifically to questions about the company’s market dominance and whether new competitors have eaten into its business. Ms. Rang said Uber welcomes other rideshare options.
Keldon Bester, executive director of the Canadian Anti-Monopoly Project and a fellow at the Centre for International Governance Innovation, believes there is room for competitors in the rideshare space.
“It is not a given to me that we are locked into an Uber monopoly position. When you get comfortable and set in your ways, a corporate bureaucracy emerges and this creates space for a competitor with a different angle to enter,” he said.
Mr. Bester noted that one of the biggest hiccups for new entrants in the Toronto rideshare space is the city’s licensing rules. Drivers have to obtain a licence for each ride-hailing app they use, which costs between $75 and $225 including driver training.
“This is a good example of regulations that benefit the company that already exists,” he said. “Drivers should be able to have their own labour competed for, but you have a system where there’s a regulatory barrier for a new entrant.”
Hovr covers the cost of rideshare licences for drivers, according to Mr. Amit. For now, his focus remains on building a base of loyal riders who believe in paying drivers fairly.
“Ultimately, you’re never going to retain riders or drivers in a meaningful way if the take home pay for drivers is unsustainable. We’re going to continue to do things differently.”