An Ontario Superior Court judge has ruled that the City of Ottawa was negligent in its enforcement of the city’s taxi bylaw when it allowed Uber to begin operating in 2014, harming the city’s established taxi industry.
Metro Taxi and plate owners Marc André Way and Iskhak Mail filed a class action lawsuit against the City of Ottawa on behalf of taxi plate holders in the city in 2016. It alleged the City was negligent in allowing Uber to operate illegally in Ottawa for two years, that the City infringed on the Charter rights of plateholders and that the City’s taxi bylaw constituted an unlawful tax.
Justice Marc Smith concluded that the City was negligent in its enforcement of the 2012 taxi bylaw, but that it did not infringe upon the Charter rights of taxi drivers, nor that the fees collected by the taxi bylaw are an unlawful tax.
“The City’s response to Uber’s arrival was negligent, causing harm to the taxi industry,” Smith wrote in his decision. “The City capitulated to Uber’s bullying tactics when it entered the Ottawa market.”
Uber began operating in Ottawa in 2014. Taxi drivers argued the arrival of the company, which was operating outside the framework of the taxi bylaw, was disrupting business and harming their ability to make a living. The taxi industry in Ottawa is heavily regulated, requiring taxi drivers to pay fees to operate.
It would take until 2016 before council would approve a bylaw that allowed for the operation of “private transportation companies” such as Uber. Plaintiffs argued the City allowed Uber to operate illegally for two years before the bylaw was passed.
The City argued that taxi regulations were meant to protect the public and not the interests of the taxi industry and that it acted “reasonably and in good faith” once it chose to enforce the 2012 taxi bylaw, especially against “a new and unprecedented technological platform like Uber.”
The City also claimed that it was unable to prevent Uber’s entry into the market and is therefore not responsible for any financial losses suffered by taxi companies and plate owners.
Smith said that the City had adopted a “defeatist and acceptance approach” to Uber’s entry into the Ottawa market.
“Uber was permitted to defy the law openly for two years without suffering any consequences whatsoever. On the other hand, because of Uber’s blatant disregard of the law, the Plaintiffs suffered,” Smith wrote.
“The evidence establishes that the City knew that its failure to properly enforce the 2012 Bylaw would likely cause harm to the taxi industry.
“A multinational giant was invading Ottawa, and because of the City’s unpreparedness and its lack of efforts to develop a plan to enforce the 2012 Bylaw, the City’s enforcement efforts against Uber drivers were ineffective.”
The lawsuit had also alleged that the 2016 bylaw that allowed ridesharing companies to operate was unlawful, but all parties agreed to dismiss that issue at the start of the trial.
Determination of damages will be decided later. The lawsuit was seeking $215 million.