Protest signs lean against a fence with a Canadian flag stuck in the top during a taxi driver rally protesting against the ride sharing service Uber in February, 2016 on Parliament Hill in Ottawa.Adrian Wyld/The Canadian Press
An Ontario Superior Court judge sided with taxi drivers in their class-action lawsuit against the City of Ottawa, finding that the municipality failed to prepare for the arrival of Uber or to stand up to the company as it operated illegally a decade ago.
Justice Marc Smith was scathing in his assessment of Uber Technologies Inc.’s UBER-N tactics, which he described as scofflaw and predatory. But he blamed the city for not preventing the company’s intrusion.
“Uber bullied its way into the Ottawa market, and for two years, ignored regulations and operated freely and illegally, without any serious restrictions,” he wrote in a decision released Monday.
“The City’s arguments can be summarized as follows: defeat was inevitable. Uber’s operations in Ottawa could not have been prevented. I disagree. Defeat is almost assured when one believes that defeat is inevitable. There are examples where Uber was defeated.”
The lawsuit is seeking $215-million. The judge accepted that the arrival of Uber did serious financial harm to Ottawa cabbies, but did not rule on damages. The plaintiffs – who represent 768 people with nearly 1,200 taxi plates – will have to return to court to establish what losses they suffered.
One of the plaintiffs suggested the group was open to settling with the city.
“We have a new mayor, we have new councillors,” said Marc André Way, president of the Canadian Taxi Association. He is also chief executive officer of Coventry Connections, which in 2022 had 63 taxi plates, according to the decision, and he had 99 himself.
“We want to work with them and see if there’s some way that we can get this resolved. I think it’s time for the industry and the city to find a way to collaborate and then correct some of the mistakes that have been done, and we’re very open to that.”
The City of Ottawa forwarded a written statement, attributed to city solicitor Stuart Huxley, saying that staff “will be carefully reviewing the court’s decision before determining next steps.”
Uber’s spokespeople did not respond to requests for comment in time for publication.
The suit was filed in 2016 and certified two years later. The trial itself happened early in 2023, after both sides agreed to dismiss the part of the suit dealing with whether the bylaw Ottawa passed in 2016 allowing Uber to operate legally in the city was itself unlawful.
Although Uber is now a widely established and well-used transportation provider, the lawsuit deals with the period from 2014 to 2016. A decade ago, Uber was still an upstart pushing into cities worldwide, ignoring bylaws and sparking huge protests from the taxi industry.
Ottawa was among the cities that had for years capped the number of taxi plates, which had the effect of inflating their value. When Uber arrived, cabbies who had banked on selling their plate and retiring on the proceeds were suddenly holding a much less valuable commodity. This would have a particularly devastating effect on those people owning multiple plates.
Asked to protect this asset, many city governments took the position that Uber could not be stopped.
This was Ottawa’s approach. However, Justice Smith noted that the city had previously cracked down on illegal taxi drivers and brokers, and could have done so again under the bylaw in place at the time.
“Uber was a bandit taxicab company, and the city knew, by experience, that failure to enforce against a bandit company would have a devastating impact on the licensed taxi industry,” he wrote.
“Therefore, I have no difficulty in finding that the city knew or ought to have known that failure to enforce the 2012 by-law against Uber resulted in reasonably foreseeable harm to the plaintiffs.”
Abdalla Barqawi, a lawyer for the plaintiffs, said the ruling was a message to municipalities to act prudently when creating regulatory structures that attract investment.
“Both in our specific case for the individuals being affected and more broadly, the case is very significant,” he said.
The judge did not find that the city’s negligence in enforcing the taxi bylaw contravened the Charter of Rights and Freedoms or Human Rights Code, even though the consequences were borne by a racialized group of plate-owners.
Lawsuits related to Uber have had limited success. Justice Smith noted that, in Toronto, a judge refused to certify a class-action lawsuit against Uber for alleged negligence because the city’s duty of care was to the public as a whole.
However, suits continue to be filed. Earlier this month, the BBC reported that London cab drivers had filed a £250-million ($429-million) lawsuit against Uber, alleging the company acted deceptively to secure a licence to operate in the British capital.