Toronto officials want Uber taxi app out of the city

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Toronto officials want to stop the app-based taxi service Uber in its tracks, turning to the courts to try and prevent the Silicon Valley company from operating in the city, even as the mayor-elect signals he's at odds with that approach.

City lawyers applied for an injunction with the Ontario Superior Court of Justice Tuesday morning, requesting that it order Uber to cease all operations in Toronto.

John Tory, however, issued a statement late Tuesday saying Uber and services like it "are here to stay."

"It is time our regulatory system got in line with evolving consumer demands in the 21st century," it said. "As Mayor, I intend to see that it does, while being fair to all parties, respecting the law and public safety." Mr. Tory later clarified through a spokeswoman that now that city staff have pushed for an injunction, the matter will work its way through the courts.

The city's move makes Toronto the latest in a line of jurisdictions that are struggling with how to regulate emerging businesses that operate outside traditional business models. While Uber describes itself as a ride-sharing service, the city in its court filings argues it is operating as a taxi and limousine broker – matching paying customers with rides – and as such should play by the same rules as everyone else.

A new service introduced by Uber in Toronto this fall that matches drivers not licensed by the city using their own private vehicles adds to concerns about safety and consumer protection, the city states.

"This is not about the technology," said Tracey Cook, Toronto's executive director of municipal licensing and standards. "This is about the service that is being provided. The service that is being provided is that of a taxicab service and we regulate taxicab service in this city."

Ms. Cook said the move is not designed to protect the business interests of existing regulated taxi operators, arguing that no matter how passengers choose to hail a cab – by phone, app or by raising their hand – the city has a duty to ensure their safety.

But by going after Uber, critics say the city is failing to respond to a changing marketplace.

"There's no doubt if the City of Toronto wants to, it can ban anything that is creative," said Joshua Gans, a professor of strategic management at the University of Toronto. Prof. Gans is a frequent user of Uber's service, saying the app allows him to pay using his smartphone and avoids the hassle of fumbling for change. As for safety, he says he ordered an Uber cab driver to pick up his 12-year-old son from school one day when he had lots of stuff to carry home. With the app, he knew who the driver would be and his son did not have to carry cash for the fare.

Uber responded to the city's actions with a statement of its own, saying it is "disappointing that city bureaucrats have deployed expensive legal tactics to attempt to halt progress, limit consumer choice and force a broken transportation model on the public."

Uber, which also operates in Montreal, Ottawa and Halifax, entered the Toronto market in 2012, initially dispatching cabs under its UberTaxi app and limousines under UberBlack. In September, it began operating UberX, a service that uses cars and drivers that operate outside the city's regulations.

In addition to the application for the injunction, Toronto has 36 bylaw charges outstanding against the company related to its operations of a taxi and limousine service without a licence.

Kristine Hubbard, operations manager for Beck Taxi, who came to City Hall Tuesday to hear the announcement, said it is about time Toronto took action.

Ms. Hubbard said she was "pleasantly surprised," by the injunction application, saying that since Uber entered the market, the industry has not seen "support from the city for the people that follow the rules."