Uber plans to pull all of its drivers from Calgary roads early Saturday morning to comply with an injunction that was approved by a judge on Friday.
The city made the application so drivers would not be able to operate until council updates its bylaws to regulate ride-hailing services to meet safety, insurance and regulatory requirements.
"This is a sad day for hardworking Calgarians and we are in active discussions with the city so that affordable and reliable rides are available again soon," Uber Alberta general manager Ramit Kar said in a statement.
- MORE CALGARY NEWS | Major drugs, weapons bust likely linked to suspected gang violence, police say
- MORE CALGARY NEWS | Alberta engineer Anna Hudson drowns in Mexico on wedding vacation
The judged ruled that hundreds of Uber drivers are breaking the law if they get behind the wheel to offer rides in a program that is already operating successfully in cities around the world.
The judge said the city's bylaw has been contravened "deliberately and continuously."
Colleen Sinclair, a city lawyer, says she hopes the temporary injunction will stop the practice until the next court date of Dec. 17, but if drivers continue to operate there could be court sanctions.
"If the city can establish that they breached the court order ... they can be held in contempt of court and there is all manner of sanctions that can occur including fines and jail time," Sinclair said.
"But only if the city can establish that they have breached this order after they have become aware of it."
Uber has told drivers their personal insurance provides primary coverage, while each ride is also covered by the company's contingent coverage up to $5 million for personal injury and property damage.
However, the city says a driver's personal insurance is nullified when riders in private, unlicensed vehicles are injured.
Don Carruthers, one of the 57 drivers named in the injunction, told CBC News in a previous interview that the city's approach has been heavy-handed.
The retired engineer who signed on with Uber to drive part-time says the company goes to great lengths to check a driver's background, including their banking records and the history of their vehicle.
"You go through several steps," he said. "It actually wasn't very easy."
Caruthers says part of the problem is that city councillors aren't of the smartphone generation and don't understand that Uber's customers appreciate the efficiency of the app-based service.
Edmonton also plans to review the Calgary decision but an official said it is too early to determine how it will affect the company's operations in that city.