Judge tosses taxi union's Uber lawsuit

An Ontario Superior Court judge has dismissed a lawsuit by the union representing licensed taxi drivers in Ottawa that claimed the city treated its members unfairly when it paved the way for Uber and similar companies to enter the local market.

Union representing licensed cabbies claimed city acted in bad faith when it legalized ride-hailing model

The union representing taxi drivers in Ottawa accused the city of acting in bad faith and misleading the industry when it legalized companies such as Uber. (CBC)

An Ontario Superior Court judge has dismissed a lawsuit by the union representing licensed taxi drivers in Ottawa that claimed the city treated its members unfairly when it paved the way for Uber and similar companies to enter the local market.

Uber began operating in Ottawa in 2014. In September 2016, the city amended its taxi bylaw by creating a new category of licence, essentially legalizing the ride-hailing company's business model.

The union accused the city of acting in bad faith and misleading the industry, but Justice Maria Linhares de Sousa said Wednesday those claims are unfounded.

"The applicants have not proven bad faith on the part of the city," de Sousa wrote in her decision.

Union claims double standard

The union's legal team argued taxi drivers were promised a "level playing field" when the city opened the door to app-based ride companies, but were instead left out.

Under the existing rules, companies like Uber and Lyft must obtain a licence from the city to operate. But unlike taxi plate owners, individual Uber driver don't have to pay an annual fee.

The union argued the double standard provides a competitive "bonus" to app-based ride-hailing services.

Union president Nega Haile said they're disappointed in the ruling.

"We will be assessing the decisions with our lawyers and we'll determine what options we might have in the future.

He said ride-hailing companies entrance into the market has been terrible for taxi drivers.

"It is really, really devastating, the hard working taxi drivers and their families are suffering from this."

But de Sousa agreed with the city's legal team, which said the rules are based on the differences between the business models of traditional cabs and Uber.

"I am not prepared to interfere with the city's discretion to make regulatory distinctions that it did in the bylaw," she wrote.

That means current rules will remain in effect, according to city solicitor Rick O'Connor in a memo to city council. 

Class action pending

This isn't the only legal action pending against the city in light of council's decision to legalize Uber.

In January a judge gave Ottawa taxi plate owners the go-ahead to proceed with the largest lawsuit ever filed against the city, claiming council's decision to allow Uber and similar companies to operate legally is discriminatory.

The class action claiming $215 million in damages was filed by the parent company of Capital Taxi and Marc Andre Way, whose family is the single-largest owner of taxi plates in the city.  

In its response to the lawsuit in 2016, the city said it has no obligation to protect the taxi industry from financial losses, and argued the $215-million claim is grossly exaggerated.

Since the bylaw was approved in 2016, Lyft, Uber's main competitor, has also joined the Ottawa market.