Court rules city negligent in how it enforced taxi bylaws when Uber arrived

The City of Ottawa was negligent in enforcing its own taxi bylaws from 2014 until changes were made in 2016 to account for the growing presence of ride-hailing companies like Uber, a judge has ruled.

Ontario Superior Court Justice Marc Smith made the ruling in the class action lawsuit launched by lead plantiffs Metro Taxi Ltd. and plate owners Marc André Way and Iskhak Mail against the City of Ottawa on behalf of taxi plate holders across the city.

The plaintiffs accused the city of negligence for allowing Uber to operate illegally in Ottawa for two years. It also alleged that the city infringed on the Charter rights of plate holders, and that the city's taxi bylaw amounted to an unlawful tax.

Smith found the city did act negligently in its enforcement of taxi bylaws, but did not find it had breached Charter rights or enacted an unlawful tax in reference to taxi fees.

"Uber was permitted to defy the law openly for two years without suffering any consequences whatsoever," Smith said in a ruling issued on May 13. "On the other hand, because of Uber's blatant disregard of the law, the plaintiffs suffered."

The taxi drivers claimed $215 million in damages in their original statement, but Smith has deferred a decision on the penalty to a later date.

Ottawa's taxi industry launched lawsuit against city 

In 2014, Uber started its operations in Ottawa, which caused an uproar among taxi drivers. They argued that the company was operating outside the taxi bylaw framework and disrupting their business, making it difficult for them to make a living. The taxi industry in Ottawa is heavily regulated, and taxi drivers are required to pay fees to operate.

It wasn't until 2016 that city council approved a bylaw allowing private transportation companies like Uber to operate legally. The plaintiffs claimed that the city had allowed Uber to operate illegally for two years before the bylaw was passed.

The city contends regulations for taxis were created to safeguard the public and not to protect the interests of the taxi industry. It also argued it was incapable of preventing Uber's entry into the market and therefore not responsible for any financial losses suffered by taxi companies and plate owners.

"The city adopted a defeatist and acceptance approach to Uber's entry into the Ottawa market," Smith concluded in his 95-page decision.

"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 by-law, the city's enforcement efforts against Uber drivers were ineffective."

City solicitor Stuart Huxley said in a statement the City of Ottawa would be reviewing the decision.

At a press conference on Monday afternoon, Way thanked Justice Smith and said that he hopes to work with the city to "get this resolved ... and correct some of the mistakes that have been done."

"This is great news not only for the taxi industry," he said, "but for all of us who put our faith in Canada's justice system."

Mixed feelings from taxi drivers

Ghassan Skaff has been a taxi driver for more than 34 years and said his feelings on the ruling are mixed.

"I'm happy with the decision that the judge found the city negligent but I was hoping for the other requests," Skaff said.

According to Skaff, his annual income as a taxi driver was around $40,000 before Uber entered the market but has since dwindled to less than $20,000 a year.

"When I go out to work in the morning trust me, I want to puke," Skaff said.

"I don't know where this is going to go from now. It's kind of [too] early to decide."