‘Ottawa’ City Won’t Delay Uber Legalization Because of Massive Taxi Lawsuit
The city won’t delay making Uber legal, even though taxi plate owners are making a potentially precedent-setting claim that they’re owed millions because of a major change in municipal licensing.
“We’re proceeding full-steam ahead,” Mayor Jim Watson said Monday.
“We think the public certainly want choice when it comes to transportation in the City of Ottawa. The taxi industry has really had a monopoly for decades. I’m very comfortable with where we are legally and procedurally to move forward with alternative forms of transportation, like Uber and other ride-sharing companies, on a go-forward basis.”
Uber and any other alternative ride provider can operate legally in Ottawa starting Sept. 30 as long as they adhere to the new rules for “private transportation companies.”
Cabbies are worried about the impact to the value of their taxi plates. The city is opening up the regulations to more ride providers and the market value of a conventional licence plate is decreasing.
It has led to the $215-million lawsuit against the city filed Friday by Metro Taxi co-owner Marc Andre Way, who has the most taxi plates in the city. He is also the vice-president of Coventry Connections and the president of the Canadian Taxi Association.
Way and his lawyer say they won’t comment on the lawsuit outside of court.
The city believes it’s on solid legal footing and says it will fight the claim.
A judge has not heard the arguments on either side and it could be several months until that happens.
It’s believed to be the first lawsuit of its kind in terms of the types of taxi-related claims made against a municipality in Canada, and word is spreading to other cities.
Kristine Hubbard, the operations manager at Beck Taxi in Toronto, said word of the Ottawa lawsuit has reached the taxi industry in that city.
“I think it has got people talking,” Hubbard said. “People will be interested to see what happens.”
The lawsuit should be no surprise to the City of Ottawa, since its consultants brought up the potential of cabbies seeking compensation during the leadup to council’s decision to change the regulations last April. The city even received a legal opinion before bringing the recommendations to council.
The city collects $4,033 every time a taxi plate owner sells its owner status to another person and the fee usually increases with inflation. The city, however, doesn’t get a cut from the market price paid in the transfer of its own plates. It’s an old system that’s similar in other Canadian municipalities.
Values of taxi plates increased under the regulatory scheme because the city controls the number of plates based on population. Cabbies selling city-owned plates, which is allowed under the city’s rules, were collecting six-figure sums.
Judges have heard arguments about how much taxi plates are worth on the open market when deciding on family cases.
A 2010 case put the value of an airport plate at $210,000. Another judge in a divorce decision earlier this year put the value of a regular plate at $185,000 in 2009-2010, based on research and valuations.
The price for a new taxi plate from city hall is $545, plus the taxi driver licence fee.
There are 1,188 taxi plates in Ottawa and most owners are in possession of a single plate. The city is planning to increase the total number by four plates when the new regulations kick in.
Uber arrived in Ottawa in October 2014 and taxi plate owners have complained the market value of their plates has tanked.
Way’s class-action lawsuit is expected to include about 755 Ottawa taxi plate owners who want compensation from city hall, which means nearly everyone who currently has a plate could be involved in the claim.
The lawsuit also accuses the city of failing to enforce the taxi bylaw while Uber operates illegally in Ottawa.
However, bylaw officers ticket Uber drivers, even in this grey period when Uber is only weeks away from being legal.
According to city solicitor Rick O’Connor, 30 charges have been laid against Uber drivers for unlicensed taxi operations since the council decision April 13 and more charges are pending.