Did the city fail the taxi industry when Uber arrived? Judge will finally decide

After seven years, the second-biggest lawsuit ever filed against the City of Ottawa is one step closer to the end after closing arguments were heard at trial this week — but a decision might still be a long way off.

Four taxi brokers and 768 taxi licence plate owners allege the city negligently failed to enforce its old taxi bylaw when Uber burst onto the scene from 2014 to 2016.

By allowing ride-hailing services to enter the market and devalue the worth of their plates, they allege the city discriminated against their Charter and human rights as an overwhelmingly racialized and marginalized group that includes many immigrants.

The plaintiffs also allege fees the city collects — for plate applications, renewals and transfers, broker applications and renewals and processing — constitute an unlawful tax.

The $215-million class action was the largest lawsuit ever filed against the city when it was launched in 2016, edged out only in 2022 by Rideau Transit Group's $225-million counterclaim over the LRT delay.

City 'abandoned' taxi industry, plaintiffs allege

In Superior Court Tuesday, Thomas Conway, who leads the Conway Litigation team representing the plaintiffs, said the city essentially "closed its eyes" and "turned its back" on the city's taxi industry when Uber showed up, succumbing "to the lobbying and power of a multinational corporation."

When the city officially allowed it to operate in its new vehicle-for-hire bylaw two years later, Conway said the city "abandoned a half-century commitment" it had made decades earlier in a symbiotic taxi licence supply management scheme instituted to the benefit of both sides.

Shooting back in his own closing arguments later in the afternoon, defence lawyer Todd Burke said the plaintiffs basically want to transform the city from a regulator into a "guarantor of financial returns" and "insurer of speculative investments" on taxi plates at prices the city had no say in or control over, except to mark how much they sold for when they changed hands.

The case has been widely watched among taxi drivers. The trial was held in person and virtually, meaning people were able to tune in via Zoom. This week, dozens watched at any given time.

Taxi driver Garish Beri watching the civil trial on Zoom from his phone on Jan. 30, 2023. (Sara Frizzell/CBC)

Trial split up into 2 parts, damages phase not yet heard

Ontario Superior Court Justice Marc Smith heard evidence on the merits of the case over a span of two months starting in January.

Evidence on the money — the damages — could be heard later on. It's typically heard along with the merits, but the judge decided to adjourn the remedy phase after delays in the proceedings. Dates for the second portion have not yet been scheduled.

It's possible that may not have to happen, Conway told court Tuesday. If the judge finds the city liable, the parties might work out a settlement outside of court, Conway said.

Witness testimony included the city's Christine Hartig, who was project manager for the vehicle-for-hire review; now-retired Susan Jones, who was an acting deputy city manager and oversaw taxi licensing; and Marc André Way, president and CEO of both Metro Taxi Ltd. and dispatcher Coventry Connections, who owns 99 plates.

Other witnesses included Ziad Mezher, a taxi driver who testified he bought a plate for $50,000 in 2003; Iskhak Mail, a retired driver and plate owner who said he bought it for $325,000 in 2013; Yeshlita Dadi, a driver who said he bought a plate in 2007 for $210,000; and Antoine El-Feghaly, a driver who said he bought one for $320,000 in 2010.

Conway said allowing ride-hailing services like Uber "decimated" the value of those assets, held by a group of people who are about 90 per cent racialized. The city's actions "amounted to discrimination on the basis of race and ethnic origins," he concluded.

Council chambers was packed on April 13, 2016, as city council reviewed a proposal to change taxi regulations and legalize ride-hailing services such as Uber. (Chloé Fedio/CBC)

Governments not responsible for financial impacts of change

The city, represented by Gowling WLG, contends it owed no duty of care in the enforcement of the old taxi bylaw when the "new and unprecedented technological platform" arrived, and if it did, it was off the hook because the city "acted reasonably and in good faith" by targeting and ticketing Uber drivers, Burke said.

As for the discrimination, the defendants contend plate holders aren't economically disadvantaged, and evidence suggests drivers for ride-hailing services are also predominantly racialized immigrants who benefited from the changed bylaw — among other arguments. Burke said there was no evidence of a Charter breach, and even if there were, it would be justified under the "reasonable limits" section of the Charter.

The fees, meanwhile, are lawful and were uncontested for years, Burke said. If the judge finds the fees unlawful, the plaintiffs should only get two years of restitution, he added.

Burke told court it's "folly" to think governments should be responsible for the financial implications of change when things like new technology arise. While we can all appreciate the real "dissatisfaction" of the plaintiffs, Burke said, it doesn't mean the city becomes liable.

Now that closing arguments are finished, Justice Smith will take some months to make and release his decision.

Counsel for the city declined to comment when the trial wrapped Wednesday, saying the case is still before the court.

Outside the courthouse, Way said he thinks it "looks very promising" for the plaintiffs despite some "very good arguments" from the city. As for the case's importance seven years later, Way said regulators need to be reminded when making sweeping changes to consider those who have invested in a business.