Taxi industry's $215M lawsuit against city finally about to be heard

The $215-million class action lawsuit alleges the City of Ottawa failed to properly protect taxi drivers when it came up with bylaws in 2016 to regulate Uber. The city has said in its own statement of defence that it had no obligation to do so. (Danny Globerman/CBC - image credit)
The $215-million class action lawsuit alleges the City of Ottawa failed to properly protect taxi drivers when it came up with bylaws in 2016 to regulate Uber. The city has said in its own statement of defence that it had no obligation to do so. (Danny Globerman/CBC - image credit)

More than six years after filing a $215-million class-action lawsuit against the City of Ottawa, the local taxi industry will soon have its day in court.

The parent company of Capital Taxi claims the city did not take reasonable steps to protect taxi plate owners when it allowed Uber to operate in September 2016.

The case will finally go to court Jan. 3 and should last at least seven weeks.

Jihad Alkadri has driven a Blueline taxi in Ottawa for 35 years. He says when ride-hailing companies like Uber took to the roads, it put many taxi drivers out of work.

"We couldn't make a living anymore," he said. "The city did not stop Uber from operating. They operated for two years illegally. No license, nothing."

Taxi plates worth little value

Alkadri said that most days he's working 12 hours to make ends meet, something he didn't have to do even five years ago.

"I have to bring at least $250 a day just don't break even or to make a living out there," Alkadri said.

With costly insurance fees, car repairs, and soaring gas prices, the job isn't what it used to be. Adding to all of that, Alkadri says the Uber takeover rendered taxi licenses essentially worthless.

"Prior to 2014, taxi plate licences were selling at $340,000. People mortgaged their homes to buy one of those licenses because it was just buying a job, basically," he said.

"Right now, I'm sorry to say it's $7,000. Probably even less."

Melanie Campeau/CBC
Melanie Campeau/CBC

That's all tied in to one of the claims the suit is bringing forward, in that drivers have experienced a significant financial loss since Uber was given the green light.

Drivers invested in the system based on the regulations that existed before Uber, said Abdalla Barqawi, one of the lawyers representing the industry against the city.

That system was, in a way, their safety net, he said. But when the city passed the bylaw, it changed the landscape by allowing a free-for-all market for everyone who wants to drive.

"They have paid upwards of $300,000 for those plates," Barqawi said. "And then literally in a snap of a finger, that was all gone."

Melanie Campeau/CBC
Melanie Campeau/CBC

Includes discrimination claim

There's no limit to the number of Uber drivers that can operate, whereas the taxi industry is heavily regulated by the city, which only permits a limited number of plates on the road.

That restriction was designed to guarantee that taxi drivers and owners can make a decent living, but Barqawi said the playing field is now uneven.

"It's a combination of loss of plate value, loss of work because of other participants coming into the industry, combined with heavy regulations that still exist for the taxis that don't necessarily exist for other companies like Uber," Barqawi said.

The taxi industry for decades has been predominantly run — and all these plates have been mostly owned — by people who immigrated to Canada, racialized people and visible minorities. - Abdalla Barqawi

In an email, City of Ottawa solicitor David White said they would not be commenting on the lawsuit as it's still before the courts.

The city's initial statement of defence argued that it had no responsibility to protect the taxi industry from any financial losses that might have arisen from the regulatory changes.

What's more, buying and selling taxi plates "created a speculative and artificial secondary market" that the city had nothing to do with other than register the plate transfer, according to the statement.

A similar lawsuit brought forward against the city by the union representing licensed taxi drivers in Ottawa was dismissed in 2018. Barqawi says while this suit does cover similar territory, it also includes a discrimination claim.

"The taxi industry for decades has been predominantly run — and all these plates have been mostly owned — by people who immigrated to Canada, racialized people and visible minorities," Barqawi said.