Uber taking Toronto to court, alleging move to cap rideshare vehicles is ‘illegal’

Uber Canada is taking Toronto to court in an effort to reverse the city’s decision to limit the number of rideshare vehicles on its streets.

The company filed an injunction with the Ontario Supreme Court on Monday, alleging the move to put a cap on rideshare licences is illegal and would irreparably harm its business.

“Mayor (Olivia) Chow’s arbitrary rideshare cap is illegal,” reads a statement from the company. “Mayor Chow is making life harder and less affordable for Torontonians by increasing wait times and costs and limiting an economic opportunity.”

City Council voted 16 to 7 in favour of the cap during its October meeting. No new licences to private transportation companies, including Uber and Lyft, will be issued until a staff report on regulating the industry is completed by the end of 2024.

Chow has argued that the rideshare licence cap will reduce pollution and downtown congestion. Other councillors have warned the move could potentially open council up to legal risks.

Uber issued a statement shortly after the vote, saying the cap will hurt residents who rely on rideshare and hurt their drivers’ income, noting the company was reviewing their legal options.

Corporate Communications Lead for Uber, Keerthana Rang, said there were a number of reasons they decided to pursue legal action, including the city’s failure to provide advance notice of this to the public, drivers or impacted stakeholders.

“[And] it discriminates between prospective drivers and existing drivers in between drivers who own a vehicle, or would rather rent or lease their vehicle,” added Rang.

The company’s claims must still be tried in court, but the company is hoping the council will reverse the decision at its December meeting.

“Council can temporarily pause their illegal cap while the main motion is being heard by the courts,” Uber says in a statement. “Council could also choose to pause or reverse their decision altogether, eliminating the need for any court action.”

Mayor Olivia Chow said she could not comment on the lawsuit as it is now before the courts, but added, “I do want to let you know that our legal department is preparing a defense.”

When asked whether they could see the issue revisited by City Council, Chow said, “I can’t tell what councillors are going to do because different councillors will do different things.”

“I really can’t comment on the item other than the fact that this congestion, especially in downtown Toronto, cost the cities and all the companies billions of dollars on lost productivity and the greenhouse gas emission because of [the] transportation of cars is substantial. And that was the reason why the City of Toronto took the action,” she added.

Ridefair Toronto, which is a coalition of environmental organizations and rideshare drivers, among others, that has been supportive of the temporary pause of issuing vehicle license, say they have retained legal counsel and will be reviewing their legal options related to Uber’s lawsuit.

Ridefair Toronto, a coalition of environmental organizations, rideshare drivers, and transit and transportation advocates, supports the City’s temporary pause of issuing vehicle-for-hire licenses.

“Limiting the number of Uber cars circulating empty and unpaid on average 48 per cent of the time, according to the City of Toronto data, reduces traffic, congestion, and emissions and allows drivers to increase their engaged time and, therewith, earnings,” read their statement to CityNews.

“Allowing unrestricted growth and adding tens of thousands of cars into an already congested city harms our environment and causes hardship to drivers who are already underutilized and underpaid.”

With files from Meredith Bond of CityNews