Toronto taxi owners sue city for $1.7 billion over arrival of Uber, lost plate value

Thestar.com
November 5, 2018
Gilbert Ngabo

Toronto taxi owners and operators have launched a $1.7-billion class action lawsuit alleging the city has failed to properly regulate the private transportation industry and caused the value of taxi plates to plummet.

Three plaintiffs who are owners and operators of taxi services -- Lawrence Eisenberg of Lucky 7 Taxi, Behrouz Khamza of Taxi Action and Sukhvir Thethi of Ambassador Taxi -- are named as plaintiffs in a statement of claim filed to the Ontario Superior Court of Justice on Aug. 21.

Taxicabs line up along Richmond St. in a May 1, 2015, file photo. A group of taxi owners are suing the city for the loss in value of their taxi plates since the arrival of ride-share companies.

They accuse the city of being negligent in its enforcement of bylaws against Uber and other private transportation companies.

The city solicitor’s office filed a statement of defence in September, denying all the allegations and calling for the outright dismissal of the lawsuit.

Both sides are currently waiting for the judge’s certification of the case. Lawyers for the plaintiffs are seeking other licence-holders to join the suit.

“This whole thing has become like a joke,” said Eisenberg about the state of a taxi industry he has been part of for 55 years. He says about five years ago a taxi plate was worth nearly $400,000 but with the arrival of ride-share companies Uber and Lyft, that has decreased to about $30,000.

The lawsuit’s $1.7-billion figure represents the total loss in value for roughly 5,500 licensed taxi plates in the city, approximately $310,000 each since the arrival of the ride-share services, according to the statement of claim.

“My retirement just went down the tubes over the last couple of years,” Eisenberg said, blaming the city for failing to regulate the new companies “until after the fact.”

In the 10-page statement of claim, the plaintiffs say the city has regulated the taxi industry since 1957 and has always acknowledged the value of a taxi plate -- even congratulating a new plate owner on obtaining a “pension” for retirement.

The city has allowed the transfer, sale or lease of the taxi plates and collected “vast sums” from these transactions, ranging from $3,000 to $5,000 each, according to the statement of claim.

In a short statement, city spokesperson Bruce Hawkins said the city has filed its defence “indicating our plan to have this matter heard by the court.”

In its statement of defence, filed on Sept. 20, the city says it is not responsible for any economic devaluation of taxi plates. The city also denies ever referring to taxi plates as a “pension” or form of retirement and says it would not be reasonable for the plaintiffs to rely on such a statement if it was made.

In its statement, the city also denies that it owes any duty to the plaintiffs by virtue of the fact taxi owners require licences to operate, nor their belief in their licences as an asset or form of retirement security.

The arrival of Uber and UberX saturated the taxi transportation industry and caused “considerable financial damage” to taxi plate owners, according to the plaintiffs’ statement of claim, which says there are now anywhere between 50,000 and 75,000 vehicles for hire in the city.

“The city failed to protect the various segments of the Toronto taxi industry -- specifically those of plate owners -- and the public, and was thus, negligent,” the statement reads, alleging the city in 2016 formally allowed Uber to enter a marketplace “in which they had been illegally operating without due regard to the interests of plate owners and the safety of the public.”

The city’s statement of defence explains steps it took to regulate the arrival of Uber and other tech-based transportation companies -- including a failed 2014 court application seeking to stop Uber from operating without the taxicab broker licence.

Eisenberg said all he and his colleagues in the taxi industry want now is “an equal playing field.”

“We have cameras in our cars, we have meters in our cars, safety certificates, stickers,” he said. “If we have to have all these safety items, why shouldn’t they?”

In its statement of defence, the city says it handled the arrival of Uber with “discretion as to the appropriate balancing of competing interests and priorities. The city is not liable in negligence for the manner in which it exercised this legislative authority,” the statement argues.

“If prices for the sale of taxicabs or the income earned by owners has decreased, the decrease is the result of market forces beyond the city’s control for which it is not responsible, and are an expression of consumer preferences that taxicabs have failed to satisfy.”