May 2019

ATOOL members increasingly optimistic about prospects for certification of their $1.7 Billion class action suit against the City of Toronto

by Mike Beggs

Seeking $1.7 billion-plus in compensation for their losses since Private Transportation Companies (PTC’s ) came to town, Toronto taxi plate owners keep finding glimmers of hope as they await a fall certification hearing for their class action suit against the City.

That ranges from the positive precedents set by the certification of class action suits in Quebec, and Ottawa, to just receiving a $500 contribution from retired shift driver and former Taxi News columnist Peter McSherry.

In mounting this action, the All Toronto Taxi Owners and Operators Association (ATOOL) alleges the City knowingly allowed Uber to operate outside the bylaw for three years, and betrayed a longstanding promise that their plates could be counted on as a principle source of retirement income.

While never a plate-holder in his 41years on the road, McSherry feels owners have long been “ripped off” by the City, under an (alleged) unspoken mandate to drive plate values down to zero and take them over itself, as a money-maker.

“This has made me mad for quite some time,” he says.

“Ánd, this (legal action) strikes me as the best opportunity to right the wrong, in all my years in the business. It’s going to be judged by legal minds -- not politicians, who have a personal interest in taking property away from taxi owners.”

McSherry chipped in, in hopes that other industry members will follow suit.

“I chose to contribute because they’re harming not only owners, but long-time drivers,” he explains. “Where are they going to be driving if the cab business closes down? A lot of them won’t be able to switch to anything else. I think many drivers might consider contributing something.”

“And, I don’t see how they can miss getting certified,” he continues. “It’s very obvious, (the City’s transgressions). The whole industry knows.”

Given the dire straits of the business, owner/operator Frank Kelly suggests, “This law suit is the last kick at the can.”

“I’d pay $500 again, because this is it,” he says. “You’ve got to stand in front of a Judge and say, ‘The City changed their mind, and went in a different direction and because of it we suffered financial loss.’”

“They could have (handled the PTC issue) in 100 different ways. They just went the greedy way,” he adds. “They regulated the taxi industry forever. They legislated everything, and then they stabbed us in the back.”

Kelly suggests the City could charge the PTC’s $1 per ride (instead of 30 cents), “and pay me off.”

This 48-year man is, “just surviving” out there. Meanwhile, the plate he purchased in 1978 has lost almost all value, and his second driver has retired.

“I’m just going to single the car, now,” he relates. “By the time you get driver insurance (it’s not worth it), and the guys don’t want to pay their full shift. I’m going to work another few years, then go into semi-retirement. Business isn’t as good.”

“I just hope the full law suit goes through for whatever we ask. I hope the City gets burned. I’d just sit there and say, ‘How does it feel?’”

Owner Bob Boyd believes the class action will have legs, because the way unlicensed Uber cars were allowed to work the streets for three years, and how PTC’s are regulated under Bylaw 546 amounts to, “total negligence from the City.”

He claims that starts right at the top, as, “(Mayor John) Tory doesn’t really care about taxi drivers.”

“This City government, they know they’ve made some terrible blunders, but they’re not going to admit it. We explained everything to them,” he offers.

“In the last 25 years, these governments all literally raked the taxi industry over the coals.”

With the class actions moving forward in Ottawa and Quebec, long-time taxi industry observer Rita Smith agrees the Toronto owners have a good shot.

“I hope they’re successful, knowing how much they lost. The vow was broken -- and people have been ruined,” she comments.

“From the point of view of businesses, shouldn’t you have been able to believe the City, before investing your life in it? Why put in rules and regulations if you don’t follow them? Before (Bylaw 546), the City was tracking your business completely.”

While not directly related to their cause, Toronto plate-holders could also take heart in a recent Court of Appeal of Ontario ruling allowing a proposed class action by Uber drivers against the company to go ahead. A three-Judge panel ruled that a clause in Uber’s service agreement requiring all disputes to go through arbitration in the Netherlands amounts to, “illegally outsourcing an employment standard, and therefore cannot stand.”

According to a CBC report, the Court of Appeal further concluded that the clause takes advantage of the significant power and financial disparity between Uber and its’ drivers, who would bear up to $14,500 (US) in filing fees just to launch the arbitration process.

“I believe it can be safely concluded that Uber chose this arbitration clause, in order to favour itself and thus take advantage of its’ drivers, who are clearly vulnerable to the market strength of Uber,” the appeal court ruled. “It is a reasonable inference that Uber did so knowingly and intentionally.”

This law suit had been stayed in 2018 by a motion Judge, who ruled Uber drivers were bound by the arbitration clause. But the Appeal Court determined the motion Judge erred on several points, including in considering the arbitration clause to be like the kind seen in “normal commercial contracts where the parties are relatively equal in power and sophistication.”

An Uber Canada spokesperson told CBC the company will review the appeal ruling.

The plaintiff, 35-year-old UberEats driver David Heller argued that Uber drivers are employees, entitled to a minimum wage, vacation pay, etc.

One of his solicitors, Lior Samafiur told CBC the decision, “confirms that employment law actually matters in Ontario, and that you can’t deprive workers of their legal rights by sending them 6,000 kms. overseas to enforce those rights.

“The court sent a loud and clear message that this is illegal in Ontario,” she told CBC.

Veteran Toronto owner/operator Gerry Manley is among those to suggest this sets a “massive” precedent, coupled with the fact that California Uber drivers have been given permission to seek similar concessions in the courts.

“I think (the case) is even stronger in Toronto,” he tells Taxi News. “When you look at the bylaw, (PTC drivers) can only do prearranged pickups. So, they’re not a self-employed contractor, they’re a dedicated employee. I don’t know how Uber can argue that.”

Manley also points to the importance of a Province of Quebec decision to increase the compensation package for cab industry members (to $770 million), to be offset by raising the per-trip ridesharing fee to 90 cents.

In going down this path, Mississauga plate owner Peter Pellier maintains, “Quebec has set a precedent regarding the need to compensate taxi drivers and owners over the decimation of their livelihoods, plate values, and pensions.”

Manley stresses that in providing this compensation, Quebec didn’t prohibit cab operators from suing the Province

“So, here you have a province that has admitted liability,” he suggests. “That’s what they did.”

“They’ve already paid compensation. They’ve admitted their liability. That should be a very strong point for our case.”

A co-plaintiff in ATOOL’s class action, driver Behrouz Khamseh concurs.

“For sure. Quebec is part of Canada. (These little victories) are, absolutely, starting to add up.”

Fellow ATOOL steering committee member, and owner Andy Reti notes that while this admission of liability is “very important”, the Quebec and Ontario regulatory systems are different.

“They’re licensed provincially, (but we’re licensed municipally),” he notes. “It can’t hurt us, but I’m not relying on that.”

Reti reports that, ATOOL filed its’ Motion Material to the courts, as per schedule. And while the City had until the end of April to respond, at press time it still had not done so.

“Why would they hurry? What’s the rush for them?” he asks. “Remember, the $13.36 million (they collected last year on the PTC $0.30 per trip fee).”

“And don’t forget, under provincial law you can’t use licensing as taxation,” he adds. “Nice cost recovery.”


© 2019 Taxi News



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