April 2019

Mississauga and Toronto taxi owners differ on question of appropriate compensation for business losses suffered in wake of sweeping regulatory changes

by Mike Beggs

In seeking restitution from their respective cities for the devastation caused by ridesharing companies like Uber and Lyft, taxi plate owners in Toronto and Mississauga are taking decidedly different tacks.

While still awaiting a certification hearing in mid-October, Toronto’s All Taxi Owners and Operators Ltd. (ATOOL) is seeking more than $1.7-billion in a proposed class action suit on behalf of the industry’s 5,500 plate owners. By contrast, their 905 West counterparts are attempting to work with their Public Vehicle Advisory Committee, requesting compensation of $50,000 per owner from the municipality. (A staff report is forthcoming, and Council is expected to decide on their request later this month).

While Toronto owners are seeking the top-end value of their plates ($380,000), Mississauga plate-holder Peter Pellier suggests, “in cases involving compensation for losses, victims need to be reasonable -- particularly where governments are the defendants, seeing as proving negligence is so difficult.

“Those of us in Mississauga felt that $50,000 was more of a reasonable amount, an amount the City just might consider granting, particularly with the prospect of a buy-back arrangement,” he says. “Half a load is better than none.”

He acknowledges this would take a major shift in attitude from Mayor Bonnie Crombie, but hopes, “a staff report clearly demonstrating there are precedents for compensation in other jurisdictions might just afford her sufficient food for thought.”

He warns the City of Toronto can be expected to appeal any decision in the owners’ favour – with a whole team of lawyers at its disposal.

“It has become apparent the City of Toronto has no interest whatsoever in expediting your class action suit by agreeing to its’ certification,” he adds. “The longer it drags out, the more it will cost you and your colleagues in legal fees.”

However, Toronto owner/operator Gerry Manley feels the Mississauga owners are shooting “way too low”, given that their plate values have dwindled down to around $10,000, leases now go for just $100 to $200 per month, and fares have dropped off by about 70 percent.

“This is what the 50-year Mississauga taxi owner is willing to accept as a reasonable return on his/her lifetime business investment?” he asks.

“I’d rather start high and work my way down. They tell me their license was up to $200,000 at its’ peak, so their request asks for only 25 percent of the value of the license.”

And, he notes that $50,000 award would not recover any of the owner/driver’s lost wages. While not having firsthand knowledge of the Mississauga numbers, he estimates, on average, each Toronto cab driver has lost 10 runs a day at $13 a run. This amounts to $130 a day, approximately $780 a week, or $39,000 a year for the seven years Uber has been working in the Greater Toronto Area.

“So, we’ve lost an estimated $276,000 in income, on average, from 2012 through 2018,” he relates.

And he notes that doesn’t include their loss in leasing income. With Toronto rates having dropped from a high of around $1,800 per month to $200 to $300 a month, he estimates each owner has lost approximately $72,000 over the past six years.

Long-time Toronto independent Aldo Marchese agrees the compensation Mississauga owners are looking for is “a little low, (and it remains to be seen) whether they can get it.”

Noting that plate owners in Quebec have been awarded compensation of up to $46,500 each, he stands behind the Toronto class action, in principle.

“I do support it,” he says. “I just don’t know how long it’s going to take -- how far it’s going to go.”

Of the Mississauga owners’ $50,000 request, Taxi Action president Behrouz Khamseh offers, “Everybody is entitled to their opinion. But if the plate value was $200,000, why don’t you pitch for the real amount and see what happens.”

“Just the value of the stress is worth (that $1.7 billion),” muses the co-plaintiff in the Toronto class action. “The thing is, this was a regulated industry (unlike PTC’s who, basically, self-regulate). We were not able to decide anything. You had to dance to their song all the time.

“And, there’s strong evidence the City did say, ‘This is your retirement package.’”

Similarly, ex-Hamilton owner/operator Hans Weinhold feels it would be wrong to go after anything other than the pre-Uber value of the plate.

“You should ask as much as you can, including the pain and suffering,” he says. “But I don’t think their chances are very good. This ain’t a battle with fair play. The old saying, you can’t fight city hall.”

“It has (taken its’ toll) beyond money,” he continues. “In 2015, when they first came in I was in a state. It’s not a great feeling. It can have a physical impact, related to people having heart attacks, and committing suicide (as has happened in Dublin and New York).”

After four decades behind the wheel, Weinhold retired last year at age 64, saying, “I had my fill.”

He sold his plate for a quarter of the pre-Uber value, but adds, “It’s a huge weight off my shoulders.”

Weinhold can understand some Toronto owners holding off on the requested $500 commitment to the class action.

“If I were in Toronto, I’d be tempted to say, ‘I don’t want to put another penny into this business,”’ he offers.

But Manley suggests these owners should face the harsh realities, and that the $500 would be money well-spent, given the dire circumstances and how much they have already lost.

“There’s never going to be a political, or bureaucratic resolution to these issues,” he comments. “And in two years, the plate will have no value whatsoever.”

Should they receive a sizable award from the courts, Pellier suggests the Toronto owners might consider setting aside a portion for those full-time drivers who can verify their status via tax returns, “given the fact that, without the drivers where would most owners be?”

While “always an advocate that owners, and drivers must co-exist”, Reti emphasizes that the directors of ATOOL have done “all the work” in putting the class action suit together, without the financial support of many owners, and the drivers.

“Until we came along, nobody lifted a finger,” he says. “To be realistic, we are doing the yeomen’s work….Isn’t there a drivers’ union that can take the City to court on its own?

“This is so typical of the taxi business participants. Let’s divide the money we don’t even have yet. There’s no guarantee we get it.”

Further to the point, he notes it’s the owners who are losing their retirement fund.

“I put in my time, my talents, my resources, and my money, and everybody wants to have a free lunch on my expense. So, ‘No,’” he says to sharing any possible proceeds.

A former director of the iTaxiworkers Association (which merged with ATOOL in January), Mohammad “Reza” Hosseinioun says there are “a lot of questions” surrounding drivers, maintaining they’ve been hurt “big time” by the proliferation of PTC’s.

“Every day, the drivers go home (with virtually nothing) in their pockets,” he says.

“I think the drivers, they don’t bother to stand and fight for themselves. They’re very passive, they just work and go home. The challenge here is, there’s nobody in this city to provide direction in this fight. We have the power, but we are not together.”

Manley notes putting something aside for drivers would just complicate the issue.

“Firstly, what about the owners (like me) who never had drivers?” he asks. “Am I supposed to pay for that?”

“I think it’s too difficult of a thing to do, and the driver’s case needs to be done on its’ owner merits. I don’t think it will be (though). Will they unite enough (to put a case together)?”

He agrees it was the owners who put the “vested interest” in the business, and were promised their plate could be used as a pension plan.

“Did the City guarantee anything (to owners)?. I think in his case, yes they did – in the bylaw,” he continues.

“This is much different than any other business they license (because of all the rules and regulations the taxi industry has adhered to.) They made a guarantee there wouldn’t be too many cars (on the road). They made these guarantees, now they’ve back out of them completely. That is why we’re entitled to compensation.”

Reti cites three cornerstones to the ATOOL case: the City issuing plates for many years without a proper issuing formula; the fact there is no clear understanding of who owns the Toronto plate; and the loss of value of the plate, which equates to loss of income for owners.

“So, we are out of the starting gate, and the City has a lot of explaining to do,” he observes.


© 2019 Taxi News



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