Quebec taxi operators launch $1.5 billion legal actions in wake of Province’s latest move to deregulate industry
by Mike Beggs
In answer to the passing of the controversial Bill 17 – which legalizes Uber, and will deregulate the taxi industry -- Quebec’s 22,000 cab drivers and operators have filed three separate class action suits against the Province and Uber seeking $1.5 billion in compensation.
The suits were filed just days after Transport Minister Francois Bonnardel pushed through this legislation on October 10. Faced with heavy opposition from the cab industry for months, Bonnardel had threatened to invoke closure, to force the National Assembly to sit all night to pass this Bill. But a last-minute deal was struck -- two days before Uber’s pilot project ended, and it would have become illegal in Quebec.
Under Bill 17, the Province would provide approximately $800 million in compensation to taxi permit holders. But cab industry leaders say that’s not near enough, and have deemed these so-called taxi reforms, “an act of war”.
Their lawyers are requesting the courts make two determinations: that the provincial government and Uber are responsible for the heavy losses suffered by the cab industry; and that Bill 17 is a form of expropriation, and how much it would be valued at.
“It’s complete deregulation,” alleges Champlain Taxi president George Boussios, representing an association of Montreal cab companies. “Actually, it’s the elimination of the taxi industry in Quebec. It’s an expropriation of our permits at purchase price, not the market price when Uber entered the market.”
The Province already awarded compensation of $250 million in 2018 (up to $46,700 earlier for each permit holder), and then raised the amount to $500 million in March (prompting a legal action). But Boussios says the $800 million figure still falls well short of the $186,000 market value of permits when Uber came in, and the losses in revenues sustained since then.
“In 2014, the taxi industry was valued at $1.3 billion. He’s giving us $800 million. We’re saying you still owe us $500 million,” he continues.
“All of the older taxi drivers and owners were hoping this would be their retirement, and they got $46,700.”
A co-plaintiff in the Toronto owners’ $1.7-billion-plus class action against their City, Lucky Taxi owner Lawrence Eisenberg agrees, “It’s not enough.”
“It’s never enough when the permit value is nowhere near what it should have been, and you’re losing money on a day-to-day basis. How can you ever recoup?” he comments.
“If there’s 90,000 Ubers (in Montreal, like in Toronto), then what’s going to happen to the downtown, and with all those non-professionals in this business? The City of Toronto has opened up a can of worms they will never be able to close.”
Long-time Toronto owner/operator Gerry Manley suggests the Quebec class actions, “at the very least will give the (Ontario Superior Court) a bit of a barometer on what to award our members in our civil causes.”
“It’s very legitimate, what they’re asking for,” he says. “It’s just simple. You let them in, you don’t regulate them, while (taxi operators) have worked under every regulation.”
But while commending his Quebec counterparts for their swift, aggressive actions, Manley estimates that $800 million would represent two-thirds of the market value of their plates.
“Although it does not compensate them for any loss of wages, if the City writes me a cheque for (that amount), I’ll accept that and walk away, leaving the eventual chaos to fall right in the lap of those who caused it,” he adds.
Quebec Premier Francois Legault told the Montreal Gazette the Province is doing its’ best to help cab drivers, through compensation and being able to charge variable fares based on demand.
In March, he emphasized that the value of taxi permits has fluctuated over the years.
“I understand that at one point they reached $200,000, but that’s the law of supply and demand. When we’re in business, we take risks,” he said to the Gazette.
The Quebec government plans to raise taxi and Uber fares by 90 cents for the next five or six years, to reimburse the cabbies. But the taxi industry alleges the new Bill passes the cost of deregulating the industry on to passengers and taxpayers.
And they say this strategy will only improve the industry’s, “death benefits”.
“The Minister’s proposal is that we will have better funerals, but he will still kill the taxi industry to please Uber,” Abdallah Homsy, a spokesmen for Quebec City taxi drivers told CBC.
And in the Canadian Press, Quebec Solidaire’s Andres Fontecilla alleged the government is making assimilation tougher for immigrant families, when it should be helping them.
“Taxis in Quebec are driven principally by immigrants,” he said. “The Premier keeps saying that we should be taking fewer, but better care of immigrants. Plunging families into uncertainty, is that how you take care of people?”
Under deregulation, Boussios fears a flood of new ridesharing drivers will supersaturate the market.
“There needs to be a quota,” he told CBC Montreal’s Daybreak. “Yes, the consumer is one part of it. What about the people who need to make a living? There is more to this than getting a taxi, or an Uber in three minutes instead of five minute. They’ve destroyed 22,000 families.”
His own fleet numbers have fallen off from 450 to 325 cars.
“We can’t find drivers to rent their cars. So, they’re parking their cars,” he adds.
Gaetan Barrette, transportation critic for the Liberal party suggests when Uber enters a market salaries and wages always go down.
“I strongly feel that, at the end of this process we will have a high number of drivers earning less than minimum wage, and this is something we should not be happy about,” he told CBC.
Bill 17 states that all taxi, or ridesharing drivers would be required to meet the same professional standard. That means all drivers will require: a Class 5 license, more than the 4C mandated at the moment; a minimum amount of training and to pass an exam; and submit to a police background check. Operating areas reserved for certain cabs, the “T” license plate used on taxis, and annual inspections will all be eliminated.
But that promised “level playing field” between taxis and PTC’s has failed to materialize in Toronto, and major cities around the world, given Uber and Lyft’s guerilla lobbying efforts.
“I was in the meetings with (the Minister) and asked him, “Who’s rules (will it be) ours’ or theirs’? He doesn’t answer that,” Boussios alleges.
“It’s going to take one year for us to deregulate. In the meantime, Uber and Lyft have carte blanche to do whatever they want, yet we are stuck in the same rut. Now we’re in limbo. We don’t know what to do.”
The City of Montreal previously chose to deregulate the cab business during the mid-‘70’s, and it proved disastrous – as it has in several other cities (like Dublin in the early 2000’s). The fallout included taxi drivers working marathon hours, losing their houses, and even taking their lives, along with heightened crime and safety issues.
“(In the end), the owners invested and bought back the permits from the government, to establish the amount of taxis in Montreal. That’s where the value of the permits started going upwards,” Boussios relates.
“We invested in the taxi industry. We followed the rules and regulations. And overnight they say they’re going to eliminate it.”
He acknowledges it could take years for the courts to rule on the class actions, and that for many permit holders, “the damage has already been done.”
“A lot of the guys don’t have that time. They don’t have the money, and have been in the business 30 years,” he says.
“It’s really bad. The way they’ve treated us is unfair. A driver last winter tried to commit suicide.”