Lawyera
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September 2019

Saskatoon taxi interests join surge of legal action against regulators

by Mike Beggs

Saskatoon is the latest Canadian city to be served with a class action suit, brought against it by taxi brokers and owners in late July. They allege the City’s new bylaw unfairly favours Transportation Network Companies (TNC’s) and is having, “catastrophic effects on the cab business.”

And, they allege the 30 cents per trip fee on each TNC run amounts to an “unconstitutional tax”, creating a gravy train for the municipality at the cab owners’ expense.

“Taxi owners did everything required of them – paid every fee to license their cars, and every cost to refurbish their vehicles and recruit and train only well-qualified drivers who pass City-verified criminal record checks,” said Scott Suppes, director and officer of the plaintiffs in a press release. “Under the new TNC Bylaw, Saskatoon has given Uber a free ride –TNC’s don’t have to pay the costs and fees that the City imposes on taxis. TNC’s can surge price fares during peak periods, and at other times undercut the fares the City requires taxis to charge.”

Owners are seeking damages for the value of their licenses, along with revenues lost to TNC’s and their drivers.

And like owners in Ottawa (who have an outstanding class action) they allege, “the bylaw discriminates against the majority of cab drivers, whose race, first language, ethnic or national origin, and religion are different from other Canadians in general, and Saskatoon people in particular.”

“The 2018 (ridesharing) bylaw imposes a disproportionate burden on these minority groups that widens the gap between (them) and the rest of Saskatoon,” the Statement of Claim reads. “The requirement that Uber only accept passengers who pay through an electronic payment system, linked to their bank accounts and credit cards, resulted in the churn of affluent Canadian passengers from taxis to Uber.”

On July 19, interim City solicitor Cindy Yelland acknowledged the class action, but offered no comment. The City was required to respond to the Statement of Claim within 20 to 30 days.

Licensed Ubers hit the road in Saskatoon on February 5. Lyft has also expressed interest in operating there, but has not announced a launch date.

Suppes is seeking, “a money judgement for compensatory and symbolic damages and restitution”, and he wants the TNC bylaw declared “invalid”.

The owner of S-I Management Ltd., a holding company with 16 Saskatoon cab licenses, alleged that by capping the number of taxi licenses at 165, the City encouraged the growth in value of their licenses to an estimated total value of $40 million.

“Saskatoon granted licenses for decades, and fostered a multi-million dollar taxi industry that grew in reliance on that system,” the Statement of Claim reads. “Taxi licenses were “bought, sold and financed like homes, and the City profited from the fees on the sale, lease or transfer of these plates which recently were selling for $260,000, and now have little or no value.”

According to a Saskatchewan Government Insurance spokesman, there are 478 ridesharing drivers in Saskatoon and 22 more in the surrounding areas.

Union leader Daniel Amoah said ridesharing has had a “big time” impact on the city’s cab drivers, particularly on nights and weekends.

To CBC, taxi industry members complained that TNC’s don’t have to maintain an office in Saskatoon, aren’t legally required to be wheelchair accessible, and don’t bear the same regulatory costs -- allowing them to easily attract drivers, by offering more competitive wages.

Spokesman for the Mississauga plate owners’ recently announced law suit, Peter Pellier is encouraged by the fact that the Saskatoon taxi industry is claiming the per trip fee levied against Uber is an “unconstitutional tax” that enriched the City at the expense of the taxi owners.

“That this action has been brought forward in another provincial jurisdiction could well prove helpful to those of us in Ontario,” he says.

On hearing news of the Saskatoon class action,” Lawrence Eisenberg, a plaintiff in the Toronto class action says, “It’s encouraging. (But) every jurisdiction is slightly different – and that includes Mississauga.

“(But) all of Canada has had trouble with Uber.”

That may also prove to be the case in Vancouver, where the B.C. Passenger Transportation Board (PTB) has finally laid out specifications for how ridesharing companies will operate. They will be eligible to file applications on September 3.

The NDP government had previously taken a hard line on TNC’s seeking access to this market. But – no doubt caving to the monumental pressure of Uber lobbying – on August 19, the PTB announced that there will be no limit placed on the number of TNC drivers, nor on surge pricing, and that they will face fewer boundaries than taxis. However, TNC drivers will be required to obtain a Class 4 Commercial license.

Vancouver Taxi Association president Carolyn Bauer told Global News her group was “stunned” by the rules spelled out for TNC’s.

“We were hoping for a level playing field, and we got annihilated,” she said.

B.C. Taxi Association president Mohan Kang told The Vancouver Sun the association is “very concerned” that, without a cap the market will be flooded, as in Toronto and countless other big cities around the world.

While they can surge price, TNC’s won’t be allowed to charge any less than existing taxi-flag rates, which stand between $3.25 and $3.95.

“There will be dynamic pricing,” PTB board chair Catharine Read explained. “But there will be a floor on the taxi flag rate.”

And while in most North American cities TNC drivers carry an (easier to obtain) Class 5 license, the B.C. Ministry of Transportation and Infrastructure stood firm on its requirement of a Class 4 license (as in Alberta), maintaining that it enhances safety.

Lyft Canada managing director Aaron Zifkin told The Georgia Straight his company does not operate in any other jurisdiction requiring a Class 4 license. And Lyft and Uber have repeatedly argued that this commercial license requirement has proven unnecessary in other cities, and will negatively impact the driver pool.

TNC drivers must also undergo criminal and driver record checks, banning drivers with four or more convictions within two years.

“Our plan has made it possible for ride-hailing companies to apply to enter the market this fall, with vehicles on the road later his year, while ensuring the safety of passengers and promising accessible operations in the industry,” Transportation Minister Claire Trevena stated.

“British Columbians have been asking and waiting for these services, after more than five years of delay by the former government. We took action to allow for the services people want, and we’re delivering on that promise.”

Prior to the announcement, Pellier rightly predicted that Trevena was “living in a dream world if she believed Uber would submit to limits on the number of affiliated operators.”

Trevena said the Province is still worried about the effects ridesharing will have on the existing cab industry.

“We have tons of people who are working hard, who have a lot of money invested in the taxi licenses. This is their income. We have lots of drivers of taxis who are working as taxi drivers. We want to make sure they continue working,” she told Global News. “But we also want to know people have the choice that they have so clearly said they want.”

To Global News, Kang stressed, “People in the taxi industry have worked very hard to be good community citizens… and they have also served the general public well over the years.”

“I think the government has to know that it is not one (city) where we serve. In some of the small places in the province, the taxi industry has become an essential service.”

Open access and surge pricing aside, long-time Toronto owner Bob Boyd commended B.C.’s NDP government for better standing up to PTC lobbying than municipalities in the Greater Toronto Area, over the course of five years.

“Don’t forget it’s provincial out there. It’s not (regulated by) the city,” he says. “That’s where they’ve got it over us.

“The (Class 4 driver’s license stipulation), that scares the hell out of Uber and Lyft. They don’t want that.”

 

© 2019 Taxi News

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