City of Toronto Seeks to Shut Down Uber Services

Uber Technologies Inc (Uber) is a California-based company offering a ridesharing service that connects riders and drivers through a smartphone application. In mid-November, the City of Toronto filed a notice of application with the Superior Court of Justice in Ontario seeking an injunction against Canadian affiliate Uber Canada Inc and related companies. An injunction order would prevent Uber from offering its ridesharing service within the city limits of Toronto. Uber and other ridesharing service providers are facing similar challenges in other major North American cities. The City of Toronto has taken the position that Uber is operating without a brokerage license for its taxi- and limousine-hailing apps. This would put Uber in violation of Toronto city by-laws governing taxi and limousine services providers. On the other hand, Uber argues that they are a technology company, not a taxi service, and should not be subject to city by-laws regulating taxi services. Apparently siding with Uber, new Toronto mayor John Tory said in a statement last week:

I think that regulators, whether it be taxis or other industries, have to take into account in doing their job that the world is changing and it’s changing for the better, and that regulations have to be modernized.

In a commentary posted to its website (November 24, 2014), the Competition Bureau was also critical of the rote application of regulations and licensing requirements to innovative new software applications and business models not previously envisioned:

The Bureau understands that innovation can be disruptive to existing industries. Recent examples include the real estate and banking industries. However, in order to be successful, not only must the innovators have courage, vision, drive and patience, but markets must be receptive to those efforts.

It will be interesting to see how the Ontario courts interpret Uber’s service model. The fight in Toronto is just one of many faced by Uber, which has been facing mounting legal impediments in many jurisdictions. For news reports about the injunction sought by the City of Toronto against Uber, see below: Financial Post The Globe and Mail Global Toronto The Toronto Star Summary by: Michael House