Uber files lawsuit against City of London over increasing per-trip fees

Uber Canada is taking the City of London to court over the fees the municipality charges for every ride, saying the fees place an "unfair and inequitable financial burden" on them, and lead to higher prices for riders.

The ride-hailing giant is seeking an order before Ontario's Superior Court of Justice to quash sections of a city bylaw that establishes the per-trip fees, court documents show.

Specific reference is made to two council-approved bylaw amendments which raised the fee to $0.45 for 2024, and $0.50 for 2025.

The municipality charges Uber and other transportation network companies (TNC) a fee for every trip, in addition to an annual fee that varies depending on a TNC's vehicle count.

In a notice of application, filed on Nov. 28 in Toronto, Uber Canada Inc. and Uber Raiser Canada Inc. argue the per-trip fee "has the substance and nature of a tax" and is "beyond the powers of the city as imposing a tax."

Uber says the per-trip fee has risen from $0.11 in 2017, when it began legal operations in London, to $0.25 in 2018, $0.35 in 2023, and $0.45 in 2024. An updated fees and charges bylaw, passed by council in October, will see it increased to $0.50 on Jan. 1, 2025.

In its filing, Uber argues it wasn't notified in advance or provided rationale for the increases, and that fees for other licence categories have remained largely unchanged.

A report by city staff, tabled before council in October, suggests the fee will rise to $0.60 as of 2027, and Uber's $50,000 annual fee, levied against TNCs with over 1,000 vehicles, will rise to $51,000.

Although the Municipal Act authorizes London to charge fees on a cost-recovery basis for business licensing, Uber argues they exceed the city's associated TNC licensing and municipal compliance costs.

The application has not been tested in court. The city had not made a filing in the case as of last week. A city spokesperson declined to comment on the matter as it is before court. 

It's not clear how the city decides what to charge TNCs in per-trip and annual fees, or how it decides the fee increases. No one from the city was available for an interview.

In a statement, Keerthana Rang, an Uber Canada spokesperson, claimed London's ride-hailing fees are the highest in Ontario. 

"Increases to per-trip fees only mean higher prices for riders, which results in lower demand and less earning opportunities for drivers in London," she said. "We are hopeful that this can be resolved with the city, but we needed to file with the courts by November 28, 2024."

The city doesn't regulate the fees and fares ride-hailing services charge riders like it does for taxis. Taxi operators must submit a schedule of fares to the city for approval, along with per-kilometre rates, and must charge riders a minimum fare of $3.50.

Ride-hailing services in Hamilton pay a per-trip fee of $0.33, along with an annual fee of around $5,600. Previously, personal transportation providers, as they're known in the city, paid a per-trip fee of $0.06, but faced an annual fee of roughly $71,700 if they had over 100 vehicles.

When Hamilton city staff proposed doing away with the previous fee structure in 2020, Uber submitted a memo to council in support of the move.

In Windsor, TNCs are charged a per-trip fee of $0.11, and those with more than 1,000 vehicles pay an annual fee of $30,000. 

In Toronto, ride-hailing companies, known as private transportation companies, pay an application fee of roughly $22,500, and a per-trip fee of $0.34. They must also pay $16.94 annually for each driver, and a $7.99 accessibility fund program fee with every application or renewal.

Toronto has proposed limiting the number of PTC licences it hands out. As of Dec. 1, 80,429 Uber and Lyft drivers were operating in the city, and staff recommended setting that as the cap.