Taxi industry lawyers pitch fee-per-ride to cover potential legal settlement

The legal team representing taxi plate holders in Ottawa is proposing the city pay for a potential settlement of its Uber suit by passing on the cost to ride-hailing customers. 

An Ontario Supreme Court judge ruled in favour of the taxi industry last month, writing that while fees levied by the city through its taxi bylaw do not constitute an unlawful tax, the city was negligent in enforcing the rules in the first years after Uber "bullied its way into the Ottawa market." 

But there's still no decision on how the plaintiffs should be compensated. 

• Court rules city negligent in how it enforced taxi bylaws when Uber arrived
• Did the city fail the taxi industry when Uber arrived? Judge will finally decide

When the class action was launched in 2016, the $215 million it claimed was the largest ever leveraged against the city, though it was later surpassed by Rideau Transit Group's $225-million counterclaim over the LRT delay.

Justice Marc Smith ended his judgment by encouraging the two sides to discuss it and come back with a decision as to whether a trial to decide the form of the damages will be necessary. 

No settlement talks yet 

Now, nearly a month later, Thomas Conway with Conway Litigation told CBC the city's Gowling WLG (Canada) LLP legal team has not yet begun discussions on whether to settle or go back to court. 

The trial would decide whether damages should be awarded in the "aggregate," or based on the individual circumstances of plate holders.   

The city sells a limited number of taxi plates to drivers or brokers for a nominal fee, but does not regulate the secondary market, which has seen plates resold for upwards of $300,000. 

During the past decade, city hall has heard how drivers can save up for years to purchase one. 

The representative plaintiffs in the class action, Metro Taxi Ltd. and plate owners Marc André Way and Iskhak Mail, argued the entrance of Uber upended the market. 

Calculating that damage as an aggregate would involve assessing how much average value was lost. The alternative would be to create a process for evaluating the losses suffered by each individual plate holder.

Conway sent a letter to the city's legal team last week inviting them to sit down, perhaps with a mediator, to "see if we can work something out," but said he hasn't yet received a response. 

Charge per ride suggested

The letter suggested a possible way for the city to pay for a settlement, which Conway argues would take the pressure off of taxpayers and place it instead on those who enjoy these services.

"In order to make this work, one way of doing it would be to levy a relatively small fee per ride, whether that's an Uber ride or a cab ride," Conway explained. "That would be used to fund a pool of money that would compensate the plaintiff class."

It's not an idea without precedent in Canada, but it's unclear if it's legal in Ontario. 

In Quebec, where regulating the taxi industry is a provincial responsibility, a 90-cent fee was temporarily imposed to pay compensation for abolishing its licence regime. A class-action trial began there earlier this year. 

When consultant KPMG suggested a 30-cent accessibility fee for vehicle-sharing apps back in 2015, the city said Ontario's laws would not allow it. 

Eventually, Uber voluntarily agreed to a much smaller fee of seven cents per ride. 

A decision for a new council

Conway said his team had floated this payment scheme before last year's trial began and found it "wasn't well-received." 

But he said circumstances have changed. 

"As the old saw goes, there's a new sheriff in town, there's a new council," Conway said. "This isn't a problem that the new council or the new mayor created.

"There may be some appetite to explore how this could be resolved without burdening or overburdening the the ratepayers of Ottawa," he added.

Stuart Huxley, Ottawa's solicitor, told CBC the city cannot provide comment on matters before the courts, adding that once the court addresses whether aggregate damages are appropriate the city will have 30 days to file an appeal.