ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Abdullah Abdullah, Nawaf Elenezi, Asfaw Mekonen, Timothy Omotunde, Vikash Kumar, Botros Nakhle, Said Youssef Roukoz, Dawit Tegegne, Fezel Popal, Walid N. Salika, Taminderpal Singh Mokha, Georges Chamoun, Meshari Amir, Amrik Singh, Mohamud Mohamed Hassa, Michel Tarabie, Tanios Abou-Hamd, Muhammad Saood Khalid, Rafael Kamar, Ahmed Khandid, Hayder Abid Zeyd, Elias Karam, Getachew Ayele, Farid Haddad, Fadla Hamade, Ghassan Skaf, Unifor and Unifor Local 1688
Plaintiffs
– and –
Ahmad Hashim Maziri, Abrham Wossenu Zewde, Steven Albert Maurice Anthony Leger, Colleen Marese Pemberton Nnaemeka, mazen Sabbagh, Georges Abou-Eid, Alireza Najaf Zadeh, Osamwonyi Abiokunla Owie, Sainthia Bisengimana, Christopher Amiana, Reynold Pierre-Louise, Mohammad Kazem Tohidi Shabestari, Genet Negash Bayable, Stella Riesom, Teklezghi Ghebremedhin Yohannes, Abdullahi Jam Ali, Mohamed Hamdan, Aya Hamed, Yassin A. Mouhoumed, Apollos Gustanar, Jane Doe and John Doe
Defendants
Sean McGee and Alison McEwen, for the Plaintiffs
Brian C. Elkin and Paul D. Mooney, for the Defendants
HEARD: February 29, 2016
REASONS FOR Uber Injunction
R. Smth j.
Overview
1A number of licensed Ottawa taxicab drivers (the “taxicab drivers”) and their union, Unifor and Unifor Local 1688 (the “Union”) seek an injunction against 13 of the 20 named defendants plus John and Jane Doe, who are drivers for Uber (the “Uber drivers”).
2The taxicab drivers and their Union seek to enforce the City of Ottawa’s By-Law (the “By-Law”) licensing and governing taxicabs. Pursuant to s. 440 of the Municipal Act, 2001, S.O. 2001, c. 25 any contravention of a municipal by-law may be restrained at the instance of a tax payer or the municipality. The City of Ottawa is not seeking injunctive relief to enforce its taxi licensing By-Law. In this case, one of the plaintiff taxicab drivers has provided evidence that he is a tax payer.
3The taxicab drivers and their Union do not bring their claim for an injunction only to restrain the alleged contravention of the taxicab licensing By-Law, but also to prevent further economic damage being caused to them by the Uber drivers’ alleged unlawful operation of taxicabs in the City.
4The Uber drivers submit that neither the Union nor the taxicab drivers will suffer irreparable harm if an injunction is not granted and also that the Court should allow the City to decide the policy it wishes to implement to address the new circumstances presented by Uber ride sharing services. A study on the options to deal with Uber is to be presented to the City on March 23, 2016 and the Uber drives submit the Court should not proceed to grant an injunction without this key evidence and the City should be allowed to regulate Uber’s ride sharing services.
5The Uber drivers submit that the following issues should be answered in the negative:
(a) Does the taxicab drivers’ Union or do the taxicab drivers have standing to bring the application for an injunction against the Uber drivers?
(b) Is there a serious issue to be tried? Namely are the Uber drivers operating a “taxicab” as defined in the By-Law; and do the claims for economic torts against the Uber drivers raise a serious issue to be tried?
(c) Will the taxicab drivers or the Union suffer irreparable harm if an injunction is not granted? and
(d) Does the balance of convenience favour granting an injunction?
Factual Background
How Uber is structured
(1) The business known as Uber revolves around two related software applications for use on smartphones and other internet-enabled devices (the “Apps”). The Apps provide a digital platform that enables passengers (“Riders”) to request ridesharing services from independent third-party Driver Partners.
(2) Uber uses two Apps: Riders use the Rider App to request rides, to track rides on a map on their smartphones, to facilitate immediate electronic payment for their rides, and to anonymously rate Driver Partners; Driver Partners use the Driver App to receive and respond to ride requests and to rate their Riders at the conclusion of each trip.
(3) Riders must satisfy certain requirements before they gain access to the Rider App. They must be at least 18 years old. The Rider must agree to user terms with Uber B.V., a Dutch entity. The terms set out the Rider’s rights and obligations, including a limited licence from Uber B.V. to use the Rider App. The Rider must provide Uber B.V. with their name, phone number and email address. The Rider must also enter credit card payment information, which is securely stored by a third party. The Rider also requires an internet-enabled device.
(4) A Driver Partner can only access the Driver App after satisfying several safety and security measures. Specifically, Driver Partners must:
(a) Be 21 years of age or older;
(b) Possess a valid driver’s licence;
(c) Provide proof of vehicle registration, vehicle insurance and eligibility to work in Canada;
(d) Pass background criminal and driver’s abstract checks conducted by third-party screening companies; and
(e) Have and pass a safety inspection of their vehicle.
(5) If the requirements are satisfied, Driver Partners may conclude agreements with Rasier Operations B.V. (“Rasier”), another Dutch entity affiliated with Uber B.V., setting out the Driver Partners’ rights and obligations when using the Driver App.
(6) A Driver Partner must keep their documents on file current; if they expire, the Driver Partner is automatically deactivated and unable to access the Driver App. The criminal background check is repeated annually. A single conviction at any point in time will result in disqualification as a Driver Partner. A valid safety inspection of the Driver Partner’s vehicle is also required on an annual basis.
(7) The Apps are used to request rides as follows:
(a) A Rider opens the Rider App on his or her smartphone, enters the pickup location address, and presses a button in the Rider App to request a ride.
(b) The Rider App sends the trip request to data servers in California. The request is then automatically sent from the servers to the Driver Partner nearest to the pickup location.
(c) The Driver Partner has 15 seconds to accept the request in the Driver App. If the Driver Partner does not accept, the request is automatically sent to the next closest Driver Partner.
(d) Once the pickup request is accepted, the Rider App displays the Driver Partner’s name and headshot, the vehicle’s licence plate number, the make and model of the vehicle and the Driver Partner’s overall “rating” (discussed below).
(e) The Rider can cancel the pickup at this time (without charge if within 5 minutes).
(f) The Rider is notified through the Rider App when the Driver Partner has arrived. The Rider can identify the vehicle by the licence plate number, and verify the identity of the Driver Partner against his or her photo, all as displayed on the Rider App.
(g) The trip begins when the Rider enters the vehicle and the Driver Partner presses a button in the Driver App. The Driver Partner then proceeds toward the requested destination.
(h) After the vehicle arrives at the requested destination, the Driver Partner taps the Driver App to indicate that the trip has concluded.
(i) After the ride, the Driver Partner and the Rider are asked to rate each other anonymously out of 5 stars; electronic payment is completed and the Rider is emailed a detailed receipt.
(j) Members of the public who have not agreed to Uber BV’s Terms and Conditions, or who lack a sufficient internet-enabled device, cannot request a ride through the Rider App. No one can “street hail” a Driver Partner as one would a taxi. No one can approach a Driver Partner at a stand or telephone a dispatcher.
(k) The Rider App can be used in any of the cities around the world where Driver Partners operate.
6Neither Uber B.V. nor Rasier are named as defendants to the plaintiffs’ claim for damages or their motion for an injunction.
City of Ottawa’s Taxi By-Law
7Under the Taxi By-law, the City has enacted a vehicle-for-hire licensing regime that prohibits anyone from operating a vehicle as a taxi without, among other things:
(a) A valid taxi plate licence, accessible taxi plate licence, or limousine plate licence;
(b) A current taxicab driver licence;
(c) A current valid Province of Ontario motor vehicle permit issued for that motor vehicle;
(d) A valid inspection certificate;
(e) A taximeter in operation;
(f) A security camera installed in accordance with the Taxi By-law;
(g) A roof sign; and
(h) A certificate of insurance confirming that the taxi plate holder has obtained insurance coverage in accordance with the Taxi By-law.
8In accordance with this authority to license businesses and its authority to enact by laws for the purposes of consumer protection, the economic and environmental well-being of the City, and the health, safety and well-being of people, Ottawa’s licensing regime requires that among other things:
(a) Taxi drivers complete a training course;
(b) vehicles used as taxis pass mechanical inspections and be equipped with certain safety equipment;
(c) taxi owners and operators have comprehensive commercial insurance policies in place for the transportation of passengers for compensation; and
(d) the fares or rates charged for Taxi rides are in accordance with a fee schedule established by the City.
9In or around October 2014, the defendants commenced operations as Uber drivers in the City of Ottawa. Uber sets the fee for the transportation, collects that fee from the passenger, and then provides money to the driver. That fee charged can be and has been lower than or higher than the rate allowed under the Taxi By-law.
10Users request a vehicle using the Uber app and can only pay the fare to Uber by credit card. They cannot pay by cash or present a debit or credit card to the driver.
11The plaintiffs allege that the Uber Drivers do not comply with the following provisions of the Taxi By law:
(a) They do not have a taxicab driver licence nor a taxicab plate licence;
(b) They have not completed the City’s Taxicab Driver Education program;
(c) They are not required to obtain $2,000,000 of Commercial General Liability and Motor Vehicle Liability insurance with the City named as an additional insurer;
(d) They do not charge a fee calculated in accordance with the current tariff rate set by the City and do not use a sealed taxi meter;
(e) They do not display a taxicab driver identification card or have a roof sign on their vehicle.
(f) They do not obtain a valid vehicle inspection certificate;
(g) They do not have a fully functioning camera system.
City of Ottawa Actions
12The Uber ridesharing App has been operational in Ottawa since October of 2014. Uber-like ridesharing companies have also been referred to as Transportation Network Companies (“TNCs”).
13Since March of 2015, the City has been engaged in a review of its options with regards to regulating TNCs such as the Uber ridesharing service. The City has retained KPMG to provide it with a report on its options, which include establishing a licensing category for the Uber ridesharing model. Recommendations from that report will be presented to City Council in the very near future for their consideration.
Alleged Delay
14Notwithstanding that the Uber App ridesharing program has been operating in Ottawa since October of 2014, the plaintiffs’ only issued their Statement of Claim on January 15, 2016 and issued their Notice of Motion seeking an injunction on January 18, 2016.
Number of Drivers
15There are approximately 2600 licensed taxicab drivers in Ottawa and 1186 licensed taxicabs of which 187 are accessible. Uber estimates that there are approximately 1,000 Uber drivers in the Ottawa-Gatineau area, some of whom reside in the province of Quebec.
16The plaintiffs have alleged that the Uber drivers are reducing the number of fares available to licensed taxicab drivers. Two individual taxicab drivers filed affidavits alleging that their revenue fell by at least 33 percent and 40 percent respectively following the introduction of Uber ridesharing program in Ottawa. However, these allegations are not supported by any financial records or any expert report providing an analysis of ridership in the taxi industry in Ottawa before and after the arrival of Uber.
17The Respondents have filed a copy of a report containing an analysis of the effect of Uber-like transportation services in Mississauga, a city of 900,000 people. Uber commenced operating in Mississauga in the summer of 2012. The Mississauga study indicated that in 2014, the total dispatched trips for the eight taxi brokerages increased by 8.9 percent compared to 2013 even though the passenger total number of rides taken increased by a greater amount. In 2015, the total dispatched trips for the eight taxi brokerages decreased by 1.9 percent in comparison to 2014. The report indicates that the Uber ridesharing program has increased the pie.
Analysis
ISSUE #1 - Do the taxicab drivers or their Union have standing to bring an application for an injunction against the Uber drivers?
18Section 440 of the Municipal Act reads as follows:
Power to Restrain
- If any by-law of a municipality or by-law of a local board of a municipality under this or any other Act is contravened, in addition to any other remedy and to any penalty imposed by the by-law, the contravention may be restrained by application at the instance of a taxpayer or the municipality or local board. 2006, c. 32, Sched. A, s. 184.
19The Uber drivers submit that the taxicab drivers’ Union does not have standing to enforce the City’s By-law by way of injunction because it is not a tax payer. In Grey-Bruce Snowmobile Trails Inc. v. Morris Estate (1997), 1997 CanLII 1591 (ON CA), 35 O.R. (3d) 398 (C.A.), the Court of Appeal held that an individual who was not a ratepayer did not have standing to enforce a municipal By-law by an injunction. The Court of Appeal stated as follows: “the appellant is not a ratepayer and accordingly does not have standing to bring this action to restrain the defendants from violating By-law 1268”. Based on the Gray-Bruce decision, I find the taxicab drivers’ Union does not have standing to enforce the Taxi By-law by injunction.
20The Union is an unincorporated association of individuals that does not own property and therefore does not have standing to enforce the By-law. Whether the Union has standing to sue for economic losses due to a possible future reduction in membership due to the activities of the Uber drivers does not need to be decided as one taxicab driver is a ratepayer. The issue was left undecided when the Ontario Court of Appeal overturned Pelletier J.’s decision in Canadian Union of Postal Workers v. Quebecor Media, 2016 ONCA 206, at para. 17.
21The plaintiffs have provided evidence that one of the taxicab drivers is a tax payer and, therefore, I find that he has standing to bring the motion for an injunction under s. 440 of the Municipal Act.
22The taxicab drivers and their Union have also made claims for economic damages caused by the alleged unlawful conduct of the Uber drivers breaching the City’s Taxi By-law. They seek an injunction at common law to prevent further damages being caused to them. The issue of whether the Uber drivers’ actions are unlawful will depend on whether the City’s definition of “taxicab” in their licensing By-law applies to them.
23In the City of Toronto v. Uber Canada Inc., 2015 ONSC 3572, 126 O.R. (3d) 401, at para 14, Dunphy J. concluded that “the City has failed to demonstrate a breach by the respondents of its By-law”. He dismissed the City’s application for an injunction against Uber Canada Inc. The City of Toronto By-law defined a Limousine, Taxicab and a Limousine Service Company as follows:
LIMOUSINE - Any automobile, other than a taxicab as defined by this chapter, used for hire for the conveyance of passengers in the City of Toronto, and formerly referred to in this chapter as a "livery cab."
TAXICAB – An ambassador taxicab, a standard taxicab, a Toronto Taxicab and an accessible taxicab.
LIMOUSINE SERVICE COMPANY - Any person or entity which accepts calls in any manner for booking, arranging or providing limousine transportation.
24In the City of Toronto case, Dunphy J. held that a “taxicab”, as defined in the By-law, was limited to the holders of any of the four categories of taxicab licences. Limousines included all other automobiles used for hire for the conveyance of passengers. Dunphy J. concluded that Uber Canada Inc. did not operate as a “Limousine Service Company” as Uber is not an entity that “accepts calls in any manner for booking, arranging or providing limousine transportation” and therefore did not meet the definition in the By-law. As a result, he dismissed the City’s request for an injunction against Uber Canada Inc.
25In Edmonton (“City”) v. Uber Canada Inc., 2015 ABQB 214, 19 Alta. L.R. (6th) 424, M.G. Crighton J. found that the City of Edmonton’s By-law may have been drafted to accommodate a more static, paper and people driven environment which lagged behind the technological response to individual preferences and demands. He concluded that Uber Canada Inc. was prima facie in clear and continuing breach of the City’s By-law. However, he found that Uber Canada Inc. was not a party to any licensing agreements between riders or drivers and did not own the servers that facilitated communication between the riders and drivers. As a result, he dismissed the City’s motion for an injunction against Uber Canada Inc.
26In City of Calgary v. Gold (20 November 2015), Calgary 1501-12242 (Alta. Q.B.), Poelman J. granted an injunction against approximately 50 Uber drivers named as defendants. In the Calgary case, the City was seeking to enforce its taxi licensing by-law pursuant to the provisions of s. 554 of the Municipal Government Act of Alberta.
27Section 26 of the City of Calgary’s Taxi By-law reads as follows:
No person shall charge a fare or fee to carry passengers or offer to carry passengers for a fare or fee unless the Motor Vehicle used or to be used has a valid [taxi plate licence], [accessible taxi plate licence], or [limousine plate licence] joined to it
28Poelman J. held that the City had presented evidence demonstrating that the named respondents had charged a fee to carry passengers and had therefore breached and were continuing to breach the City of Calgary’s Taxi By-law. As a result, he granted the injunction in favour of the City against the Uber drivers.
29The question of whether the Uber Drivers are included in the City of Ottawa’s definition of “taxicab” drivers has certainly raised a serious issue to be decided given the conflicting decision in three different cities.
Disposition of Issue #1 (Standing)
30I find that the plaintiff taxicab driver who is a ratepayer has standing to bring the motion for an injunction to enforce the City By-law.
Test for an Injunction
31In RJR Macdonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at pp. 347-349, the Supreme Court set out the following three part test to obtain an injunction:
(a) Is there a serious issue to be tried?
(b) Will the moving party suffer irreparable harm if an injunction is refused? and
(c) Does the balance of convenience favour granting an injunction?
32The plaintiffs submit that when a municipality is suing to enforce a By-law, proof of irreparable harm and the balance of convenience need to be considered; however, a strong prima facie case showing that the defendant is in clear breach of the By-law is the key consideration and the other two criteria are of secondary importance. They rely on the decisions of Kamloops (City) v. Southern Sand and Gravel Co. (1987), 1987 CanLII 2884 (BC SC), 43 D.L.R. (4th) 369 (B.C. S.C.), and Hamilton (City) v. Loucks (2003), 2003 CanLII 64221 (ON SC), 232 D.L.R. (4th) 362 (Ont. S.C.). These cases were all decided before RJR MacDonald and the motion before me is not brought by a municipality and so I find that the three part test for an injunction as set out in RJR MacDonald should be applied in this case.
33At p. 341 of RJR MacDonald, the Supreme Court stated that irreparable harm refers to harm that cannot be quantified in monetary terms or that cannot be cured, usually because one party cannot collect damages from the other.
ISSUE #2 – Is There a Serious Issue to be Tried?
34The taxicab drivers allege that the Uber drivers are breaching the Taxi By-law by operating a business that unlawfully competes with them. They further allege that the Uber drivers are intentionally causing serious economic harm to them.
35The Uber drivers submit that the plaintiffs have not raised a serious issue to be tried because the Uber drivers’ vehicles are not “for hire” and therefore they are not operating a “taxicab” as defined in the By-law. Secondly they allege that the economic tort claims made against the approximately 13 Uber drivers are destined to fail and do not raise a serious issue to be tried.
36In Lyon v. Denscombes, [1949] 1 All ER 977, at p. 979, the English Court of King’s Bench contrasted the concepts of “for hire” or “plying for hire” with for “private hire”
“…Private hire is distinct, in my opinion, from plying for hire, that is to say, using the car as a taxicab, standing in the street or driving about seeking passengers. It is private hire in the way that any private hire car is used, namely, by hiring the vehicle for a defined journey at a defined time.
37In Cogley v. Sherwood, [1959] 2 Q.B. 311, at pp. 324-325 and 331, citing Allen v. Tunbridge (1871), L.R. 6 C.P. 481, at p. 485, the Court of Queen’s Bench noted that a driver is “plying for hire” or “for hire” if he “invites the public to be conveyed”.
38In Toronto (City) v. Chamilov, [2001] O.J. No. 4549, at paras. 52 and 64, the Court found an unlicensed driver guilty of breaching the Toronto Taxi licensing By-law. The driver had been stationed at the Yorkdale mall with his roof light on, indicating his taxi was available to the public “for hire”.
39The plaintiffs submit that the cases cited by the Uber drivers refer to the “horse and buggy” days. They further submit that a plain reading of Ottawa’s taxi licensing By-law leads to the conclusion that the Uber drivers are individuals who are using their motor vehicles to transport individuals and as such are using their vehicles “for hire” as defined in the Taxi Bay-law.
Claim for Economic Loss by Unlawful Means
40The plaintiffs have claimed damages against the Uber drivers for a number of economic torts. The defendants submit that these claims constitute claims for pure economic loss, which are not recoverable at law.
41In the case of AI Enterprises Ltd. v. Bram Enterprises Ltd., 2014 SCC 12, [2014] 1 S.C.R. 177, the Supreme Court of Canada established the following test for the tort of economic loss by unlawful means:
(a) The defendant committed an unlawful act against a third party;
(b) The defendant must have intended to harm the plaintiff through the use of the unlawful means; and
(c) The plaintiff must have suffered economic harm.
42It is unclear whether the defendant Uber drivers have committed an unlawful act against a third party. They are alleged to have transported individuals with their motor vehicles in breach of the City’s taxi By-law, which maybe an unlawful act, but it is unclear that it is against a third party. The plaintiffs allege that the taxicab drivers, or the taxicab drivers whose taxi licence values have been reduced by the actions of the Uber drivers, are the third parties. Alternatively, they argue that the Uber drivers are entering into unlawful contracts with their passengers and their “unlawful act” is committed against the passengers who are the third parties.
Unjust Enrichment
43The plaintiffs also claim damages against the Uber drivers for unjust enrichment. In Garland v. Consumers' Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para 30, the Supreme Court set out three elements that must be proven to obtain this remedy; namely 1) an enrichment; 2) a corresponding deprivation; and 3) the absence of a juristic reason for the enrichment
44In Reach MD Inc. v. Pharmaceutical Manufacturers Association of Canada (2003) 2003 CanLII 27828 (ON CA), 65 O.R. (3d) 30 (C.A.), the Ontario Court of Appeal held that this tort does not require that the defendants’ predominant intention was to harm the plaintiffs but requires proof that their actions were in some measure directed against the plaintiffs, even though their predominant purpose was to advance their own interest and that of their members.
45The plaintiffs rely on the Supreme Court decision of Pro-Sys Consultants Ltd v. Microsoft Corporation, 2013 SCC 57, [2013] 3 S.C.R. 477, for the proposition that an action for unjust enrichment can exist even when the transfer from the plaintiff to the defendant is indirect. The plaintiffs allege that the Uber drivers are unjustly enriched by unlawfully taking fares from customers who would otherwise have paid these fares to the licensed taxicabs drivers.
Unlawful Act of Civil Conspiracy
46The defendants submit that the plaintiffs have not made any allegation that there was any agreement among the Uber drivers and as a result submit that there can be no conspiracy to do an unlawful act without such an agreement. The defendants submit that in addition there is no evidence that the alleged unlawful acts were “directed towards the taxicab drivers”.
47The plaintiffs rely on the decision of the Court of Appeal in Agribrands Purina Canada Inc. v. Kasamekas, 2011 ONCA 460, 106 O.R. (3d) 427, which held that this tort may be made out where the defendants act in combination or concert by agreement or “with a common design”. They allege that the Uber drivers have provided the Uber ridesharing service with a common design and have caused them damages.
Disposition of Serious Issue to be Tried
48I should not attempt to decide at this point whether any of the plaintiffs’ claims for economic torts will ultimately be successful when the matter goes to trial. However, I am satisfied that both the issues of whether the City’s By-law definition of “taxicab” applies to the Uber drivers and the plaintiffs’ claim for various economic torts raise serious issues to be tried. The plaintiffs’ claims are neither frivolous nor vexatious.
ISSUE #3 – Will the Taxicab Drivers or their Union suffer irreparable harm if an injunction is not granted?
49To establish “irreparable harm”, the plaintiffs must present “clear and not speculative” evidence that they will suffer irreparable harm in the absence of injunctive relief.
50At p. 341 of RJR MacDonald, the Supreme Court stated that irreparable harm was “harm which either cannot be quantified in monetary terms or which cannot be cured.”
51Two of the plaintiffs have provided affidavit evidence making a general statement that their incomes have gone down by 30-40% since Uber commenced operations in Ottawa. These statements have not been supported by any financial statements or any other documentary evidence, or any expert analysis linking a decline in their income to the introduction of the Uber ridesharing services. I find that the taxicab drivers have speculated that they may lose their jobs and also the Union has speculated that it may lose future revenue from reduced membership. The taxicab licence holders also allege that the values of their taxi licences have fallen.
52In RJR MacDonald, at p. 350, the Supreme Court of Canada stated as follows: “monetary loss of this nature will not usually amount to irreparable harm in private law cases.” The monetary damages referred to in RJR were the costs of complying with the regulations by immediately changing the cigarette packaging and then, if ultimately successful, changing it back. The taxicab drivers and their Union have claimed for monetary damages based on a number of alleged economic torts in this private law case which, following RJR MacDonald, would not usually amount to irreparable harm
53In this case, 13 of the defendant Uber drivers have been identified as having driven their motor vehicles to transport passengers arranged through Uber B.V.. Uber B.V. and Rasier B.V. keep a record of the financial details of every fare charged by an Uber driver and so the exact amount of the fares received by each of the 13 identified Uber drivers are discoverable and capable of exact calculation. The amount of monetary damages they have caused can therefore be quantified in monetary terms.
54In addition, only one taxicab driver has standing to enforce the By-law as a ratepayer and the City has chosen to study and review its Taxi licensing By-law rather than seeking an injunction to enforce it. The City will receive a report on this issue very shortly. The City will review this report and decide what policy it will adopt, and whether or not to amend the Taxi By-law to regulate or prohibit Uber and other similar ridesharing services.
55The taxicab drivers and their Union have also delayed bringing their motion for an injunction for almost 15 months as Uber commenced operation in Ottawa in October of 2014. The plaintiffs’ explanation is that they only discovered in November 2015 that the City would not move for an injunction and was studying the issue and as such, they submit that their delay is not a factor. I find that the taxicab drivers’ delay in taking any action for injunctive relief for about 15 months after Uber’s arrival in Ottawa is a factor which indicates that they were not and are not suffering irreparable harm that cannot be compensated by monetary damages, otherwise, they would have moved much sooner.
56The Uber drivers have produced a report presented to the City of Mississauga showing that Uber’s arrival in that City in 2012 increased the pie and did not unduly affect existing taxis. In 2014, the traditional taxi rides increased by 8.9% and decreased by 1.9% in 2015. This evidence was not objected to by the plaintiffs and the study did not relate to the City of Ottawa. The Mississauga study is also hearsay evidence and not from a Rule 53 qualified expert witness. As a result, the Mississauga study is given minimal weight and is only evidence that such a study was received by the City of Mississauga.
57The fact that the City will shortly receive its own study, which is not in evidence before me, is also a factor when considering whether irreparable harm will be suffered if an injunction is not granted. The City’s study from KPMG will analyse the economic impact of the arrival of Uber in the City of Ottawa on existing taxicab fares. The City will then decide what policy it will adopt based on evidence obtained from the study directly related to the City of Ottawa. This evidence, if properly before the Court, would be highly relevant to assist the Court in determining the issue of whether any irreparable harm is being caused.
58The case before me is distinguishable from the City of Calgary case where the City brought the motion for an injunction as opposed to the individual taxicab drivers and their Union. The City also benefited from acting in the public interest especially where public health or safety is involved. Where actions clearly breach a By-law enacted in the public interest for public safety, irreparable harm may be inferred and the balance of convenience favours following the By-law. In this private law case, individual taxicab drivers are acting in their own financial interest and not in the public interest.
59I am not satisfied that the plaintiffs have shown that they will suffer irreparable harm that cannot be compensated by monetary damages if an injunction is not granted for the following reasons: a) the plaintiff taxicab drivers are claiming economic damages that are easily quantified monetary terms, the amount of damages caused by the 13 identified Uber drivers would be relatively modest as the main damages to them would be caused by the Uber B.V. that operates the ride sharing program; b) the alleged losses being suffered are not supported by any documentary evidence or expert analysis and the damages claimed by the drivers are very speculative; c) only one plaintiff is a ratepayer with standing to enforce the City By-law by way of an injunction; and d) the City has decided to obtain an expert report to analyse the data to determine the extent of the impact caused by the arrival of Uber drivers before deciding what approach they will take to regulate Uber ridesharing service.
Disposition of Issue #3 of Irreparable Harm
60I find that the taxicab drivers and their Union have not shown that they will suffer irreparable harm that cannot be compensated by way of monetary damages if an injunction is not granted against the Uber drivers for the reasons given above.
ISSUE #4 – Balance of Convenience
61The City passed its Taxi By-law for the public benefit of providing safe taxicab transportation to residents of Ottawa. However, the City, who has the responsibility of ensuring that this public benefit is provided, has not sought injunctive relief, but rather has chosen to obtain an expert analysis of the economic impact and consider its policy options after receiving the expert analysis.
62The taxicab drivers and their Union seeking this injunction are not acting in the public interest, but rather are claiming damages to their own financial interest and thus their position is given less weight than if it was a regulatory body acting in the public interest seeking to enforce its regulations or By-laws before the matters are decided at trial.
63The taxicab drivers and their Union’s delay of 15 months before seeking an injunction is also a factor which weighs against granting an injunction. Their delay indicates that irreparable harm was not being suffered by them that could not be cured by an award of monetary damages.
64The fact that the City will shortly receive an expert report analysing the impact Uber is having on the taxicab drivers, and setting out the options available to the City is highly relevant evidence that is not before the Court. The City’s decision not to seek injunctive relief but to obtain expert analysis and decide what policy it will follow on how to regulate Uber and other ride sharing programs in the City is a factor when considering the balance of convenience that weighs in favour of refusing to grant an injunction without this highly relevant evidence.
65The taxicab drivers submit that the balance of convenience favours stopping the Uber drivers from continuing to operate unlawfully by breaching the Taxi By-law and favours granting an injunction. However this assumes a finding that the definition of “motor vehicle used for hire” applies to the Uber drivers. This issue has not been determined yet and given the conflicting decisions on motions for injunctions against Uber in the City of Toronto, and the City of Edmonton and as against the Uber drivers in the City of Calgary, where the claim for injunctive relief was made by the Cities, the outcome on this issue is not certain.
66I find that the fact that the Uber drivers are not required to be covered with a reasonable amount of Commercial Liability Insurance is a flaw in the Uber ridesharing program. This flaw has a negative effect on the safety of the public when weighing the balance of convenience and is a factor in favour granting the injunction. However the plaintiffs are not acting in the public interest, but in their own financial interest and this factor would weigh more heavily in favour of the Municipality who has a responsibility for public safety.
Disposition on Balance of Convenience Issue
67I find that the balance of convenience does not favour granting an injunction for the above reasons: namely, the taxicab drivers are acting in their own financial interest in a private law case and not in the public interest; there are conflicting court decisions on whether the definition of taxicab in By-laws applies to Uber drivers; the City will be receiving an expert report analysing the impact of Uber and considering options for regulating Uber, which is highly relevant evidence that is not before me.
Undertaking in Damages
68I am satisfied that the undertakings of damages given at the hearing are sufficient.
Disposition of Motion
69For the above reasons, the motion for an injunction by the plaintiffs is dismissed.
COSTS
70The defendants shall have 15 days to make written submissions on costs and the plaintiffs shall have 15 days to respond.
Justice Robert J. Smith
Released: March 30, 2016
CITATION: Abdullah v. Naziri, 2016 ONSC 2168
COURT FILE NO.: 16-67156
DATE: 2016/03/30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Abdullah Abdullah, Nawaf Elenezi, Asfaw Mekonen, Timothy Omotunde, Vikash Kumar, Botros Nakhle, Said Youssef Roukoz, Dawit Tegegne, Fezel Popal, Walid N. Salika, Taminderpal Singh Mokha, Georges Chamoun, Meshari Amir, Amrik Singh, Mohamud Mohamed Hassa, Michel Tarabie, Tanios Abou-Hamd, Muhammad Saood Khalid, Rafael Kamar, Ahmed Khandid, Hayder Abid Zeyd, Elias Karam, Getachew Ayele, Farid Haddad, Fadla Hamade, Ghassan Skaf, Unifor and Unifor Local 1688
Plaintiffs
– and –
Ahmad Hashim Maziri, Abrham Wossenu Zewde, Steven Albert Maurice Anthony Leger, Colleen Marese Pemberton Nnaemeka, mazen Sabbagh, Georges Abou-Eid, Alireza Najaf Zadeh, Osamwonyi Abiokunla Owie, Sainthia Bisengimana, Christopher Amiana, Reynold Pierre-Louise, Mohammad Kazem Tohidi Shabestari, Genet Negash Bayable, Stella Riesom, Teklezghi Ghebremedhin Yohannes, Abdullahi Jam Ali, Mohamed Hamdan, Aya Hamed, Yassin A. Mouhoumed, Apollos Gustanar, Jane Doe and John Doe
Defendants
REASONS FOR Uber injunction
R. Smith J.
Released: March 30, 2016