City Solicitor warns Toronto council could lose Uber lawsuit, offers option to back down

The City's top lawyer is warning Toronto council that it could lose a lawsuit launched by rideshare giant Uber — if it doesn't change course on its recent licence cap.

A confidential briefing note written by the City Solicitor and obtained by CTV News reads, "without action by Council, Uber is likely to succeed in establishing that Council's decision does not satisfy the legal test that has been applied by the courts in prior cases. If so, the court will quash the bylaw."

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The development is a blow to Mayor Olivia Chow's plan to freeze the number of ridesharing licences until at least the end of next year.

In a surprise vote in October council voted 16-7 in favour of the move amid a discussion about transitioning the industry to zero-emission vehicles by 2030. Proponents, including Chow, argued limiting the number of licences would reduce pollution and congestion in the core — but Uber Canada responded with a lawsuit.

The ridesharing company alleges that the cap was enacted in bad faith and without notice, violating the city's own procedural bylaws.

In the confidential report to council, the Solicitor writes that there are "legal issues" with how the freeze was enacted. Rescinding the cap, she advises, would "render Uber's application moot;" pausing it would allow for consultation with the industry.

"Any cap implemented after receiving information from City staff and comments from stakeholders would be more defensible," the report reads.

Chow, asked Tuesday morning whether she would back down in the face of the lawsuit, responded: "No. Well, I can't comment on the court case. This is going to be in front of the court." Chow did, however, meet with the Solicitor late Tuesday to discuss the case.

The City Solicitor notes in the briefing that council does not need to change its previous decision, in which case it would simply direct legal staff to defend the court application.

The report pegs the City's prospective legal costs at up to $40,000 to respond to the litigation. If the City loses, the Solicitor notes, it would likely have to pay Uber's court costs, which could top $150,000.

Meanwhile, the group RideFair Toronto, named in the application, is applying for intervenor status in the lawsuit.

"You know, it's capped at 54,000 drivers roughly," Thorben Wieditz, who represents the group, told CTV News Toronto.

"But if people leave, new people can come in. So, you know, it's a rolling pause. And we believe that Uber is fully capable of making a good business in the city of Toronto with that amount of licences."

Uber has requested an expedited court date and will speak to the urgency of the case at a hearing on Dec. 19. City council meets Wednesday and will discuss the issue largely in-camera.

"We'll have a chance to obviously decipher the information and, you know, decide on the course of action that has to be taken," Coun. Michael Thompson said Tuesday.

"I'm sort of of a view that, you know, the threat of [a] lawsuit on a political decision or any decision, shouldn't be the consideration as to whether or not to back down."