Uber launches lawsuit over 'bad faith' council vote, calls on court to overturn ridesharing cap

Uber Canada is taking the City of Toronto to court over a surprise council vote to freeze the number of ridesharing licences.

The company filed an injunction application with the Ontario Superior Court of Justice Monday, alleging that a cap on the number of private transportation company (PTC) licences in the city is illegal, and that “Uber will be irreparably harmed if [it] is not stayed.”

The 16-7 October council ruling emerged out of a discussion about transitioning the industry to zero-emission vehicles by 2030. Proponents, backed by Mayor Olivia Chow, argued that freezing the number of licences available to ridesharing companies like Uber and Lyft would reduce pollution and decrease congestion in the core—despite warnings from city legal staff.

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“We heard from the Chief Solicitor at the time,” Councillor Brad Bradford, who voted against the cap, said Monday, “that this of course opens us up to all sorts of [legal] risks.”

In court documents obtained by CTV News Toronto, Uber Canada alleges that the City failed to provide notice of the cap to the public, drivers, and other stakeholders contrary to its own procedural bylaws.

It also claims that limiting the number of available licences unlawfully discriminates between prospective and existing drivers. The documents allege council and the mayor acted in bad faith by concealing plans to introduce it and then disguising it as an amendment to a separate motion.

"Because the case is in front of the court at this point, I really cannot comment," Chow told CTV News Toronto Monday night. "It's really up to the city legal defense team to deal with this case in front of the court."

In a statement, the mayor's office said council's motion deals with greenhosue emissions, congestion and "makes life more affordable for rideshare drivers."

"The motion maintains the current number of licensed drivers for rideshare companies or taxis. There are currently 52,000 rideshare licenses in Toronto. Those who do not currently have a license can obtain one as existing drivers do not renew," the statement reads.

The motion does not not reduce the number of rideshare licenses but rather maintains the same number of licenses, Chow said. 

Etobicoke resident Michael Johnson-Roach, who applied to drive for Uber in Toronto in October, was shocked to find out after he paid for and completed the city-mandated training course that he was locked out of getting his ridesharing licence.

“It's getting crazy living in the city,” Johnson-Roach, who had hoped to earn extra income driving for Uber, said Wednesday.

“The reality is [the cap] is impacting us more negatively than whatever positive effect they thought it might have,” he said.

“It's hit our pockets.”

Uber Canada’s legal application notes that prospective rideshare drivers are being denied the opportunity to earn income, and claims the cap will lead to longer wait times and degraded service for riders.