Toronto Taxi Drivers Denied Class Action Over Uber Licensing

• Author: Omar Ha-Redeye
• Date: December 29, 2019

Toronto likely has the most educated taxi drivers in the world.

Long dismissed as an urban myth, a 2012 study by Citizenship and Immigration Canada confirmed that over 80% of taxi drivers in Toronto are immigrants, the highest in any city in Canada, and many of them are highly educated,

Overeducation occurs both among Canadian-born and immigrant taxi drivers, but is at a higher rate among immigrants, especially among recent and very recent immigrants.

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The distribution pattern of field of study for postsecondary-educated taxi drivers is quite different between the Canadian born and immigrants. For the Canadian born, nearly one third have a degree in architecture and related technologies, 14.5% studied in business, management, marketing and related support services, and 13.5% studied in personal, protective and transportation services. Among immigrants, however, the top postsecondary field is business, management, marketing and related support services, accounting for 15.9%; while architecture and related technologies and engineering rank second and third, accounting for 13.7% and 13.4% respectively. The percentage of taxi drivers with engineering degrees is much higher among immigrants (13.4%) than among the Canadian born (2.2%).

Some blame Canada’s point-based immigration system, which attracts the best talent around the world, but then fail to utilize these skills properly in our economy. This isn’t necessarily new, as unemployed Torontonians turned to driving taxis during the Great Depression, even though it was highly competitive over the scarce fares of the day.

Perhaps it’s no surprise that a bunch of highly educated cab drivers with backgrounds in business would seek to be self-employed themselves. Many sought to purchase their own taxi license over the years, especially as taxi leases in Toronto increased in price.

Toronto launched the Standard Taxicab Owner Licences system in 1963. Regulations were amended in 1974 to allow drivers to operate a taxi they don’t own, through a lease. More recently, regulation of taxis can be found under s. 94 of the City of Toronto Act, 2006, with additional provisions under ss. 6, 8, 10, 86 more generally for the regulation of businesses. Taxi regulations can generally be found under Chapter 545 of the Toronto Municipal Code, until By-Law 1517-2019 amended this regulation and created a new regulation specifically for the licensing of vehicles for hire under Chapter 546.

In January 1995, the average monthly cost of a taxi lease in Toronto was $750, which rose to $1,244 in 2011. The value of the Standard Taxicabs also rose, from $80,900 in 1998, to $210,100 in 2011.

For many of these immigrant taxi drivers in Toronto, saving up to purchase their own cab was very much their Canadian dream, and plan for financial independence. To encourage this, the city released an “Ambassador” licence in 1998, prohibiting leasing of these licenses, and requiring the owner to personally own and operate the taxi for a minimum number of hours each month.

Unfortunately for them, disruption was on its way. Ride sharing programs entered the scene and ravaged the taxi industry. Uber launched a dispatch service to taxis in Toronto in 2012, and then expended their operations to non-licensed drivers in 2014. Although initially attempting to resist these initiatives, the city’s changes in Chapter 546 allowed Uber to operate legally in Toronto under a private transportation company (PTC) license.

Many of these immigrants who had put their life savings into purchasing a taxi license saw its value diminish. As expected, they protested. But then they sued.

The Ontario Superior Court of Justice recently released a decision in Eisenberg v. Toronto (City), denying a certification motion for a class action against the City of Toronto for failures to enforce provisions of the Toronto Municipal Code relating to the regulation of taxis, as the plaintiffs failed to present a legally tenable cause of action.

The plaintiffs claimed that the city was negligent in their enforcement of Chapter 545, failing to meet a standard of care to the licensed plate owners. By adopting Chapter 546, the taxi owners claimed a pure economic loss due to the actions of the city....