$400 Million Lawsuit Could Drive Uber out of Toronto

Cab drivers in Canada’s largest city have employed an extremely American tactic in their war to drive Uber out of town. They’ve filed a $410 million ($300 million USD) lawsuit against the networked transportation company.

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The real goal of the suit is to get a judge to issue an injunction that will delay or halt Uber’s attempts to resume service in Toronto. The class-action suit filed by the Sutts, Strosberg LLP law firm would effectively block Uber service in every city in Canada’s most populous province, Reuters reported. That would also include Kitchener, Ottawa, Hamilton and London as well as Toronto.

“UberX and UberXL have created an enormous marketplace for illegal transportation in Toronto,” a brief quoted in The Toronto Sun states. The suit seeks $400 million in compensatory damages and $10 million in damages in addition to an injunction stopping UberX from operating in the province.

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The suit comes less than a month after Superior Court Judge Sean Dunphy ruled that Uber is not a taxi broker and had not violated Toronto’s city bylaws. That allowed Uber to operate in the city despite attempts by the government to keep it out of town.

Now attorney Jay Strosberg is trying another tactic; he is accusing Uber of violating the Ontario Highway Traffic Act by operating UberX in the province. He maintains that Uber violates the law because it charges passengers for rides. If successful, that could shut down Uber in Ontario and threaten it in other Canadian provinces and possibly some U.S. states.

This lawsuit once again reminds us of the legal gray area that Uber operates in. Is Uber a taxi service, an app, or a transportation brokerage? A good way to think of Uber is as a transportation brokerage that connects drivers with passengers.

Another fascinating question here is whose responsibility is it to make sure drivers are properly licensed and insured? Is it Uber, passengers, the drivers or the government? That’s the question that’s effectively shut down Uber in Florida.



One thing is certain from this lawsuit: There is one group that certainly profits when Uber comes to town—lawyers. Whenever Uber sets up shop, legal action is sure to follow.

It will probably only be a matter of time before similar lawsuits are filed against Uber in the United States. The big question we have to ask is, will the lawsuit help Uber expand by removing legal impediments or create a new barrier to the expansion of networked transportation?