Toronto Cab Drivers Sue Uber For Interference With Their Super Profitable Business Model

from the that's-how-it-works,-of-course dept

Fri, Jul 24th 2015 2:49pm — Mike Masnick

I was last in Toronto a few years back, pre-Uber, and I remember clearly having a long conversation with the cabbie who drove me from the airport to my hotel, about just how ridiculously corrupt the taxicab business is in Toronto. He was telling me how supply was artificially limited, and even things like being allowed to pick up passengers at the airport required under-the-table kickbacks to certain officials. The driver was pissed off about the whole thing. I'm reminded of that now, as the news comes out that some cabbies in Toronto are suing Uber itself, claiming illegal competition. This is interesting on a few levels. While we know that many cabbies are upset about the competition from Uber drivers, in most cases the direct attacks on Uber have come from the cities and politicians, rather than directly from the cabbies. Yes, there have been riots by cabbies in France, and protests other places, but actual lawsuits have mostly been limited. There are a few exception, such as when Chicago cabbies sued Uber with some nonsensical claims about false advertising.

Here the claims seem equally questionable:

Law firm Sutts, Strosberg LLP, which is representing the taxi drivers, said in a statement on Thursday that the named plaintiff, cab driver Dominik Konjevic, alleges that "Uber X and Uber XL have created an enormous marketplace for illegal transportation in Toronto".

There doesn't seem to be much of a claim here other than "we don't like competing." Or, as we've described it in the past, felony interference with a business model. It's not even clear how the Toronto cabbies have standing here, as you'd think anyone who would have a right to complain would be the passengers, but of course, that's not going to happen, because most of them actually like services like Uber.

There's also the fact that an Ontario court just rejected an attempt by Toronto itself to block Uber in the city, saying that the service was legal. The cabbies here are filing this under different "provincial" law though it seems likely to have the same overall outcome.

Yes, I'm sure if you're a cabbie in a cushy industry where there is tremendous corruption and artificially limited supply it must really suck to have to face real competition from players who are more innovative and provide a better overall service. But that doesn't mean it's illegal.

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Filed Under: cabs, competition, lawsuit, taxis, toronto
Companies: uber

31 Comments

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JustShutUpAndObey, 24 Jul 2015 @ 2:57pm

felony interference
I know we keep referring to "felony interference with a business model" in a sarcastic manner and pointing out that it's not a crime.

Not yet.

I'm pretty sure, however, being a realist (what some people call a cynic) that that exact phrase soon will become an actual charge. Just as "Intellectual property" has become something the courts recognize now, they'll soon recognize "felony interference."

I'm old enough to remember (and it wasn't that long ago) when "intellectual property" was used sarcastically. Most people never thought it would become a phrase in law.
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That One Guy (profile), 24 Jul 2015 @ 3:04pm

From the sounds of it the cabbies aren't complaining that Uber is operating illegally, but that they aren't operating illegally, in a system filled with required bribes and kickbacks.

The cabbies are forced to pay a bunch of money under the table in order to do business in a highly corrupt system, and then someone comes along who sidesteps the bribes and shady aspects of it entirely, no wonder they're mad.
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Anonymous Coward, 24 Jul 2015 @ 3:08pm

Is quite telling how the taxi company doesn't even consider LOWERING their ridiculous prices in order to compete. Doesn't even enter their minds. They have been so coddled that competition sends them immediately to court. I hope UBER runs them over and out of business.
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Anonymous Coward, 24 Jul 2015 @ 3:09pm

Re: felony interference
See also Investor-State Dispute Settlements.
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mattshow (profile), 24 Jul 2015 @ 3:22pm

Why is "provincial" in quotations? It's a real thing and distinguishing between municipal regulations and provincial laws is legitimate (of course, that doesn't mean this particular lawsuit is legitimate). This Toronto Star article has more information on exactly what law the lawsuit relies on.

http://www.thestar.com/news/gta/2015/07/23/taxi-limo-drivers-launch-400m-class-action-lawsuit-aga inst-uberx-uberxl.html
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Anonymous Coward, 24 Jul 2015 @ 3:33pm

Here in Phoenix they have mandatory minimum charge when travelling to the airport by cab. So in my case I live just a couple of miles away it used to be a $5 cab ride. Now the minimum charge is $15. So I watch the meter go up to $5 and as I'm dropped off it jumps up to $15. And they want a tip on top of it. They wonder why Uber is so successful.
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Joe, 24 Jul 2015 @ 3:39pm

Deja-vu
It's interesting this is coming up again in Toronto. A few years back, 2008, a ride share company called pickuppal.com tried to become a type of craigslist for ride sharing. A bus company called Trentway-Wagner freaked out over the potential competition.

The parallels are pretty blatant. Established transportation service doesn't like upstart ride-share as they don't have as many regulatory obligations. Also competition bad. According to this article, the province moved to legalize ride-sharing as a result so I'm not sure whatever became of this.

http://www.thestar.com/news/ontario/2008/10/29/province_moves_to_legalize_sharearide_services.html
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Anonymous Coward, 24 Jul 2015 @ 3:50pm

Re: Re: felony interference
This. So much this. Alas, for I have only one insightful vote to cast.
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Anonymous Coward, 24 Jul 2015 @ 3:53pm

how many times has the same thing happened with other industries, mostly in the USA? the 'old guard' refuses to go with the flow, refuses to adapt, refuses to progress, preferring instead to not just do whatever they can think of doing, legal and illegal, but stop others from progressing as well! not only do they eventually get left behind, their industries die a death! rather than keep things going and carry on making a nice living (even if it is defrauding the IRS and withholding payments which should have gone to artists), they end up losing almost everything!! serves the fuckers right!!
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Dr Evil, 24 Jul 2015 @ 4:01pm

opens a can of worms!
Uber should welcome the lawsuit... does Canada allow discovery? Start bringing cabbies and officials into depositions and into court, under the penalty of perjury, and admit or deny that there is illegal activity going on .. a few bribes, a few favors ..how many disgruntled cabbies or disillusioned (former) officials would it take
to blow it all (the system) up?

do it cabbies!!
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Anonymous Coward, 24 Jul 2015 @ 4:06pm

Take a Third Option
I figure, why give my money to a bunch of corrupt cabbies or sleazy hipsters? Toronto has extensive public transit as it is.
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JoeCool (profile), 24 Jul 2015 @ 4:18pm

Re: opens a can of worms!
cabby: If I gotta pay bribes, so should they!

judge: Bribes to who? Please, be specific.
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JoeCool (profile), 24 Jul 2015 @ 4:20pm

Re: Take a Third Option
It does? Last time I was at a computer show in Toronto, I never saw a hint of the slightest public transport. We used cabs to get around, and boy was it expensive! Fortunately, we could write that off as a business expense.
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Roger Strong (profile), 24 Jul 2015 @ 5:08pm

Re: Re: felony interference
The intersection of ISDS and Uber is kind of interesting.

Consider that all U-Haul trucks not just in the US but in Canada have Arizona licence plates. "Apportioned" plates, under the International Registration Plan let them do this. (And given their notoriety for unsafe vehicles, they've been accused of often simply getting a new registration from Arizona when a vehicle is ordered off the road with safety issues, with local authorities having no way to monitor it.)

It makes we wonder if - when U-Haul's safety problems made the news repeatedly in the late 2000s - whether NAFTA's ISDS rules are the reason foreign plates weren't disallowed. "The rules are in place, and changing them would hurt investors."

Now consider that the traditional taxi drivers aren't just threatened by Uber drivers. In a decade both the traditional taxi companies and Uber will likely be replacing most of their drivers with automated vehicles.

Uber's success - an international company prying open the local taxi markets as (eventually) an automated vehicle taxi service - opens the doors for others to do the same.

Imagine multiple automated taxi services arriving in your city. Owned and operated from other states and countries. Each having one overseas call center serving many cities. With local contractors maintaining the vehicles. Vehicles that via apportioned plates are all registered in one state and possibly in another country. With all this protected by ISDS rules.

Taxi drivers will look back on the Uber battles as the good 'ol days.
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Anonymous Coward, 24 Jul 2015 @ 5:49pm

Re:
No, the problem is that they pay for all these kickbacks in return for limited competition and their complaint is that they aren't getting what they paid for. There is just too much competition. When they buy politicians they want them to stay bought.
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Anonymous Coward, 24 Jul 2015 @ 6:09pm

Re: Re: Re: felony interference
But first Uber has to keep going for the next decade. Looking at all the negative press all over the world I kind of doubt that they are able to survive for that time.

Look at what it took to get music labels to sell songs online. Companies/sites were sued to the ground and 2 new companies/sites opened.

Currently all the attacks are focused on Uber so imho what they need is competition. Not to reduce prices or reduce their income but to distract the attacks a bit. It is easy to fight one company but what if there are 2+? It's easy to claim they are illegal when there is one but this argument is rather difficult when you have more Uber like companies than basic taxi companies.
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tqk (profile), 24 Jul 2015 @ 8:33pm

Re:
As long as the music's still playing, they'll keep dancing and potential problems are easy to shrug off as hypotheticals. To them, you're just fearmongering if you say different. It's this head in the sand attitude that pretty much demands a Google, an Uber/Lyft, or a Microsoft to step up and exploit this entrenched lethargy. Microsoft is already starting to see it happen to itself. If Google and Uber/Lyft don't continue to innovate, they'll see it happen to their fiefdoms too.

There's always hungry predators out there looking for the old, injured, young, or weak. You can't hide within the herd forever.
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Sheogorath (profile), 24 Jul 2015 @ 10:20pm

Wow, I'm surprised that Toronto retailers aren't suing Amazon for 'tortious interference with a business model' because competition.
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shane (profile), 25 Jul 2015 @ 5:08pm

I drove a cab for a brief period of time, and my solution is to simply do away with all regulation of ride sharing and renting to begin with. It's a freaking cottage industry. If I want to drag someone around in my car for money, what's it to the government?
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Anonymous Coward, 25 Jul 2015 @ 6:31pm

Mike, why in the world did you put the word provincial in scare quotes?
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Anonymous Coward, 25 Jul 2015 @ 6:38pm

Re:
I asked the same question. Mike, provincial doesn't mean what you think it means. We have these things called provinces up here.
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Bergman (profile), 25 Jul 2015 @ 8:50pm

Re: felony interference
I know what I'll do if they pass a law protecting older business models from new and innovative ones.

I'll found a horse-drawn buggy manufacturing business, and maybe an animal-rendering business, then sue the automotive and electric light industries for interfering with my business model.
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JoeCool (profile), 26 Jul 2015 @ 10:29am

Re:
This is the US - we think using "province" instead of "state" is funny. Silly Canadians and their silly word choices. :)
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Docrailgun, 26 Jul 2015 @ 7:36pm

Uber
Uber can solve all their problems by not taking a single cent of the fares and ending "surge" pricing. They've already made lots of money and can still make money running ads on the app. That way, they can claim (rightly, then) that Uber is just a ride-sharing app rather than the cab service they are now.
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Klaus, 27 Jul 2015 @ 5:59am

Re: Re: Take a Third Option
Really?

My take is just the opposite, I always use the train in Toronto, that or the hotel coaches... quick, clean, quiet, nary a problem and as cheap as chips.
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John Fenderson (profile), 27 Jul 2015 @ 10:49am

Re: Re:
The language divide is worse than that. In the US, "provincial" means "backwater".
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Yet Another Anonymous Coward, 28 Jul 2015 @ 6:09am

Re:
An insurance liability.
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Yet Another Anonymous Coward, 28 Jul 2015 @ 6:10am

Re: Re:
Also, taxes would be due on your earnings.
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JoeCool (profile), 28 Jul 2015 @ 11:00am

Re: Re: Re:
Which is exactly why we think it's funny! They're calling their states something akin to "country bumpkin place", which is hilarious... to us.
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Blackcareverywhere.com (profile), 23 Nov 2020 @ 7:27pm

Airport transfers VS UBER
I can understand the taxi driver concern, but I would like to say, on the other hand, Taxi companies had a monopoly in the market and they used to make a lot of money before UBER,

In the Good time when the taxi companies were leading in Toronto, they should work on their technology and should improved the system for the customers. but unfortunately, at that time.

They didn't take any steps like CUSTOMER'S ONLINE APP, PROVIDING THE TAXI SERVICE ACCORDING TO THEIR LOCATIONS, RATING SYSTEM, where customer should have the option to share his/her experience with the service provider in order to improve their facility.

Actually uber work on the taxi industry deficiencies, and try to work there and make the product/service to the customer

Where the customer has the facility, they can book the ride from anywhere by sharing the location with the app. and they arrange the car right from of the customer house/apartment, doesn't matter if it's snow outside or rain.

The customer doesn't need to stand outside to find the taxi

Thanks for considering my opinion.

Regards.
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