Uber Is Facing a $400M Class Action Lawsuit in Ontario

Can Uber fend off the latest attack on its operations in Ontario?

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Jul 23 2015, 6:31pm

Image: Flickr/Jason Tester Guerilla Futures

A taxi driver filed a CA$400 million class action lawsuit against Uber on Thursday, on behalf of all taxi and limo companies in the Canadian province of Ontario. The lawsuit seeks both monetary compensation from Uber, as well as a court injunction that would prevent the company's UberX and UberXL services from further operation.

The $400 million claim was filed by the law firm Sutts, Strosberg LLP on behalf of taxicab owner Dominik Konjevic, who alleges that Uber has been "diverting millions of dollars of revenue" away from taxi and limousine companies operating in Ontario, according to a statement released Thursday.

The lawsuit alleges that UberX and UberXL drivers have been operating illegally because they're in contravention of section 39.1 of the Ontario Highway Traffic Act, which prohibits the "arranging" of a commercial trip by a non-commercially licensed vehicle.

Konjevic's lawsuit comes just weeks after a Toronto Superior Court judge denied the City of Toronto a permanent injunction against Uber operating in the city. According to the judge, the city was unable to prove that Uber is acting as a taxi broker, a key point of the city's case against the company. UberX and UberXL, unlike a standard Uber ride, allow any licensed driver with a personal vehicle to ferry strangers around for money.

"This protectionist suit is without merit," Uber Canada spokesperson Susie Heath told Motherboard. "As we saw from a recent court ruling in Ontario, Uber is operating legally and is a business model distinct from traditional taxi services."

Sutts, Strosberg LLP did not respond to Motherboard's request for comment.

Watch more from Motherboard: Smart Highway

Invoking the Highway Traffic Act against UberX drivers isn't a new strategy. In March, Toronto police attempted to charge 11 UberX drivers under the Highway Traffic Act after a week-long undercover sting operation. Some charges relating to commercial insurance were dropped by the prosecution because, Uber's lawyer said, an UberX ride does not meet the criteria for a "commercial motor vehicle" as defined by the Act. However, the charges related to arranging a ride without a license remained and will be heard in August.

Last week, Toronto city councilor Jim Karygiannis cited the Act in a warning to visitors to the Pan Am Games, suggesting that a ride in an UberX car could result in a $20,000 fine.

However, Toronto police responded by stating that they won't enforce section 39.1 of the Highway Traffic Act as it applies to UberX drivers because of the June decision by the prosecutor in Toronto Superior Court. "The courts have made it clear that the Highway Traffic Act is not the way to go," Toronto police spokesperson Mark Pugash told Motherboard at the time.

In a bit of cosmic synchronicity, or perhaps irony, Uber announced today that it will be expanding its operations into smaller Ontario cities near Toronto: London, Guelph, Hamilton, and Waterloo.