Uber drives off city's attempt to ban it

The city has lost its bid to ban Uber from operating in Toronto.

In a decision handed down late Friday, Superior Court Judge Sean Dunphy rejected its request for an injunction, ruling that the California-based company does not require a licence to operate under current bylaws.

The action of ordering a ride with the Uber smartphone app is automated and involves software downloaded ahead of time, Dunphy ruled, so the drivers don’t “accept” communication from passengers.

“Accepting calls for transportation does require a license and Uber does not do that,” he wrote in a 30 page ruling.

Neither the mayor nor the major taxi companies were prepared to comment on the decision Friday evening.

“We are pleased with today’s ruling, which confirms that ridesharing is a new business model, distinct from traditional taxi services,” said Ian Black, general manager for Uber Canada in an emailed statement.

“Today’s outcome is a great win for the 5,000 drivers who need this flexible earning opportunity to make a living, and the 300,000 riders who rely on them to move around our great city.”

Uber, which began operating in Toronto in 2012, had steadfastly insisted it did not need to be regulated, because it was merely a technology company linking riders with drivers.

Taxi companies and the city of Toronto argued otherwise, saying Uber was acting like a taxi brokerage, finding taxis and drivers for passengers.

However, just weeks before the city’s injunction hearing was scheduled to begin, Uber applied for a taxi brokerage licence – though it has refused to apply for limousine licence, saying the city’s rules don’t meet Uber’s business model.

During the June 1 and 2 court court hearing, Uber’s lawyer Julie Rosenthal argued that Uber doesn’t need to be licensed as a taxi brokerage because it doesn’t actually dispatch taxis. Much of her argument hinged on the definition of the word, “accept,” as in accept a ride.

But city lawyer Michele Wright disputed the argument, noting Uber continues to find a driver if the first one rejects it, so it is in the business of dispatching drivers. Uber collects payments and has the power to suspend or boot passengers or drivers off the platform, she added, in an argument the judge rejected.

“If ‘accepts’ were read as broadly as the City suggests, then unintended consequences would abound. Such a definition would capture any telephone carrier since they are in the business of connecting calls and some of the calls they connect are certainly to request a taxicab or limousine transportation,” Dunphy ruled.

With files from Betsy Powell and Vanessa Lu.