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Uber faces $300m lawsuit as disgruntled Toronto taxi drivers take a stand

Another day, another dispute for Uber to tackle. This time it’s the taxi drivers of Toronto who’re taking on the ride-hailing company, accusing it in a lawsuit filed with the Ontario Superior Court of Justice of having created “an enormous marketplace for illegal transportation” in the Canadian city.

The class-action case, represented by law firm Sutts, Strosberg LLP, seeks a whopping C$400 million ($307m) in damages. It’s also after a ruling banning the company from offering rides in the entire province of Ontario, a move that would cause extra trouble for Uber as it’s just this week launched in four additional Ontario cities, all a short distance from Toronto.

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Named plaintiff Dominik Konjevic’s claims the company’s UberX and UberXL services violate the Highway Traffic Act by having unlicensed drivers transport riders in exchange for payment, action the lawsuit says has diverted “millions of dollars of revenue away from properly licensed taxicab, limousine owners and drivers in Ontario.”

In many similar cases around the world where Uber has faced action over its services, the company has often argued that it’s a communications outfit that connects riders and drivers, not a taxi or brokerage business, and therefore is not subject to the same regulations as taxi firms. Steering clear of those regulations means it can operate more freely and keep costs down.

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“Uber is operating legally and is a business model distinct from traditional taxi services,” the San Francisco-based company said in response to Thursday’s filing. In a message to Reuters, Uber described the lawsuit as “protectionist” and “without merit,” at the same time reminding its latest opponent of Toronto city’s very recent attempt – and failure – to ban its service.

Both parties are now waiting to learn if a judge will hear the case.