A trial opens Tuesday as part of a class action where taxi drivers accuse the Quebec government of having made their licenses lose all value by allowing the ride-sharing company Uber to operate, then abolishing the permit system.
According to the participants in the class action, the government’s “negligence” led to the expropriation of taxi license owners in the sectors where Uber offered its services, without fair and reasonable compensation.
When Uber launched its activities in Quebec in 2013, the government allowed it to operate even if it did not comply with the regulations in place. This situation has led to a reduction in demand for taxi permits and, consequently, a drop in their value, the plaintiffs argue.
The plaintiffs also allege that actions taken by the government, including the establishment, in 2016, of a pilot project aimed at legalizing Uber’s operations in Quebec, accelerated the reduction in the value of permits. These were eventually eliminated as part of a reform of the taxi industry in 2019.
In the plaintiffs’ view, in implementing its pilot project to legalize Uber’s operations, the government was negligent, acted in bad faith and deliberately caused taxi drivers’ licenses to lose value.
Previously, the government strictly controlled the number of taxi permits in each city in the province. For example, in 2015, Montreal was able to accommodate 4,522. Result: the price of permits soared, reaching around $200,000 in Montreal in 2015.
But when Uber entered the market, the value of these licenses began to decline, as new drivers did not want to pay a significant amount of money to obtain one in a rapidly changing industry.
Then, in 2019, the government adopted a law abolishing the permit system, relaxing other regulations at the same time. And while the government has compensated the licensees, their lawyers say many of them received about $150,000 less than the market value of the licenses before Uber arrived in the province.
“In many cases, these licenses represented their owners’ most important financial asset, in addition to being their retirement plan and the inheritance they planned to leave to their children,” explains the law firm Trudel Johnston & Lspérance, which represents the former license holders, in a press release.
The class action, authorized in 2018, aims to obtain compensation equivalent to the market value of a taxi owner’s license before Uber’s arrival in Quebec in 2013 and $1,000 in punitive damages for each member of the group.
The office of Minister of Justice Simon Jolin-Barrette refused to comment on this matter on Monday because the matter is before the courts.
However, the government has already argued that it cannot be sued for its policy decisions and argued that the allegations contained in the class action are not specific.