Toronto taxi drivers win fair competition with ridesharing services, 2015-2016

Toronto Taxi Alliance (TTA) is a labor coalition that includes unions such as the United Taxi Workers Association and iTaxi Workers Association and represents the majority of taxi drivers in Toronto, Canada. The formation of this coalition came as a surprise to some in a city where the taxi industry was divided into two camps: those who opposed the unfair, “two-tiered” system where a single taxi company held most of the market and those who fought aggressively to maintain it. What united the opposing groups was a common enemy – UberX. With the rise of ride-sharing services like UberX since 2012, the whole taxi industry in Toronto felt increasingly threatened, as more and more people opted for their cheaper counterparts. Just as taxi driver Muhammad Asif said, “UberX, they are totally illegal and killing our business.”

On 14 May 2015, taxi of all colors swarmed the downtown core and snarled traffic on major streets near City Hall, turning the busy strips into a parking lot during a rally organized by the TTA. A chorus of car horns could be heard from ten blocks away. Protesters marched in Nathan Phillips Square in front of the City Hall, holding up homemade signs reading “Stop bandit cab [UberX]” and chanting “Stop illegal Uber!”

Demonstrators targeted Toronto mayor John Tory, who publicly said that “technology like Uber is here to stay.” The protesters accused Tory of colluding with big corporations at a cost of public safety and ignoring the interests of Torontonians, whose business Uber stole. The mayor’s spokesperson Amanda Galbraith fired back at the drivers, saying that the disruption did very little to serve or advance the public interest, while Mayor Tory adopted a more reconciling voice, suggesting that he would “prefer to be working with these companies in a constructive fashion to explore how our regulatory environment can change.”

Toronto Police responded by increasing bike patrols in the area and diverging oncoming traffic from roads that were blocked off by the protesters. However, the law enforcement did not make any arrest or attempt to disperse the crowd.

The demonstration took place at the same time as the taxi driver coalition filed an injunction application against Uber with help from some of the city’s lawmakers. The legal battle focused on Uber’s “often mentioned but never disclosed” car insurance plan and its broader implication to public safety. Members of the city council and the attorney for the taxi drivers argued that Uber was “unlicensed and uninsured” to service the people of Toronto, and that the city should ban its operations until it fully complied under municipal law.

Uber, on the other hand, maintained that it held a $5 million liability insurance policy on every driver of an Uber vehicle, and that the policy also extended to drivers under the UberX service who used their own cars. The company said that forced disclosure of the insurance policy would allow its competitors to copy and thus harm its business. Uber added that the mobile ride-sharing service was not breaking any rules and blamed the drivers for “engaging in unhelpful discourse” and blocking roads that created inconvenience for commuters.  

The battle between Uber and the city of Toronto reached a boiling point on 1 June 2015 when the court heard the case on injunction against Uber. Around 500 taxi drivers, who saw what Uber called the “sharing economy” as an existential threat to their business model, converged on the City Hall and set up a blockade of taxis in front of the municipal landmark. Like the demonstration two weeks earlier, the protesters held up signs that read “Public safety #1.” Sajid Mughal, President of iTaxi Workers Association, issued a press release ahead of the protest, expressing support for the hearing of the injunction case and remarking that “Private gain should not outweigh public safety.” Mughal said that without valid licenses and proof of insurances, passengers taking UberX could be financially liable for any accidents or injuries.

Ontario Superior Court Judge Sean Dunphy, however, ruled in favor of Uber and dismissed the injunction application, stating that Uber didn’t operate as a taxi company, and that there were no existing laws in Toronto to regulate such ride-sharing services. Hence, the judge suggested that UberX could not be banned using the taxi regulations, since it existed in a grey area where no existing laws applied to it.Judge Dunphy also said that this issue should not be resolved in court but in negotiations with the city council and Uber.

In a series of interviews with Toronto Life magazine after the protest, the taxi drivers unleashed much of their anger against Uber, accusing Uber drivers of membership in “a terrorist organization” that “terrorize[s] our community with impunity and disregard.” The drivers also highlighted the tough regulation of the taxi industry compared to the virtually zero municipal oversight on UberX, saying that taxi drivers needed to pay for insurance, install security cameras, and have cabs checked regularly while Uber did not. The interviewees claimed that they all saw a decline in business and revenue since the rise of the ride-sharing services.

On 9 December 2015, the taxi drivers, led by the TTA, staged their largest protest in the City Hall area. In the morning, over 2000 taxis descended on downtown Toronto, rolling as slow as 5 km/h on major streets and sounding their horns en route to City Hall. The slow-driving cabs caused several traffic jams on highways going into the city and paralyzed downtown traffic during rush hour. At one point, according to CBC News, traffic was completely stopped 6 blocks away from City Hall, even impeding ambulances and prompting them to take detours to reach major hospitals.

As the cabs converged on City Hall, one taxi driver got into a dangerous confrontation with an UberX driver during a live TV interview. The unidentified taxi driver banged on the window of a white Honda, then grabbed onto the UberX’s side mirror as the car tried to escape; he was dragged about 20 meters down the road before he let go of the car. The driver, who claimed to have been in the industry for 22 years, was unhurt. President Mughal of the iTaxi Workers Association denounced this action as an “unacceptable behavior,” but he also noted this showed the “level of desperation” among taxi drivers.

Police were present during the morning’s protest. One officer on a bike was struck by a taxi and was taken to hospital and treated for minor injuries. Police arrested one person in this incident, but did not disclose whether that person was the taxi driver who struck the officer. Police also issued several charges for unnecessarily slow driving.

At noon, Mayor Tory held a press conference and condemned the protest as “dangerous and disruptive” and the tactics as “unacceptable and doing a disservice to the drivers who I know are working very hard and are struggling;” he cited public safety concerns for “blocking ambulances and first responders, for police officers being knocked to the ground.” Remarking “The point has been made,” Tory acknowledged the hardship of the drivers and said that the city council had been working to update rules that would “address the concerns of traditional cab drivers while bringing services like Uber under the city's regulatory wing.” He also asked the protesters to “stand down” and halt the protest during the afternoon rush hour to allow commuters to move through the downtown core.

Beck taxi company – the largest market shareholder – also asked drivers to stop their protest and allow people to go home “without any added frustrations.” In a statement, Kristine Hubbard, operations manager at Beck, acknowledged the drivers’ frustration over a “lack of leadership from our civic leaders” who weren’t enforcing the bylaws or spending efforts to deal with the illegal competition that was “hurting [the drivers’] livelihood so much.” She also noted that the drivers were independent contractors and thus not subjected to follow her pleas.

The taxi drivers, however, ignored the pleas and continued their city-wide traffic-snarling protest. More than 100 drivers slowed the traffic and blocked at least one major downtown intersection during rush hour. Mughal argued that the continuation of the protest was necessary to let Torontonians and lawmakers know that Uber was a threat to the taxi industry. He said that the taxi drivers were “fighting for their livelihood” and that they had suffered for almost a year under the illegal activities of Uber. “Enough is enough.” Mughal also estimated that Uber operations in the city had resulted in a more than 40 percent loss in cab drivers’ earnings.

Police continued to have strong presence in the area throughout the afternoon, keeping a close eye on the blockade and aiming to prevent anyone from getting hurt again. Officers also issued parking tickets to taxis that were parked in the streets and blocking the intersections. Toronto Police Chief Mark Saunders spoke in a public session in late afternoon, saying that he was disappointed by the protest, which left one of his officers injured, and that “putting the public at risk” was not going to help change the laws. Chief Saunders also suggested that police had made a decision not to clear the intersection by force, citing that the protest remained peaceful in contrast to earlier skirmishes.

Protesters continued to block the intersection until 7 p.m. when Mayor Tory tweeted that he had spoken with Chief Saunders and granted a meeting between the drivers and the police chief if the demonstrators cleared the intersection by 7:30 p.m. Mayor Tory also emphasized the city was working to regulate the ride-sharing services and “create an equitable playing field.” Subsequently, the protest stopped and the drivers moved their cabs to the curb of the streets.

The battle between Uber and the traditional taxi industry remained heated in the following months. In January 2016, the City of Toronto granted Uber a taxi brokerage license, putting it on equal ground as regulated taxi companies, while UberX – its low-cost, use-your-own-car service – remained outside the bylaws.

On 2 February 2016, a dozen Toronto cabbies gathered with several hundred other taxi drivers on the steps of Parliament Hill in Ottawa, the nation’s capital, for an anti-Uber rally. The demonstrators held up signs that read “Ban illegal Uber and John Tory (Toronto mayor)” and chanted “Uber out” and “Stop Uber,” venting their frustrations over the government’s inaction. They demanded a federal action from Prime Minister Justin Trudeau to intervene on behalf of the municipal and provincial governments and put an end to the company’s operations in multiple cities. The head of UNIFOR, the nation’s largest private sector union that represented 310,000 members in all sectors, said that he would bring forward the drivers’ concerns during his meetings with the cabinet ministers.

The next day, Toronto city council met to discuss whether it would seek a court injunction against the “unlicensed” UberX service – a motion that was put forward by the city’s licensing and standards committee. The city’s legal department, however, argued against pursuing the injunction immediately, citing a previous failed attempt in June 2015 and the fact that the new injunction case would unlikely be heard by the court before the city council reviewed new regulations on taxis and ride-sharing services in April 2016. The council ended up voting “no” on an immediate action, but agreed with the legal department that they should seek the injunction at a more “appropriate” time. The statement added that the legal department and the police would continue to issue tickets to the 20,000 UberX drivers who were “operating illegally.”

Angry with the council’s inaction and fed up with bureaucracy, the United Taxi Workers Association (UTWA) threatened to stage demonstrations, including blocking traffics on major routes into the city, starting from 12 February 2016 – the Friday before the NBA’s All-Star weekend took place in the city. However, at a press conference on 10 February 2016, UTWA representative Paul Sekhon stated that the coalition, along with other individual drivers, had decided to cancel the protest, as the strike would “cause a big mess for local businesses and a big inconvenience for the public.” This decision was met with support from sympathetic city councilors. City counselor Glenn De Baeremaeker also spoke at the conference, urging Toronto residents and tourists to avoid taking UberX and condemning it as “an illegal service.” He said, “If you love somebody, do not let them get into an Uber cab.”

At the same time, the drivers continued to seek an injunction against UberX. Taxi driver Singh Tehethi said that he felt the urgency to act on his own when city council failed to endorse the injunction. Lawyer Jay Strosberg, who represented Tehethi, said that he hoped to have the case heard within 60 days, despite the pessimism from the city’s legal department.

On the other hand, Uber stood firm in defiance, accusing Toronto’s taxi industry for “stalling progress on reform.” The company’s spokesperson Susie Heath said, “An Ontario Supreme Court ruling, Mayor Tory, and Toronto city council have all recognized that Uber and ridesharing is a unique business in need of a new regulatory framework [not a carpet ban].”

On 3 May 2016, after hours of heated debate, Toronto city council passed a resolution 27-15 that granted the legalization of UberX under conditions and regulatory cuts in the taxi industry. Among the rules, UberX drivers would have to raise its base fare from $2.50 to $3.25, and they would need a class-G license and a permit from the city when using private vehicles to transport passengers. In addition, UberX drivers would be required to install all-weather tires and speak English – in line with the taxi driver training and regulations. On the other hand, regulatory cuts for the traditional taxi industry included relaxed rules for taxi driver training and the right to use Uber-style “surge” peak-time pricing on fares booked via a Smartphone app.