Legal Issues

by Mike Masnick


Filed Under:
cabs, competition, lawsuit, taxis, toronto

Companies:
uber



Toronto Cab Drivers Sue Uber For Interference With Their Super Profitable Business Model

from the that's-how-it-works,-of-course dept

I was last in Toronto a few years back, pre-Uber, and I remember clearly having a long conversation with the cabbie who drove me from the airport to my hotel, about just how ridiculously corrupt the taxicab business is in Toronto. He was telling me how supply was artificially limited, and even things like being allowed to pick up passengers at the airport required under-the-table kickbacks to certain officials. The driver was pissed off about the whole thing. I'm reminded of that now, as the news comes out that some cabbies in Toronto are suing Uber itself, claiming illegal competition. This is interesting on a few levels. While we know that many cabbies are upset about the competition from Uber drivers, in most cases the direct attacks on Uber have come from the cities and politicians, rather than directly from the cabbies. Yes, there have been riots by cabbies in France, and protests other places, but actual lawsuits have mostly been limited. There are a few exception, such as when Chicago cabbies sued Uber with some nonsensical claims about false advertising.

Here the claims seem equally questionable:
Law firm Sutts, Strosberg LLP, which is representing the taxi drivers, said in a statement on Thursday that the named plaintiff, cab driver Dominik Konjevic, alleges that "Uber X and Uber XL have created an enormous marketplace for illegal transportation in Toronto".
There doesn't seem to be much of a claim here other than "we don't like competing." Or, as we've described it in the past, felony interference with a business model. It's not even clear how the Toronto cabbies have standing here, as you'd think anyone who would have a right to complain would be the passengers, but of course, that's not going to happen, because most of them actually like services like Uber.

There's also the fact that an Ontario court just rejected an attempt by Toronto itself to block Uber in the city, saying that the service was legal. The cabbies here are filing this under different "provincial" law though it seems likely to have the same overall outcome.

Yes, I'm sure if you're a cabbie in a cushy industry where there is tremendous corruption and artificially limited supply it must really suck to have to face real competition from players who are more innovative and provide a better overall service. But that doesn't mean it's illegal.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    JustShutUpAndObey, 24 Jul 2015 @ 2:57pm

    felony interference

    I know we keep referring to "felony interference with a business model" in a sarcastic manner and pointing out that it's not a crime.

    Not yet.

    I'm pretty sure, however, being a realist (what some people call a cynic) that that exact phrase soon will become an actual charge. Just as "Intellectual property" has become something the courts recognize now, they'll soon recognize "felony interference."

    I'm old enough to remember (and it wasn't that long ago) when "intellectual property" was used sarcastically. Most people never thought it would become a phrase in law.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Jul 2015 @ 3:09pm

      Re: felony interference

      See also Investor-State Dispute Settlements.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 24 Jul 2015 @ 3:50pm

        Re: Re: felony interference

        This. So much this. Alas, for I have only one insightful vote to cast.

        reply to this | link to this | view in chronology ]

      • icon
        Roger Strong (profile), 24 Jul 2015 @ 5:08pm

        Re: Re: felony interference

        The intersection of ISDS and Uber is kind of interesting.

        Consider that all U-Haul trucks not just in the US but in Canada have Arizona licence plates. "Apportioned" plates, under the International Registration Plan let them do this. (And given their notoriety for unsafe vehicles, they've been accused of often simply getting a new registration from Arizona when a vehicle is ordered off the road with safety issues, with local authorities having no way to monitor it.)

        It makes we wonder if - when U-Haul's safety problems made the news repeatedly in the late 2000s - whether NAFTA's ISDS rules are the reason foreign plates weren't disallowed. "The rules are in place, and changing them would hurt investors."

        Now consider that the traditional taxi drivers aren't just threatened by Uber drivers. In a decade both the traditional taxi companies and Uber will likely be replacing most of their drivers with automated vehicles.

        Uber's success - an international company prying open the local taxi markets as (eventually) an automated vehicle taxi service - opens the doors for others to do the same.

        Imagine multiple automated taxi services arriving in your city. Owned and operated from other states and countries. Each having one overseas call center serving many cities. With local contractors maintaining the vehicles. Vehicles that via apportioned plates are all registered in one state and possibly in another country. With all this protected by ISDS rules.

        Taxi drivers will look back on the Uber battles as the good 'ol days.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 24 Jul 2015 @ 6:09pm

          Re: Re: Re: felony interference

          But first Uber has to keep going for the next decade. Looking at all the negative press all over the world I kind of doubt that they are able to survive for that time.

          Look at what it took to get music labels to sell songs online. Companies/sites were sued to the ground and 2 new companies/sites opened.

          Currently all the attacks are focused on Uber so imho what they need is competition. Not to reduce prices or reduce their income but to distract the attacks a bit. It is easy to fight one company but what if there are 2+? It's easy to claim they are illegal when there is one but this argument is rather difficult when you have more Uber like companies than basic taxi companies.

          reply to this | link to this | view in chronology ]

    • icon
      Bergman (profile), 25 Jul 2015 @ 8:50pm

      Re: felony interference

      I know what I'll do if they pass a law protecting older business models from new and innovative ones.

      I'll found a horse-drawn buggy manufacturing business, and maybe an animal-rendering business, then sue the automotive and electric light industries for interfering with my business model.

      reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 24 Jul 2015 @ 3:04pm

    From the sounds of it the cabbies aren't complaining that Uber is operating illegally, but that they aren't operating illegally, in a system filled with required bribes and kickbacks.

    The cabbies are forced to pay a bunch of money under the table in order to do business in a highly corrupt system, and then someone comes along who sidesteps the bribes and shady aspects of it entirely, no wonder they're mad.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Jul 2015 @ 5:49pm

      Re:

      No, the problem is that they pay for all these kickbacks in return for limited competition and their complaint is that they aren't getting what they paid for. There is just too much competition. When they buy politicians they want them to stay bought.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Jul 2015 @ 3:08pm

    Is quite telling how the taxi company doesn't even consider LOWERING their ridiculous prices in order to compete. Doesn't even enter their minds. They have been so coddled that competition sends them immediately to court. I hope UBER runs them over and out of business.

    reply to this | link to this | view in chronology ]

  • icon
    mattshow (profile), 24 Jul 2015 @ 3:22pm

    Why is "provincial" in quotations? It's a real thing and distinguishing between municipal regulations and provincial laws is legitimate (of course, that doesn't mean this particular lawsuit is legitimate). This Toronto Star article has more information on exactly what law the lawsuit relies on.

    http://www.thestar.com/news/gta/2015/07/23/taxi-limo-drivers-launch-400m-class-action-lawsuit-aga inst-uberx-uberxl.html

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Jul 2015 @ 6:38pm

      Re:

      I asked the same question. Mike, provincial doesn't mean what you think it means. We have these things called provinces up here.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Jul 2015 @ 3:33pm

    Here in Phoenix they have mandatory minimum charge when travelling to the airport by cab. So in my case I live just a couple of miles away it used to be a $5 cab ride. Now the minimum charge is $15. So I watch the meter go up to $5 and as I'm dropped off it jumps up to $15. And they want a tip on top of it. They wonder why Uber is so successful.

    reply to this | link to this | view in chronology ]

  • identicon
    Joe, 24 Jul 2015 @ 3:39pm

    Deja-vu

    It's interesting this is coming up again in Toronto. A few years back, 2008, a ride share company called pickuppal.com tried to become a type of craigslist for ride sharing. A bus company called Trentway-Wagner freaked out over the potential competition.

    The parallels are pretty blatant. Established transportation service doesn't like upstart ride-share as they don't have as many regulatory obligations. Also competition bad. According to this article, the province moved to legalize ride-sharing as a result so I'm not sure whatever became of this.

    http://www.thestar.com/news/ontario/2008/10/29/province_moves_to_legalize_sharearide_services.html

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Jul 2015 @ 3:53pm

    how many times has the same thing happened with other industries, mostly in the USA? the 'old guard' refuses to go with the flow, refuses to adapt, refuses to progress, preferring instead to not just do whatever they can think of doing, legal and illegal, but stop others from progressing as well! not only do they eventually get left behind, their industries die a death! rather than keep things going and carry on making a nice living (even if it is defrauding the IRS and withholding payments which should have gone to artists), they end up losing almost everything!! serves the fuckers right!!

    reply to this | link to this | view in chronology ]

    • icon
      tqk (profile), 24 Jul 2015 @ 8:33pm

      Re:

      As long as the music's still playing, they'll keep dancing and potential problems are easy to shrug off as hypotheticals. To them, you're just fearmongering if you say different. It's this head in the sand attitude that pretty much demands a Google, an Uber/Lyft, or a Microsoft to step up and exploit this entrenched lethargy. Microsoft is already starting to see it happen to itself. If Google and Uber/Lyft don't continue to innovate, they'll see it happen to their fiefdoms too.

      There's always hungry predators out there looking for the old, injured, young, or weak. You can't hide within the herd forever.

      reply to this | link to this | view in chronology ]

  • identicon
    Dr Evil, 24 Jul 2015 @ 4:01pm

    opens a can of worms!

    Uber should welcome the lawsuit... does Canada allow discovery? Start bringing cabbies and officials into depositions and into court, under the penalty of perjury, and admit or deny that there is illegal activity going on .. a few bribes, a few favors ..how many disgruntled cabbies or disillusioned (former) officials would it take
    to blow it all (the system) up?

    do it cabbies!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Jul 2015 @ 4:06pm

    Take a Third Option

    I figure, why give my money to a bunch of corrupt cabbies or sleazy hipsters? Toronto has extensive public transit as it is.

    reply to this | link to this | view in chronology ]

    • icon
      JoeCool (profile), 24 Jul 2015 @ 4:20pm

      Re: Take a Third Option

      It does? Last time I was at a computer show in Toronto, I never saw a hint of the slightest public transport. We used cabs to get around, and boy was it expensive! Fortunately, we could write that off as a business expense.

      reply to this | link to this | view in chronology ]

      • identicon
        Klaus, 27 Jul 2015 @ 5:59am

        Re: Re: Take a Third Option

        Really?

        My take is just the opposite, I always use the train in Toronto, that or the hotel coaches... quick, clean, quiet, nary a problem and as cheap as chips.

        reply to this | link to this | view in chronology ]

  • icon
    Sheogorath (profile), 24 Jul 2015 @ 10:20pm

    Wow, I'm surprised that Toronto retailers aren't suing Amazon for 'tortious interference with a business model' because competition.

    reply to this | link to this | view in chronology ]

  • icon
    shane (profile), 25 Jul 2015 @ 5:08pm

    I drove a cab for a brief period of time, and my solution is to simply do away with all regulation of ride sharing and renting to begin with. It's a freaking cottage industry. If I want to drag someone around in my car for money, what's it to the government?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 25 Jul 2015 @ 6:31pm

    Mike, why in the world did you put the word provincial in scare quotes?

    reply to this | link to this | view in chronology ]

  • identicon
    Docrailgun, 26 Jul 2015 @ 7:36pm

    Uber

    Uber can solve all their problems by not taking a single cent of the fares and ending "surge" pricing. They've already made lots of money and can still make money running ads on the app. That way, they can claim (rightly, then) that Uber is just a ride-sharing app rather than the cab service they are now.

    reply to this | link to this | view in chronology ]

  • identicon
    Aditya Agarwal, 9 Feb 2017 @ 2:49am

    seo.adityaagarwal@gmail.com

    Hi

    I am Aditya Agarwal,
    Business Development Manager,

    I was on your website .Would you be interested in a possible redesigning of the site or addition feature that might benefit the overall usability and user experience which usually leads to better sales.

    We are an Indian Web Design and Development firm with over 8 years of experience. In these tough times, where it is hard to maintain the top line, we can help share the bottom-line for you.

    We will be happy to help execute SEO & Web Design and Development projects at a much lower cost than what you have in house - No compromise on quality!

    We are at present partnering with over 45 firms from UK, US, Australia, Canada.

    Our primary focus is:-

    1. Web Design
    2. Mobile Website Design
    3. Web Development
    4. SEO (Search Engine Optimization)
    5. Flash Design
    6. Graphic Designs
    7. Ecommerce Solutions
    8. Web Copywriting
    9. Database programming
    Do let me know if you are interested and I would be happy to share our Methodologies, past work details and client testimonials.

    I look forward to your mail.

    Kind Regards,
    Aditya Agarwal

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Show Now: Takedown
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.