Uber, a global rideshare corporation operating in countries around the world, recently asked the British Columbia Supreme Court to order an injunction against the City of Surrey preventing the municipality from issuing fines or otherwise sanctioning Uber drivers operating in Surrey. This comes after the mayor proclaimed that the grace period for allowing Uber and similar companies to operate without penalty in Surrey had expired.
No Available Licensing Process
On January 23 of this year, Uber was granted a licence to operate in the Lower Mainland, including Surrey, under the Passenger Transportation Act. The next day, Uber began operations in the area. Later in the day, the company received an email from Surrey’s General Manager of Corporate Services stating that it was unauthorized to operate in Surrey given that it had not been granted a municipal licence. As such, any Uber drivers found operating in Surrey would be fined.
The mayor claimed that Uber was operating in the city without a business licence, and would hold the company and its drivers accountable as long as it continued to do so. The mayor claims to have invited Uber to apply for the required licences but has not made any indication as to whether the applications would be approved. Further, there does not appear to be any licencing process in place suitable for a company such as Uber.
The existing business licences that must be obtained by taxi companies operating in Surrey consist of an annual fee of $161.75 per company, plus an additional $441.50 for each car the company operates. Uber claims that these licences are specifically designed for taxi companies, which are entirely different operations. They point out that other BC municipalities such as Vancouver, Richmond and Burnaby have created dedicated licences for ridesharing companies, which Uber has secured. The company contends that there is no applicable licence to apply for in Surrey at present, but that the company would comply if Surrey were to implement one. The municipality has agreed that there is no appropriate process in place for a rideshare company such as Uber.
Licences Used to Bar Rideshare Programs from Operating in Surrey
Further, in the court application filed by Uber, the company points out various instances in which the mayor has stated an intention that rideshare companies would never be permitted to operate in the municipality. Notably, the mayor said in September that he would not be issuing licences to any ridesharing companies, and that business licenses remained a tool in the city’s back pocket to thwart rideshare companies from operating there.
Complicating matters, the provincial Ministry of Transportation has declined to weigh in on the matter. A spokesperson has said that municipalities in British Columbia are entitled to require a business licence and that the licence does not have to be specifically created for a ridesharing company. The Ministry’s position is that it has provided a framework for cities to require and issue business licences, but how a city chooses to enforce them is up to the city.
Meanwhile, Uber claims that the fines and other sanctions are illegal. In a statement, the company said that the province of British Columbia has specifically stated that rideshare companies are not taxi companies. Therefore, a licence aimed at a taxi company is not appropriate for a business like Uber. Uber claims that the city is using the licencing process strategically to prevent it from operating there.
The Merits and Balance of Convenience Favour Uber
The court held that the city’s efforts to ban rideshare businesses by refusing to provide a legitimate licencing process was not only unfair but also unlawful. The court stated that:
Surrey’s attempt to ban Uber comprises naked political grandstanding occurring with indifference to or even contempt of the rule of law. Uber’s success on the merits is all but inevitable.
The court also held that the balance of convenience strongly favoured Uber, as it would no doubt suffer financial losses without an injunction. The court found that, if the city was permitted to continue fining Uber, the losses in profit and market share that Uber would suffer would be impossible to quantify. The business would lose out on being one of the first rideshare operations in Surrey, which would have a significant impact. Further, the matter was gaining quite a bit of media attention, and the court was unwilling to allow the resulting damage to the company’s reputation if the injunction were not granted.
Overall, the court found that the city’s position was untenable, and Uber was likely to succeed in the eventual trial on the merits. The injunction was granted.
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