Law Times

Law Times • August 24, 2015 Page 3 www.lawtimesnews.com Uber facing a gamut of legal challenges By tali FolKinS Law Times n the wake of the City of Toronto's un- successful attempt this spring to get a court injunction against ride-booking service Uber, many people will be waiting to see a report on a public con- sultation process that could lead to a new bylaw regulating it. The drafting of such a bylaw, however, seems unlikely to end the legal wrangling around Uber, at least given the opposition the service has stirred up among taxi driv- ers. According to Marc Andre Way, presi- dent of the Canadian Taxi Association, the company or its drivers are f louting a range of laws. "At a minimum, there are four lev- els where something is not properly done," he says. The City of Toronto, Way notes, failed to get a court injunction requiring Uber to apply for a licence to operate as a taxi or limousine company. However, Toronto has been laying charges against individual Uber drivers for failing to have the proper licence to own a limousine and failing to have their vehicles approved by the city's licensing and standards division. Other Ontario cities have been laying similar charges. Way also contends that Uber drivers are wrongfully avoiding paying the harmo- nized sales tax. "Your [Uber] receipt will in- dicate only the amount on the trip" and not include tax, he says. By riding with Uber, he says, "you're basically in a sense facilitating an underground economy." Way also believes Uber drivers lack ad- equate insurance, a concern shared by the Insurance Bureau of Canada, which has said it's unclear whether they have commercial coverage, a more expen- sive and comprehensive offering that taxi drivers must carry. Finally, says Way, Uber drivers also risk charges under On- tario's Highway Traffic Act that forbids drivers of vehicles other than buses from picking up passen- gers for a fee unless they have either a public vehi- cle licence or a municipal licence to operate a taxi. In response to Way's allegations about Uber or its drivers violating bylaws and the Highway Traffic Act, Uber spokes- woman Susie Heath says Superior Court Justice Sean Dunphy's decision on Uber this July shows the com- pany "is a legitimate model operating le- gally and is a unique business that is dis- tinct from [a] taxi." As for the insurance carried by its drivers, Heath says: "Every ride on the UberX platform in Canada is backed by $5 million of contingent auto liability insurance covering bodily injury and property damage. "In the event of an accident during an UberX trip, passengers, pedestrians, other drivers, and the community at large can rest assured knowing that ride-sharing partners are well covered by commercial auto insurance in addition to any insur- ance coverage maintained by the driver." Uber, Heath insists, pays all of its applicable taxes and in- structs its drivers to do so as well. However, she says as UberX drivers are independent contractors, it's their responsibility to remit the tax as appli- cable once they reach the $30,000 minimum threshold required by the Canada Revenue Agency. Adrian Myers, a commercial lawyer with Torkin Manes LLP and a professed Uber cus- tomer, says the company may soon be facing an- other legal challenge. A ruling this June in Cali- fornia in which a court found Uber drivers are really more employees of the company than private contrac- tors "could open the door to a larger class action by Uber drivers who think they should be given the same legal protection as employees," he says. Whatever the result of these legal dis- putes, the ball is now in the court of gov- ernments to decide what sort of policy they should adopt around a type of company that wasn't on the radar when they drew up existing laws and regulations, says Myers. It's a decision, he says, that should involve balancing how much of Uber's business model depends on skirting the regulatory burdens facing its competitors and how much its service benefits consumers. "I think the two things that legisla- tures have to weigh when thinking how to regulate Uber is how much of Uber's business model is premised on avoiding the costs of regulation . . . and how much of the business model is successful be- cause there's an artificial restriction on the supply of taxicabs in the city," he says. "We should be sympathetic to a gov- ernment that wants to make sure that ev- erybody who gets into a taxicab or a vehi- cle that's driving them somewhere is going into a safe vehicle. . . . People are less sym- pathetic to the idea that if somebody can get insurance, if they can get licensed, they should not be allowed to do so because there's a supply restriction being placed on this industry by the government." Days after Dunphy's decision, repre- sentatives from Uber and the taxi industry met in Toronto and agreed they were will- ing to compromise on the issue of ground transportation in the city. Two days later, Toronto city council voted to launch a re- view of the city's bylaws with the intention of drafting regulations that would cover traditional taxis and limousines as well as companies like Uber. Already, the Region of Waterloo has provided a potential way forward with a new proposed bylaw to regulate drivers for companies like Uber. A consultation process involving mem- bers of both the public and the industry is now underway, says City of Toronto spokeswoman Tammy Robbinson. "City staff will bring a comprehensive report to licensing and standards on Sept. 9, 2015, to provide the background necessary for an informed debate and decision-mak- ing process," she says. "After that, if required by council, draft regulations would be written." LT NEWS EARLY BIRD ENDS SEPT. 4 Register online at www.lexpert.ca/cpdcentre For more information, please contact Lexpert® Events at 1-877-298-5868 CLOUD 2.0 – DRAFTING AND NEGOTIATING EFFECTIVE CLOUD COMPUTING AGREEMENTS Cloud 2.0 is here and as customers grow more sophisticated, Cloud computing agreements are evolving to meet regulatory and legal environments and increasing customer needs. However, as the cloud market matures, not all Cloud computing agreements are created equal. Using a balanced approach, we will teach you to understand Cloud agreements, separating the "buzz" from the Cloud. We will offer you practical guidance to drafting and negotiating effective Cloud computing agreements, taking into account the technological, business and legal considerations of your organization's use of Cloud computing technologies and Cloud providers. COURSE LEADER Lisa R. Lifshitz Partner, Torkin Manes LLP COURSE HIGHLIGHTS • Cloud 2.0 – Evolving Cloud Agreements and Current Contract Trends • Drafting Balanced Representations and Warranties/ Indemnities • Demystifying Service Level Agreements - Avoiding the "Gotchyas" • Best practices for Privacy and Data Security • Negotiating the Exit – Ensuring Successful Transition • Clouds for Financial Service Providers • Clouds for Healthcare Providers/ Pharma DATE & LOCATION October 6, 2015 St. Andrews Club and Conference Centre 150 King St West, 27th Floor Toronto, ON M5H 1J9 Webinar also available. Untitled-5 1 2015-07-22 2:29 PM I Governments need to balance how much of Uber's business model relies on skirting regulatory burdens and how much it ben- efits consumers, says Adrian Myers.

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