Given the City of Vancouver’s long-standing and very vocal desire to become the “Greenest city” in North America, and following the October 7th, 2014 moratorium on San Francisco-based ride sharing app Uber from setting up in Vancouver, little has changed for the poster child of the new “sharing economy”. While the political machination are legendary, I shall leave those issues alone and focus on the legal issues at play regarding Uber’s presumptive entry into the Vancouver market.
On March 23rd of this year, four Vancouver taxi companies that were collectively seeking an injunction to prevent car service Uber from starting up operations in the City, have dropped their lawsuit. Uber’s response was to simply say that their injunction was without merit. In that regard, it is interesting to note, that the the City of Toronto unsuccessfully attempted this spring to get a court injunction against Uber.
Legally speaking, what are the objections to a ride sharing service such as Uber, operating within the confines of the City of Vancouver. If Toronto is an example, one of the complaints focused on Uber drivers potentially failing to remit HST. I would note, that Uber drivers are independent contractors, and their responsibility to remit HST is applicable only once they reach the $30,000 minimum threshold required by Canada Revenue Agency. It does not seem like much of a risk, and in any event, that exemption applied to all business operators, with little of no real risk of non-compliance.
Clearly, there are a myriad of insurance issues related to ride share services, not the least of which is a potential denial of coverage, for operating a commercial vehicle service in what is otherwise a private vehicle. In a British Columbian context, ICBC advises that (at a minimum) a Class 4 (restricted) license is required. This is a commercial driver’s licence, which allows you to drive up to 10 persons including the driver. This is not ICBC’s only requirement.
In California, another legal challenge suggests that the drivers are really more like employees of the company rather than private contractors, which could open the door for some form of class action by Uber drivers themselves, who think they should be given the same protection as employees. This could also lead to a number of unintended tax consequences for both Uber and it’s drivers.
Beyond that, clearly there is the issue of the taxi driver’s investment in their licenses, which issue has galvanized there number against increased competition and has enhanced their resistance to it. But does this in any way serve the interests of the riding public who rely on taxis and, presumably, would enjoy the benefits of the Uber business model in our city?
The government powers that be, are going to have to balance the interests of that portion of the population that would like to utilize a ride share business service such as Uber, against the entrenched and prevailing artificial restrictions on the supply of taxicabs within the city. Moreover, while public safety is a prevailing concern (and one that presumably can be quite readily resolved), efficiency, alternate service models and convenience for the riding public must also be thrown into the mix.
Time will tell where the City of Vancouver will end up on this issue, but I wouldn’t bet against Uber, just yet.