The Superior Court of Quebec has ordered the provincial government to pay more than $143 million to taxi permit owners, whose permits significantly devalued following the introduction of Uber in the province. This ruling comes as part of a class action lawsuit approved in 2018.
The lawsuit, centered on the concept of “disguised expropriation,” argued that Quebec’s deregulation of the taxi industry effectively stripped permit owners of their valuable assets. The provincial government had abolished the permit system in 2019 and relaxed other regulations, but the compensation offered fell short of the market value of the permits before Uber’s arrival, according to the permit holders’ legal team.
Following a thorough review, the court determined that Quebec owes the class action members $143,873,463, in addition to legal fees and interest starting from September 21, 2016. This date aligns with the provincial government’s pilot project to legalize Uber’s operations in Quebec.
To calculate this amount, the court assessed the market value of the permits as of September 21, 2016—over a billion dollars—and deducted the $873 million already paid by Quebec in financial aid to taxi drivers.
Including the court-ordered compensation and the government’s financial aid programs, Quebec will have paid over a billion dollars ($1,016,000,000) to taxi drivers due to the upheavals caused by Uber’s entry into the market.
Bruce Johnston, lawyer and co-founder of the law firm TJL, which led the class action, criticized the government’s aid programs as grossly inadequate. “The heart of the class action was the blatant injustice suffered by permit holders,” Johnston stated. He highlighted the disparity in compensation, where individuals who purchased their permits in 1976 for $10,000 received the same amount as those who bought theirs in 2013 for $200,000.
Before Uber’s disruption, the market value of taxi permits was dictated by supply and demand, as noted in the court’s decision. The monopoly-like conditions created a significant value, which permit owners reasonably expected to continue. Johnston cited examples of taxi drivers forced to delay their retirement plans due to the sudden devaluation of their permits.
Taxi Licenses vs. Uber Across Canada
The situation in Quebec mirrors similar tensions across Canada, where traditional taxi industries have grappled with the rise of ride-sharing services like Uber. In cities such as Toronto, Vancouver, and Montreal, the introduction of Uber has led to significant market disruptions, prompting calls for regulatory reforms and compensation for taxi permit owners. The balance between fostering innovation and ensuring fair competition remains a contentious issue in the evolving landscape of urban transportation.