MONTREAL — Quebec cab drivers have been given the green light to sue the provincial government, alleging it stood by as Uber moved into their market.
A lawyer for the taxi drivers said if they win their claim, it could cost the government $1 billion to compensate drivers for lost revenues and a drop in the value of their taxi permits.
"It is a significant loss of value, and it must be compensated," Marc-Antoine Cloutier said after Quebec Superior Justice Mark Peacock ruled Wednesday that the drivers' case can proceed and be heard on its merits.
Drivers have accused the government of inaction as Uber's ride-hailing service moved into the province without being subjected to the rules imposed on taxis.
They argue a government-sanctioned pilot project with Uber that began in October 2016 has further devalued their costly permits.
"At the heart of this case is the question of why, if two groups are carrying out the same commercial activities, the government treats one group differently than the other," Peacock wrote in a 46-page decision. "Based on the premise posed by (the applicant), an inference is possible that this differential treatment may be caused by bad faith."
Peacock said it will be up to the taxi drivers' lawyers to prove that at trial, but the arguments he heard presented "a sufficient inference of bad faith."
The class action covers everyone who has held a taxi permit since October 2013, both before and after the pilot project imposed certain restrictions on Uber.
The project was recently renewed for another year until October 2019, a move opposed by taxi drivers.
The judge suspended the class-action proceedings until a separate case about the legality of the pilot project — currently before the Quebec Court of Appeal — is resolved. He said a decision in that case is critical to the class action and two other cases launched against Uber.
Last August, the province announced a compensation plan paying drivers amounts ranging from $1,000 to $46,700 per taxi permit, depending on the region where the driver operates.
The province has estimated there are 7,600 taxi licences in Quebec and that more than 4,500 would receive the maximum payout under the compensation plan, which was not negotiated with the taxi industry.
Groups representing taxi drivers in Montreal and Quebec City said they welcome the ruling allowing the class action to go forward. They said the compensation offered by the province does not cover their losses.
"When issuing compensation, it was always clearly stipulated by taxi owners and accepted by the government that these sums did not in any way exclude a possible class action," the taxi drivers' organizations said in a joint statement. "That's why today taxi license owners have some of the money they are owed, and they can take legal action if they want to."