B.C. court strikes down City of Vancouver's newest ride-hailing fees | Daily Hive

Lutsenko Oleksandr/Shutterstock

The Supreme Court of British Columbia has ruled in favour of Uber Canada, striking down a 1.5-year-old bylaw by the City of Vancouver that required ride-hailing companies to pay per-stop fees for picking up or dropping off passengers in the Metro Core — the areas encompassing the entire downtown Vancouver peninsula and Central Broadway — during peak hours.

The decision, outlined in a written ruling by Justice Ormiston late last week, found that the bylaw was “unreasonable” and beyond the municipal government’s legal authority, as outlined in the provincially legislated Vancouver Charter and the provincial Passenger Transportation Act.

Through the municipal government’s 2024 budget approval by the Vancouver City Council in late 2023, the bylaw requires ride-hailing companies to pay for permits to pick up or drop off passengers in the Metro Core for trips made between 7 a.m. and 10 p.m. Beginning in January 2024, the per pick-up or drop-off fee was $0.25 for zero-emission vehicles and $0.50 for all other vehicles.

This was implemented as both a congestion and curbside management strategy, and as a way of generating more revenue for the municipal government, with City staff initially suggesting it could raise millions of dollars per year, after a few years of implementation.

You might also like:

Under legislation, only the Passenger Transportation Board (PTB) — the independent provincial entity that approves and regulates the operations of ride-hailing and taxi businesses, and private bus operators — can set ride-hailing rates, determine where ride-hailing licensees can operate, and regulate the number of such Transportation Network Services (TNS) vehicles.

Within the Lower Mainland and Sea to Sky regions, the City of Vancouver administers and issues licenses for the ride-hailing Inter-Municipal Business License (IMBL) on behalf of all of the partner municipal governments within both regions — enabling ride-hailing companies and their vehicles to operate within the PTB-designated zone. This includes handling IMBL’s various annual fees paid per company and vehicle.

But by placing an added per-trip fee based on the location of the pick-up and drop-off within the Metro Core, this went against the PTB’s sole jurisdiction over determining such matters, according to the judge.

“By restricting the operating area of TNS vehicles and prohibiting essential functions of TNS vehicles across the entire Metro Vancouver core for 15 high-demand hours in any 24-hour period, there is no reasonable way the City could decide it was not regulating the number of TNS vehicles operating in the City. In fact, there is compelling evidence that this was precisely what the City set out to do. The resulting bylaw imposes significant limitations on the unfettered supply allowed by the provincial Board, with the option for TNS providers to pay to increase it,” reads the ruling.

“The evidence before this Court is that stopping to pick up and drop off passengers are essential functions of TNS vehicles. While transporting a passenger is also an essential function, operational boundaries for passenger-directed vehicles are defined based on where a vehicle stops to pick up a passenger. I cannot find that the City could reasonably decide the bylaw does not regulate the number of TNS vehicles operating under an authorization in Vancouver, even if the bylaw includes exceptions to the prohibition.”

Map of Metro Vancouver’s Metro Core, defined as the downtown Vancouver peninsula and the Central Broadway Corridor. (City of Vancouver)

“While the bylaw may not impose an absolute prohibition, it limits the number of TNS vehicles operating in Vancouver to only those that (i) pass through Metro Vancouver without dropping off or picking up passengers, and (ii) those that fall within the prohibition for which the TNS provider agrees to pay a fee,” continues the ruling.

The judge also rejected the municipal government’s claim that the bylaw’s permit fees were not a “rate,” noting that simply giving a charge a different name does not change its true nature — especially when it functions in practice as the very thing it is claimed not to be.

Furthermore, the judge found that the bylaw only makes sense if it is meant to financially pressure ride-hailing companies to operate fewer vehicles, or to indirectly raise costs for passengers when companies pass the fee along. Uber previously noted these additional rates were passed on to customers.

“While a permit fee could conceivably be different than a ‘rate’ charged to the consumer, I am satisfied based on how the City decided to craft this bylaw, that the purpose of the bylaw could only be met if the permit fee is levied as a ‘rate’ as defined in s. 1 of the Act. A ‘rate’ is not limited to the fare charged by the licensee, it includes ‘any other fares, fees or charges’ collected for the transportation of passengers,” reads the ruling.

“It is not logical or reasonable to decide a fee for stopping to commence or complete that transportation would not fall within this definition. In my view, it was unreasonable for the City to decide that a fee for TNS vehicles doing business in the Metro core did not constitute the kind of ‘minimum charge … based upon zones or districts” that the City is expressly prohibited from imposing.'”

However, the judge disagreed with Uber’s argument that the permit fee effectively behaved like a road toll — something the City is also not allowed to implement under provincial legislation.

The City argued it was not a toll because it only applied to stopping to pick up or drop off passengers, not just driving through. The judge agreed with the City on this point, as a toll is generally understood as a charge for travelling along a road. Since this fee was for stopping, not for simply driving, the City could reasonably see it as different from a toll — similar to how parking fees are not considered tolls, even if you need to park on a street you always use.

Up until late 2022, the municipal government was also planning congestion pricing — akin to road tolls — for the Metro Core area. It had set aside millions of dollars for planning the scheme, but it was ultimately cancelled by elected officials shortly after that year’s civic election.

Upon inquiry, the City told Daily Hive Urbanized that it “respects the judicial process and acknowledges the BC Supreme Court’s decision.” City staff are now reviewing the ruling and considering their next steps.

Keerthana Rang, a spokesperson for Uber Canada, also told Daily Hive Urbanized, “We welcome the clarity from the court. We remain committed to working with the City, avoiding unnecessary fees, to maintain affordability for Vancouverites.”

According to the company, Vancouver already has the highest ride-hailing fees in Canada.

You might also like: