My Thoughts on the Uber and Surrey

Uber has launched a lawsuit against the City of Surrey to prevent it from issuing bylaw tickets to drivers who are caught operating a ride sharing vehicle without a business license. I have previously written for Vancouver Is Awesome on the interesting legal quandary raised by this decision.

In this blog post, I am going to address some of my thoughts about the Uber lawsuit against Surrey and whether the injunction could be granted. I will also address some of the complaints about the conduct of the bylaw officers amounting to entrapment.

The Business License Issue

The crux of this lawsuit is Uber seeking a ruling to prevent Surrey from ticketing its drivers for operating their ride sharing vehicles. I have read the documents filed in support of the application as well as the Surrey business license bylaw. And, while I agree that Surrey is behaving badly here, I do not think that Uber will necessarily be successful.

Yes, the province has enacted legislation that effectively prohibits municipalities from blocking ride hailing. However, it has not enacted legislation that prevents a municipality from requiring Uber or its drivers to get a business license.

And this is where it gets interesting.

There appears to be no evidence in the lawsuit that any of the drivers or Uber employees have attempted to file for a business license. Indeed, they would not even have had time to submit the application and have it reviewed by the time they brought the injunction.

The application alleges that there is no class of business license available for the drivers to apply. This may not be the case.

I downloaded Surrey’s business license application form. You can find one here. The form does not require a person to check a box or a particular type of business. It simply requires the person to identify the type of business that they are running. Once the $50 application fee is paid, the business license application will be reviewed.

What Uber appears to be referring to in its application is the issue of the business license fee, once the application is approved. And it is the case that there is no fee for ride sharing businesses, or for drivers explicitly. However, there are two that fit somewhat.

The first is “taxi.” A ride sharing platform is somewhat equivalent to a taxi, and that may be the closest insofar as it comes to applying for the actual work done.

The second is “Contractor – other.” The Surrey Business Bylaw defines various types of professions in a broad manner, so that people who may not fit exactly in one category can still find themselves covered in another. The definition of contractor, and the “other” category in Appendix A, appear to perfectly capture what an Uber driver is doing.

The definition reads as follows:

“Contractor” includes a person who undertakes to perform construction, building, carpentry, plastering, lathing, shingling or concrete work, or any other work or service at a certain price or rate or for a fixed sum, except where a license fee for the other work or service is specifically imposed elsewhere in this By-law.”

But wait! That would mean a person (driver) who undertakes to perform work or service (driving) at a certain price or rate (Uber’s pricing scheme, supplemented by existing provincial laws), and not one that is specifically covered in the bylaw.

This is not surprising. Most pieces of legislation have a general provision in order to address issues that arise from the way the world might change faster than the laws can.

Without evidence that anyone from Uber actually attempted to apply for a license under this bylaw and definition, I think Uber will have a difficult time making out its factual basis for the application. Whereas, if the drivers and company applied for a license and were not granted one under this definition, the drivers could then rely on the common law doctrine of estoppel to bolster their injunction application, supported by the province’s position on the fact that municipalities cannot prohibit ride hailing.

Uber may want to rethink its legal approach in this injunction application until some effort has been put forward to actually seek out and be refused a license.

One final thought on this issue. Uber argues in its filings that it is almost inevitable that it will succeed in its ultimate challenge to Surrey’s actions. That may be the case, but the question on an injunction application is whether the injunction will prevent irreparable harm. Uber alleges that compensating drivers with damages after the fact would be impossible. However, this is not the law.

Financial damages are almost always not considered to be irreparable harm. Particularly when the party to the lawsuit is a multi-national corporation valued at tens of billions of dollars. I’m not sure that a few thousand dollars, or even a hundred thousand dollars, in fines is necessarily an example of irreparable harm for Uber.

Optics help.

Had Uber launched this litigation with a representative plaintiff who is struggling to make ends meet and needs to drive Uber to earn enough to put food on the table, the irreparable harm argument may have some legs to it. But I have a hard time, as will a BC Supreme Court judge, accepting that Uber cannot be put right with financial damages.

This is all ignoring the fact that any driver who receives such a bylaw infraction, and Uber itself, is entitled to file a dispute of that ticket and the fine is not payable until the dispute is adjudicated. This means that Uber, and its drivers, have a reasonable avenue to avoid having to pay any fines while the litigation is taking place. Indeed, it is likely that the tickets would be held in abeyance until the litigation is settled if such a request was made on behalf of drivers and the company.

And so the idea that anyone in the circumstances will suffer irreparable harm by the imposition of these tickets is a little overblown. And not acknowledging the weakness of that point in the argument and properly addressing it makes Uber appear to lose credibility on the more important issues in this case.

Entrapment

A lot of people have also reached out to me on Twitter to ask about whether the bylaw officers using the app to book rides and then ticketing the drivers is lawful, or whether it amounts to entrapment.

The reality is that as unseemly as this conduct is, it is not illegal nor is it entrapment.

As I noted in an earlier blog post, in Canadian law, entrapment occurs where the police induce a person to commit a crime, or where they provide an opportunity to a person to commit a specific crime without having a reasonable suspicion that person is involved in that criminal activity.

There is no inducing that is taking place here. No one who has not already downloaded the Uber app, checked themselves in as available to accept a ride in Surrey, and obtained the required class of license to operate a ride sharing vehicle is being tricked into becoming an Uber driver by bylaw officers.

Indeed, the very fact that these drivers have to meet a number of licensing requirements with the province in advance of operating the ride hailing vehicle tends to show that they are not being induced into committing a crime.

As far as providing an opportunity, this one is a little more grey, but still comes out in favour of the bylaw officers. That is because the police can provide an opportunity to commit a crime if they have a reasonable suspicion that a person is involved in that unlawful activity.

By logging on to the app, a person can see what vehicles are in the area and get a general estimate of how long it will take to get a ride without ever having to book one. This is the important point. Uber’s existing service does not require officers to provide the opportunity for the offence before they are able to gather the relevant information to suspect that a person, identified through the app, is committing an offence.

And the reasonable suspicion requirement does not have to be specific to a person. Police have successfully used locations where offences are suspected as being committed to overcome this.

In R. v. Mack, way back in the 1980s, the Supreme Court of Canada addressed the issue, stating:

We have already addressed whether a person would be induced, and ruled out that this is likely.

The absence of a reasonable suspicion or a bona fide inquiry is significant in assessing the police conduct because of the risk that the police will attract people who would not otherwise have any involvement in a crime and because it is not a proper use of the police power to simply go out and test the virtue of people on a random basis.  The presence of reasonable suspicion or the mere existence of a bona fide inquiry will, however, never justify entrapment techniques: the police may not go beyond providing an opportunity regardless of their perception of the accused’s character and regardless of the existence of an honest inquiry.  To determine whether the police have employed means which go further than providing an opportunity, it is useful to consider any or all of the following factors:

  • the type of crime being investigated and the availability of other techniques for the police detection of its commission;
  • whether an average person, with both strengths and weaknesses, in the position of the accused would be induced into the commission of a crime;
  • the persistence and number of attempts made by the police before the accused agreed to committing the offence;
  • the type of inducement used by the police including: deceit, fraud, trickery or reward;
  • the timing of the police conduct, in particular whether the police have instigated the offence or became involved in ongoing criminal activity;
  • whether the police conduct involves an exploitation of human characteristics such as the emotions of compassion, sympathy and friendship;
  • whether the police appear to have exploited a particular vulnerability of a person such as a mental handicap or a substance addiction;
  • the proportionality between the police involvement, as compared to the accused, including an assessment of the degree of harm caused or risked by the police, as compared to the accused, and the commission of any illegal acts by the police themselves;
  • the existence of any threats, implied or express, made to the accused by the police or their agents;
  • whether the police conduct is directed at undermining other constitutional values.

There are no real other investigative techniques available to officers, because anyone pulling over and picking up someone else could just be a friend or family member as opposed to a complete stranger in a ride sharing vehicle.

The acceptance of a ride requires little more than one tap from the driver, ruling out the argument that bylaw officers are persistent or require numerous attempts.

However, there is a promise of a reward for the driver by way of payment for accepting the ride. But that is no different than a drug dealer who is promised a sale of a controlled substance, and who is tricked into selling to an undercover officer. Those techniques have been found, in many circumstances, not to amount to entrapment simply because compensation was offered.

The other factors also do not tend to lean in favour of a finding that this conduct is entrapment. There’s no exploitation, no emotional pleas, officers are not risking harm to themselves or the public, there are no threats, and there is no constitutional value to run an Uber without a business license.

So while the conduct of bylaw officers in Surrey regarding Uber might be distasteful, and might be frustrating, and might be contrary to what the province intended, it is not illegal for the reason that it is entrapment.

Ultimately, these issues with Uber are complex and will require ongoing tweaking through court challenges, disputes between the province and the municipality, and public outcry for support for a service that we want. But as it stands, the argument that this is entrapment, or premature applications for injunctions are not the wisest course of action.

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