Cap on Driver Licences, Zero-Emission Exemption

Summary#

This item deals with a court case that Uber started against the City of Toronto. The dispute is about City Council’s October 2023 decision to cap the number of municipal driver licences for taxis and app-based ride services (called private transportation companies, or PTCs) at the level that existed on October 12, 2023, except for owners of zero‑emission vehicles (ZEVs). The goal of the cap is to manage greenhouse gas emissions while the City designs a fuller plan for the vehicle‑for‑hire industry.

Key points:

• Council’s October motion keeps the total number of taxi, limo, and PTC driver licences at or below the number that existed on Oct 12, 2023, until late 2024, except for drivers who own (not lease) ZEVs.
• The City paused new VFH/PTC driver licensing on Oct 13, 2023, then resumed on Nov 13, 2023, issuing licences only up to the Oct 12 cap.
• Uber sued on Dec 4, 2023 to ask a court to cancel the bylaw provisions that enacted the cap, claiming lack of public notice, bad faith, and discrimination against Uber.
• This agenda item provided confidential legal advice and sought instructions for how the City should respond to Uber’s case.
• Timing: staff are to report back with a comprehensive framework (including on emissions, congestion, and transit impacts) by the fourth quarter of 2024.

What it means for you#

• General public and riders:

  • No direct change from this item. The existing cap on VFH/PTC driver licences stays in place unless a court orders otherwise.
  • If the court cancels the cap, the number of new drivers could increase. If the City wins, the cap would likely continue until the City reports back in late 2024.

• Current taxi, limo, and PTC drivers (municipal VFH/PTC driver licence holders):

  • Day-to-day licensing continues. The City is issuing licences only up to the number that existed on Oct 12, 2023.
  • Renewals and replacement of drivers within the cap can proceed. The cap limits growth above the Oct 12 total.

• Prospective drivers:

  • Getting a new municipal driver licence is harder while the cap is in place. New licences are issued only if the total stays at or below the Oct 12, 2023 number.
  • Exception: if you own (not lease) a zero‑emission vehicle, you are not counted toward the cap.

• Ride-hail and taxi companies:

  • Hiring new drivers above the cap is restricted. This could limit fleet growth until late 2024, unless the court cancels the cap.

• Note on this agenda item:

  • This Council decision mainly concerns litigation strategy and does not create new public-facing rules beyond the existing cap.

Expenses#

No publicly available information.

• The report says financial implications are contained in a confidential attachment.
• Legal and administrative costs are likely, but no estimate is provided in the public material.

Proponents' View#

• The cap appears intended to manage greenhouse gas emissions from the vehicle‑for‑hire industry while the City builds a fuller plan.
• It could encourage a shift to cleaner vehicles by exempting owned ZEVs from the cap.
• Holding the number of licences steady may help the City study and address congestion and transit impacts before allowing industry growth.
• A time‑limited cap (until a report in Q4 2024) could be seen as a cautious, interim step rather than a permanent change.

Opponents' View#

• Uber’s court filing claims the City failed to give required public notice before passing the cap.
• Uber alleges the decision was arbitrary or made in bad faith, and that its effect unlawfully discriminates against Uber within the PTC licensing system.
• A possible concern is reduced opportunities for new drivers who do not own ZEVs while the cap is in place.
• It is unclear how the cap interacts with normal industry turnover and demand; the public materials do not provide data on effects on wait times, pricing, or service levels.