After losing at Supreme Court of Canada, Uber Canada moves to Canada from the Netherlands
As a result of losing its case before the Supreme Court of Canada in a decision released June 26, 2020, Uber Canada has decided to move its Canadian head office to Canada from the Netherlands, where it has been located for years as part of a complicated web of entities and transactions which have allowed it to avoid taxes and lawsuits.
The fact that anyone who wanted to bring a lawsuit against Uber would need to do it in the Netherlands has served as a significant deterrant to any individual or organization considering legal action.
“This is long overdue,” says Marc Andre Way, president of the Canadian Taxi Association. “Canada needs to pay attention to Big Tech and the tactics they are using to gain advantage. Politicians must not now lose sight of Uber’s newest initiative, which is to change our employment laws to favour their business model. All levels of government must work to avoid being influenced by the tactics used by their lobbyists; hopefully, our politicians won’t be fooled twice.”
Bloomberg News reports that Uber’s Canadian ride-hailing and food-delivery business will shift from being based in the Netherlands to Canada effective July 1st, 2021. The move will require Uber to collect sales tax that will be remitted to the government.
Current Uber fees will be subject to GST, PST and HST and those using its Eats Pass subscription program might also see a sales tax introduced, according to Bloomberg. At time of posting, Uber Canada has not returned calls to Road Warrior News nor issued a media release.
As detailed in this summary , the challenge before Canada’s Supreme Court arose when UberEATS driver David Heller attempted to bring a class action lawsuit on behalf of Uber drivers in Ontario against Uber for allegedly violating the Employment Standards Act (ESA). To become a driver for UberEATS, Heller was required to accept the terms of Uber’s standard form services agreement, which obligated him to resolve any dispute with Uber through mediation and arbitration under the International Chamber of Commerce Rules of Arbitration. The contract was governed by Dutch law, with the Hague as the seat of arbitration. However, the mediation and arbitration process under the ICC Rules requires up-front administrative and filing fees of US$14,500, plus legal fees and other costs of participation. Mr. Heller was making about $500 per week and these costs represented most of his income.
Uber brought a motion to stay Mr. Heller’s proposed class action in favour of arbitration in the Netherlands under the service agreement. The motion judge held that the Ontario Superiour Court did not have the authority to decide whether the arbitration agreement was valid and stayed the proceeding in favour of arbitration in the Netherlands; however, the Ontario Court of Appeal set aside the order of the motion judge, determining that the arbitration agreement was unconscionable because of the inequality of bargaining power between the parties and the improvident cost of arbitration.
Uber appealed the decision. The Supreme Court agreed with the Court of Appeal that the arbitration agreement was a classic case of unconscionability and dismissed Uber’s appeal.
Updated with corrected date June 30, 2021
