A B.C. Supreme Court justice has ordered the City of Surrey to stop ticketing unlicensed Uber drivers working within its borders, handing a victory to the ride-hailing company and prompting the mayor to give up a months-long fight against the business.

Justice Veronica Jackson read her decision by conference call in court Friday morning. She found Uber would face a loss of revenue if drivers were regularly fined, in part because the fines would deter drivers from working in Surrey.

She also said city bylaw officers had been unfairly ticketing Uber drivers for not having a municipal business licence, while the city refused to issue any such licences.

"Surrey has been trying to ride two horses at once," said Jackson.

A ticket issued to an Uber driver in Surrey, B.C. (Lien Yeung/CBC)

Uber applied for an injunction against the municipality last week. The company said the city's plan to hit ride-sharing drivers with daily $500 fines was illegal under the Motor Vehicle Act, and wanted a court order to stop the practice.

Surrey Mayor Doug McCallum promised to fine Uber drivers daily after the service launched in Metro Vancouver last month. McCallum, a longstanding ally of the taxi industry, said Uber was operating illegally within his city.

McCallum conceded in a statement shortly after Jackson read her ruling aloud.

"Time to move on," the mayor wrote.

The Passenger Transportation Board (PTB) approved Uber and other ride-hailing companies to operate in the Lower Mainland, including Surrey, on Jan. 23, but McCallum had said the ride-hailing companies have an "unfair advantage" over the taxi industry.

The province has said local governments can enact rules and unique fees around drop-off and parking in granting local licences, but cannot deny licences to companies outright.

Metro Vancouver mayors have endorsed plans for a region-wide business licence for ride-hailing companies that would create a single set of requirements for companies like Uber and Lyft.

McCallum said in his statement Friday the city will now co-operate with the Mayors' Council as it develops the licence, "to ensure a level playing field between ride-hailing and taxis."

Surrey Mayor Doug McCallum in August 2019. (Ben Nelms/CBC)

Michael van Hemmen, Uber's head of western Canada operations, called Friday "a good day."

"We've seen positive movement from Surrey and we're pleased the mayor has signaled that the City of Surrey will be looking to participate in the inter-municipal business licence that the region is working on."

The department head added any existing tickets issued to Uber drivers "should be resolved without any difficulties" in light of Friday's ruling.

Michael van Hemmen, head of western Canada Operations, speaks to reporters outside B.C. Supreme Court in Vancouver on Feb. 7, 2020. (Yvette Brend/CBC)

On Thursday, the Vancouver Taxi Association lost its legal bid to block ride-hailing operators in Metro Vancouver. The association, which includes nine Metro Vancouver cab companies, asked the court for an injunction to suspend Lyft and Uber's apps until court heard a judicial review of the PTB's company approvals.

Justice Jackson, who presided over both court cases this week, dismissed the association's application. She described the taxi association's evidence of revenue decline blamed on ride-hailing competition as "scant at best."

The PTB announced Friday two more ride-hailing companies are now approved for operations in B.C. Apt Rides and Kabu Ride are both permitted to operate in the Lower Mainland and in Whistler, while Kabu will extend to the Capital Regional District, the Okanagan, the Kootenays, the Cariboo, "B.C. North Central" and parts of Vancouver Island.