Taxi Driver Online

Uber suffers blow as ruling paves way for overhaul of London business model

https://www.ft.com/content/9603fa28-ae2 ... 873d3f03bf

High Court decision will affect all ride-hailing companies in UK capital

Uber suffered a blow to its business model on Monday, when the ride-hailing company lost a High Court case over whether its operations were compatible with transport operating laws in London.

The High Court ruled that it was unlawful for a private hire vehicle (PHV) operator to act as an “agent” between the driver and passenger. This means that Uber and other ride-hailing companies, not individual drivers, will enter into contracts directly with passengers and will be held liable for anything that goes wrong with the service.

Uber claimed it acted as an agent in passenger bookings and that any contract for transportation services was made between drivers and passengers.

The ruling is set to make waves in the private hire industry in London as almost all 1,832 Transport for London (TfL) licensed operators — not just Uber — have used the existing model of operation since regulatory supervision began in 2002.

The decision means that passengers can now only contract with operators and so drivers are in effect working for the operator. It is also likely to put Uber on the hook for paying VAT.

Uber brought the legal action after the Supreme Court in February ruled that Uber drivers were workers and therefore entitled to the minimum wage and holiday pay.

It sought clarity on a point of law after a Supreme Court justice, Lord Justice George Leggatt, suggested that Uber was not only in violation of employment law, but might also be in violation of transport law administered by TfL.

Leggatt had said there was “no factual basis” for Uber’s contention that it acted as an agent for drivers. He suggested the only contractual arrangement compatible with the Private Hire Vehicles (London) Act 1998, was one where Uber “contracts as principal with the passenger to carry out the booking”.

TfL remained neutral during the legal challenge.

Mr Justice Peter Fraser and Lord Justice Stephen Males concluded in Monday’s ruling that “to operate lawfully, an operator must undertake a contractual obligation to passengers”.

Uber said: “This court ruling means that all the details of the Supreme Court decision are now clear. Every private hire operator in London will be impacted by this decision, and should comply with the Supreme Court verdict in full.”

James Farrar, general secretary of the App Drivers and Couriers Union, claimed that the legal action was a “failed collateral attack” on the Supreme Court ruling by Uber. “Rather than fix its broken business model, Uber was determined to double down,” he said.

Anyone see the following piece on TaxiPoint last week which said that the ruling would clarify the issue of plying for hire and how that relates to app bookings?

Not sure if that's another part of the judgement that's not been reported in the above article, or what

This below isn't the full article, which explains the contractual stuff well enough, but it kicks off with the plying for hire angle, but then fails to mention it again in the rest of the article.

PLYING-FOR-HIRE: Taxi industry to learn outcome of key High Court hearing on Monday

https://www.taxi-point.co.uk/post/plyin ... -on-monday

The taxi and private hire industry are set to find out the outcome of a key High Court decision on Monday which could potentially pave the way on ride-hailing ‘plying-for-hire’ and employment law in the sector.

The case, which was heard at the High Court on 23 November before Lord Justice Males and Mr Justice Fraser, has been seen as the first steps in trying to define the practice of ‘plying-for-hire’.

[...]

Along with the issue of ply-for-hire, most notable focusing on the distinction between a digital and street hail, there are also key points focusing on workers' rights.[...]

Uber prices could rise 20% after UK ruling

https://www.bbc.co.uk/news/business-59549789

Uber has said it may soon have to start charging its UK customers VAT at 20%, after a High Court judgement, pushing up the cost of rides.

It comes after a judge ruled that UK private hire taxi operators must make contracts with their customers.

It could have far-reaching consequences for the industry and Uber said it expected others to follow suit.

It follows a separate judgement this year which found Uber drivers should be treated as employees not contractors.

At the time, Lord Justice Leggatt suggested this ruling meant that a private hire operator such as Uber had to enter into a contract with its customers when it accepted a booking, rather than the passenger only having a contract with the driver of the vehicle.

Unlike most private drivers, Uber is a VAT-registered business, so this would oblige the ride-hailing firm to start charging the tax.

Uber went to the High Court seeking to challenge this, but the High Court has now upheld it.

A spokesperson for Uber said: "Every private hire operator in London will be impacted by this decision, and should comply with the Supreme Court verdict in full."

A spokesperson for Transport for London which regulates private hire operators in London said it "notes" the judgement.

"All operators will need to carefully consider the court's judgment and take steps to ensure that they comply with it, including considering whether any changes to their way of working are required," he added.

'Transform the minicab industry'

The case referred to the Private Hire Vehicles (London) Act 1998 which only applies in the capital, but Uber and the App Drivers and Couriers Union, which was a defendant in the case, both expect the ruling to be followed by licencing authorities across the UK.

James Farrar, general secretary of the App Drivers & Couriers Union (ADCU), said: "Rather than fix its broken business model, Uber was determined to double down on misclassification at the cost of worker rights, passenger safety and the avoidance of VAT.

"Our victory will now make misclassification unlawful, transform the London minicab industry for the better and finally eradicate sector wide worker rights abuses."

Ooft

Transport for London
London Taxi and Private Hire

Notice 19/21 - Private hire operators’ contracts with passengers

The High Court has today (Monday 6 December) given judgment in a case about the
role of London private hire vehicle (PHV) operators and the contracts that they enter
into with passengers.

The case concerned the Supreme Court’s judgment of 19 February 2021 in Uber BV
v. Aslam and the High Court has now confirmed that:

“.....in order to operate lawfully under the Private Hire Vehicles (London) Act
1998 a licensed operator who accepts a booking from a passenger is required
to enter as principal into a contractual obligation with the passenger to provide
the journey which is the subject of the booking.”

All London PHV operators will need to carefully consider the High Court’s judgment
and take steps to ensure that they comply with it, including considering whether any
changes to their way of working are required.

Transport for London will be considering the written terms of those applying for or
renewing a licence and looking at operators’ terms during the period of the licence.

The Court dismissed the United Trade Action Group’s (UTAG) Judicial Review claim
on TfL’s decision to renew FREE NOW’s operator’s licence and rejected UTAG’s
claim that PHVs made available via the FREE NOW app were plying for hire.

The judgment will be published on the Courts and Tribunals Judiciary website or can
be obtained upon request by emailing the Judicial Office (press.enquiries@judiciary.uk).


Graham Robinson
General Manager
Taxi and Private Hire
Transport for London

6 December 2021

I'm not so sure about that.

Most of the operators in London, as elsewhere, don't take a % off every job.

Many take a % off account work, but not cash/card work.

_________________
IDFIMH

I bet Uber rue the day they pi**ed off that fella.

_________________
IDFIMH

Not the way I read the situation.

If plying was a major issue in this matter then the London cab trade would have been represented big time during the hearing, which they weren't, and I very much doubt TfL would have taken the neutral stance they did.

_________________
IDFIMH

The VAT position is an interesting one. Because all our drivers are employees we have to account for VAT on every fare that is taken. This puts us at a huge disadvantage to the one man bands who are never going to reach the VAT threshold. The same disadvantage exists between us taking 8 passengers in an 8 passenger vehicle and someone taking 8 passengers in a 9 passenger vehicle or for that matter taking 1 passenger in a 9 passenger vehicle.
In my opinion all passenger transport should be treated the same for VAT but I am not stupid enough to think that 8 passengers and under would be zero rated, it would be more likely that 9 passengers and above would end up being standard rated.
Strangely, VAT stands for value added tax. How exactly is there any added value in taking a taxi or private hire journey?

_________________
Grandad,

You mean as regards the VAT issue?

Can't see how the difference between a fixed fee and % based model has any bearing on any aspect of the case

As regards the plying for hire issue, UTAG wanted the court to quash TfL's decison to grant Free Now an operator's licence, on the basis that Free Now encouraged drivers to ply for hire. UTAG argued that the Reading v Ali case should be distinguished because of the different contractual terms.

However, the court stated that the contractual terms were irrelevant to the plying for hire issue, and the case was indistinguishable from Reading v Ali. In essence, therefore, the app doesn't amount to 'exhibiting' the cars to the public, thus they're not plying for hire.

This is headlining on Kent Live and at least a couple of other Reach plc website - Wales Live and Surrey Live. They often share these national stories across the Reach plc online titles.

But it certainly makes it sound like taxi and PH fares might go up 20% across the UK because of the VAT thing. This isn't the whole piece:

Inclined to agree with that, but don't really think the court actually ruled anything about *UK* operators rather than just London, and the rest of the article doesn't explain precisely how it will impact fares 'across the UK'.

I think there's a good argument to say that it will, but it's not explained in the piece. But, for example, it will be interesting to see how HMRC views the judgement in terms of the wider UK trades.

And, for example, if the High Court is saying that whoever takes the booking is contracting as principal with the passenger, then why shouldn't it apply to an HC circuit in Manchester, say? Elsewhere, the Kent Live article says this:


Of course, yesterday's ruling was specifically about TfL's private hire operator conditions, but the reasoning above is surely of relevance to the wider UK industry, both HC and PH?