An attempt by Uber Britannia Limited to force private hire vehicle operators outside of London to contract directly with their customers, which threatened to upend industry structure by effectively abolishing the agency business model, has today been overturned by the Court of Appeal.
The Court discharged a declaration made by Mrs Justice Foster in July 2023 that, in order to operate lawfully under the Local Government (Miscellaneous Provisions) Act 1976 (the “Act”), operators are required to directly contract with passengers to provide the journey the subject of the booking.
Two operators, D.E.L.T.A. Merseyside Limited and Veezu Holdings Limited, appealed on the basis that the Act could not be interpreted as imposing an obligation on operators to so contract. They successfully argued that the Act addresses all contracts within a single provision, section 56, which deems there is a contract with the operator, regardless of which person has directly contracted with the customer. It made no difference that a requirement on operators to contract had been found to apply in London (in R (United Trade Action Group Ltd) v Transport for London [2021] EWHC 3290 (Admin)). The Private Hire Vehicles (London) Act 1998 was drafted in materially different terms.
One difference between an obligation to contract versus a deemed contract is in the potential fiscal consequences. If operators are bound to contract then they would be required to charge their passengers VAT. HMRC had previously launched a public consultation on the tax impact of the High Court’s declaration. It remains to be seen whether this will now be withdrawn.
Jen Coyne acted for the successful Appellant D.E.L.T.A. Merseyside Limited, led by Philip Kolvin KC and instructed by Layla Barke-Jones of Aaron and Partners LLP.
The Court of Appeal’s judgment is available here.