Taxi | Supreme Court Judgement | D.E.L.T.A. Merseyside Ltd, Veezu Holdings Ltd and Uber Britannia Ltd
2025
In July 2024, the Court of Appeal unanimously discharged the High Court declaration confirming that PHV operators are not required to contract with passengers for the provision of journeys, and the agency model, which avoided a VAT obligation for the Operator, is lawful.
There followed an Appeal by Uber to the Supreme Court.
Following a hearing on the 2nd July, the Supreme Court have this morning issued their Judgement.
The Supreme Court unanimously rejected Uber’s Appeal preferring the learned arguments of Philip Kolvin KC, for the first respondent, and Gerald Gouriet KC, for the second respondents.
The background of the Appeal – As summarised by the Supreme Court
“This is an appeal about the correct interpretation of the statutory regime regulating the provision of private hire vehicles (“PHVs”) outside of London and Plymouth. PHVs, as distinct from traditional taxis, cannot ply for hire on the streets but are booked in advance through an “operator”. Uber (one of the parties to this appeal though Uber Britannia Limited, or “UBL”) is a well known PHV operator.
Historically, the PHV trade has operated in several different ways: the operator might contract directly with the customer as principal, or do so only as an agent for the driver, or the operator may merely arrange for the driver to attend the customer and leave the contract of hire for them to arrange among themselves.
However, in another case, the Divisional Court interpretated the separate (though in some ways similar) regulatory regime for London as requiring operators not to accept bookings by any means other than by entering into a contract for hire as principal.
On the back of that, UBL successfully requested a declaration from the High Court to the effect that the separate non-London regulatory regime (under the Act) is to be interpreted as imposing that same constraint on operators. The Court of Appeal disagreed.”
The Supreme Court unanimously dismissed the appeal ruling that nothing in the Act expressly imposes the constraint contended for by Uber. Nor can it be said to be inherent or implied in the concept of accepting a booking, or necessitated by the regulatory purpose of the Act.
Why is it important?
If Uber had won, the entire private hire industry outside of London would have been forced into a unitary contracting model and forced customers to pay VAT on journeys, an extra charge undermining the long-standing cost structure of the industry and potentially threatening the viability of swathes of Operators. In addition to higher costs for passengers (who’s only form of transport may be a PHV) the knock-on effect could have been the potential reduction in PHV availability and a reduction in competition in the sector leading, in turn, to yet higher costs for passengers and less choice. The judgment would also make the ‘real world liability’ of operators imposed under the legislation, obsolete.