Uber and other London taxi operators must carry out bookings, High Court rules

Taxi operators in London have an obligation to passengers to carry out bookings and are not mere agents for drivers, judges have made clear in a High Court ruling.

The judgment, given on Monday, means that ride-hailing firms including Uber and Free Now, who were parties to the court case, will have to change their current business model in the capital.

It follows a Supreme Court ruling earlier this year, in which a panel of justices concluded that Uber drivers should be defined as workers rather than contractors.

In that ruling, delivered in February, Lord Justice Leggatt suggested that, in order to comply with the law regulating private-hire vehicles, Uber would have to accept a contractual obligation to a passenger to carry out a booking.

However, the judge did not make any ruling on that aspect of the case, so Uber London – supported by Free Now – went to the High Court seeking a declaration that an operator who accepts a booking is not required to enter into such a contractual obligation.

At a hearing in November, lawyers for Uber London told the court the ride-hailing firm would change its operating model if the court ruled against it, in order to comply with the law.

The App Drivers and Couriers Union (ADCU) opposed Uber London’s case and argued that the firm was trying to go behind the Supreme Court’s ruling.

In a ruling on Monday, Lord Justice Males and Mr Justice Fraser concluded that private-hire operators do owe such an obligation to passengers under the terms of the Private Hire Vehicles (London) Act 1998.

The judges said: “In our judgment, the 1998 Act plainly contemplates that acceptance of a booking by the operator will create a contract between the operator and the passenger and, furthermore, that this will be a contract by which the operator undertakes any obligation as principal to provide the transportation service – that is to say to provide a vehicle and driver to convey the passenger to the agreed destination.”

They said the act does require there to be a contractual obligation between operators and passengers once a booking is made, adding: “To interpret the act in this way gives effect to the statutory purpose of ensuring public safety.

“As Mr (Jason) Galbraith-Marten (QC, for the ADCU) pointed out, passengers booking journeys on these apps may be vulnerable; the journeys may be booked late at night; the consequences of a driver failing to turn up may be serious.

“If the passenger’s only contractual relationship is with a driver he or she has never heard of and who is in any event unlikely to be worth claiming against, any claim is likely to be practically worthless.”

The judges said that, in light of the ruling, Uber and Free Now will have to amend their operating model.

They also said Transport for London (TfL) would have to reconsider its current practice of not reviewing the contractual terms of a private-hire taxi operator when considering whether to grant a licence.

The judges refused an application by the United Trade Action Group (UTAG), which represents black-cab drivers, for Free Now’s licence to be revoked.

However, they said TfL would have to consider Free Now’s user terms, which appear to exclude any liability to the passenger.

An Uber spokesman 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.

“Drivers on Uber are guaranteed at least the national living wage, holiday pay and a pension plan, but we’re not the only player in town. Other operators must also ensure drivers are treated fairly.”

James Farrar, ADCU general secretary and one of the claimants in the Supreme Court case, said: “This was a failed collateral attack on the Supreme Court ruling by Uber who sought to break any link between its obligation to obey employment law and its licence to operate in London.

“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.

“Because TfL declared neutrality before the court, the ADCU had no choice but to step in and use our own meagre resources to defend this case.

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

A TfL spokeswoman said: “We note the High Court’s judgment that London private hire operators are required to enter into a contract with passengers.

“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.

“We also note that the court dismissed an argument that private hire vehicles made available via the Free Now app unlawfully ply for hire.”