Court of Appeal ruling against Uber allows continuation of ‘well established processes already in place’ says Veezu

The Court of Appeal ruling against Uber will allow the continuation of ‘well established processes already in place’ says Veezu.

The Court of Appeal has ruled in favour of Veezu and Delta Merseyside Ltd, providing a significant win for the private hire sector. This decision is said to alleviate concerns within the private hire sector of rising fares and potential service reductions.

Nia Cooper, Chief Legal Officer at Veezu, expressed gratitude towards the court for their favourable judgment. Cooper highlighted the essential role of the private hire industry within the transport network, noting its critical support for self-employed drivers and local operators.

The landmark decision, handed down on 15 July, marked a victory for Veezu Holdings Ltd and Delta Merseyside Ltd, who successfully appealed against the High Court's interpretation, which was opposed by Uber Britannia Ltd.

The crux of the case centred on the interpretation of Part II of the Local Government (Miscellaneous Provisions) Act 1976, a pivotal piece of legislation governing private hire vehicles outside London. Previously, the High Court had ruled that operators must enter into contracts as principals with customers making bookings. Veezu and Delta challenged this interpretation, arguing that their business models, which act as intermediaries connecting passengers with licensed drivers, did not necessitate such contractual obligations.

The original ruling had threatened to increase costs and limit service availability, and was said to pose a risk to the livelihoods of drivers and the operational stability of private hire companies. Cooper pointed out that this could have negatively impacted local communities reliant on private hire services for consistent and reliable transportation.

One of the significant implications of the ruling is the impact on VAT liability. Under the overturned High Court ruling, operators would have been required to contract with passengers at the booking stage, thereby assuming the VAT liability on fares. However, the Court of Appeal's decision shifts this liability back to the drivers, who are now responsible for VAT.

For Veezu, Delta and other private hire operators outside of London, the ruling enables them to continue their current business models without the need for operational changes. Had the ruling favoured Uber, the consequences would have been far-reaching. Private hire fares across the country could have seen a 20% increase due to the addition of VAT, significantly impacting the affordability of these services for passengers.

Cooper said: "We are grateful to the Court of Appeal for hearing the case and finding in our favour. The Private Hire industry is integral to the transport network and provides an income for self-employed driver partners and local private hire operators. It is often the only form of transport accessible to local communities on a consistent and reliable basis.

“The original ruling had the potential to drive up fares, reduce availability of services and put driver partners and operators out of business. The ruling by the Court of Appeal removes the burden on Local Licensing Authorities to invest in unnecessary policy changes and continue with the well established processes already in place.”