Uber court battle result which could force ‘SIGNIFICANT RISE’ in PHV fares expected later this year
Updated: Nov 6, 2022
A long-awaited court hearing concluded on Friday as ride-hailing giants Uber, Sefton Council and several private hire vehicle (PHV) operators locked horns in a case which could have serious repercussions for the PHV sector.
If ride-hailing firm Uber are successful, the changes could force contractual arrangements with drivers and make all operators the principal for VAT on fares. This is likely to force the price of journeys up by one fifth.
Uber have long urged thousands of other private hire operators to follow their lead by making changes to their business models. Earlier this year Uber made big changes which included paying VAT on all UK journeys following a similar court case in London.
Transport for London (TfL), the UK’s biggest licensing authority, warned ALL Private Hire (PH) Operators to take ‘immediate action’ to make changes to their terms and conditions and ensure compliance.
If Uber win their court case with Sefton Council, ALL licensing authorities outside of London could then be forced to follow suit.
One legal expert from Aaron & Partners, who are on the side of a group of Liverpool-based PHV firms fighting the changes, says the “significant rise” in fare prices would hit the pockets of “those who can afford it the least”.
Layla Barke-Jones, a Partner in the Dispute Resolution team at the law firm Aaron & Partners, said: “We are pleased to have had the opportunity to represent the views of our clients in the High Court this week, and we hope to have done enough to protect one of the traditional models of the private hire industry.
“Whether it’s parents on the school run, the elderly accessing vital services such as shops and medical appointments, or people with disabilities travelling from A to B, private hire services are simply vital to communities up and down the country.
“If the consequences of the declaration sought by Uber do arise, as warned by Delta and others, it is likely to bring about a significant rise in fares that will hit the pockets of those who can afford it the least. It would also come at a time when people all over the country are already feeling the squeeze of a cost of living crisis, with many other basic necessities starting to become unaffordable.
“Simply put, the magnitude and implications of this case will be vast and wide-reaching. We eagerly await its conclusion.”
However, PHV representatives have argued that change is ‘necessary’ if the industry wanted to ‘prevent exploitation of workers and to curb tax evasion’.
Yaseen Aslam, President of ADCU, said: “This case has arisen because, despite the clear meaning of the letter and spirit of the law, not a single licensing authority in England and Wales has enforced these regulations in the 46 years of the history of this legislation.
“These regulations are necessary for the safety of the travelling public, to prevent exploitation of workers and to curb tax evasion. It should not be the responsibility of unions to ensure the industry is regulated properly but we will continue to do whatever it takes to clean up the industry and make it fit for workers and the travelling public.”
A decision from the court is expected to be handed down before the end of the year.
