VAT LEGAL BATTLE: Delta Taxis and Veezu look to crowdfund £500,000 to take on Uber in Supreme Court

Two of Britain’s largest private hire firms, Delta Taxis and Veezu, are preparing for a major legal clash with ride-hail giants Uber in a bid to prevent a ruling that could see private hire fares rise by at least 20% across England and Wales.

The dispute centres on a legal challenge by Uber, which could force all private hire operators outside London to charge VAT on fares. Delta Taxis and Veezu argue this would make essential journeys unaffordable for many passengers, particularly in rural and low-income areas, while also threatening the viability of small operators and self-employed drivers.

The case will be heard in the Supreme Court in July 2025. This follows years of legal battles, with Uber challenging a long-standing interpretation of a 1976 licensing law. A High Court ruling in July 2023 backed Uber’s position, prompting concerns over significant fare increases. However, in July 2024, Delta Taxis and Veezu won a landmark victory in the Court of Appeal, overturning the decision. Uber is now seeking a final ruling in the Supreme Court.

The legal wrangling stems from a wider issue that began in 2021 when the Supreme Court ruled that Uber drivers were workers, not self-employed. That decision meant Uber had to charge VAT on its fares in London. Uber later sought a broader ruling to apply the same VAT charge nationwide, arguing that all private hire operators should be required to enter into contracts with passengers.

The operators suggest that the case poses a serious threat to driver livelihoods. If fare increases lead to lower passenger demand, thousands of self-employed private hire drivers could be forced to leave the industry. Smaller operators may struggle to survive, creating driver shortages and reducing transport options, particularly in areas where private hire vehicles are the only available service.

In response, Delta Taxis and Veezu have launched the ‘Fighting Fund to Protect Passenger Fares’ campaign, urging industry and public support to help cover legal costs. The firms have already spent over £1 million in legal fees and aim to raise £500,000 through a crowdfunding appeal.

The Government has acknowledged the potential impact of the VAT issue and held a consultation, but no findings have been published. With the Supreme Court now set to decide, the outcome will shape the future of private hire transport in the UK. If Delta Taxis and Veezu are unsuccessful, millions of passengers and thousands of drivers could face the consequences of higher fares and reduced service availability.

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Paul McLaughlin, a Delta Taxis spokesman, said: "This court case could have massive repercussions for PHV firms like us using the traditional agency model, which has been part of British culture for generations. If Uber win, it will add at least 20% to the cost of a private hire taxi fare outside of London and it will unfairly penalise passengers, taxi drivers and every other private hire firm in England and Wales. There are thousands of traditional private hire taxi firms just like us up and down the country, so the impact will be felt far and wide.

"This really is a David vs Goliath moment – in this case we’re representing our entire industry and a Great British institution, as well as the best interests of taxi drivers and passengers. The potential cost of these changes could be devastating for so many people – we simply cannot let Uber win."

Nia Cooper, Chief Legal Officer at Veezu, said: “This case is about protecting the future of the private hire industry and the millions of passengers who rely on it every day. The private hire industry is integral to the transport network in UK and provides essential journeys to passengers, particularly those that are vulnerable. It is often the only form of transport accessible to local communities on a consistent and reliable basis.

“The ruling sought by Uber would impose a VAT burden on the rest of the industry that would create unfair competition across the sector and disregards the long-established structure of private hire firms. If upheld, vulnerable passengers, drivers, and established British PHV businesses will be caught in the crossfire of Uber’s commercial ambition. That is why we are taking a stand to preserve choice, affordability, and the independence of private hire operations across the country.”

Layla Barke Jones, Dispute Resolution Partner at the law firm Aaron & Partners, who represented Delta Taxis in the court cases to date and will represent them in the Supreme Court, said: "The Court of Appeal judgement was a victory for the taxi industry and all those who depend on it, but Uber's decision to make the final appeal means we need to go to the Supreme Court to take up the fight once again. There has always been a shared aim to protect passengers, drivers and taxi firms alike throughout this case.

“We believe it is the most vulnerable people in our communities who depend on these taxis that will be hardest hit, such as those with disabilities, low-income households and older people. It’s down to us to stop that happening.

“There’s a lot at stake whichever way you look, but it’s our hope that we can once again block this move by Uber and protect the operators, drivers and passengers who rely upon traditional taxi firms.”