On 28th July 2023 the High Court handed down its decision in the case of Uber Britannia Limited v Sefton Metropolitan Borough Council & Others [2023] EWHC 1975 (KB).
It had been tasked with hearing a claim, brought by Uber Britannia Limited (“Uber”) for clarification on contractual relationships under the Local Government (Miscellaneous Provisions) Act 1976. Uber raised, as outlined in the judgement (at para. 4), the question:
“In order to operate lawfully under Part II Local Government (Miscellaneous Provisions) Act 1976 is a licensed operator who accepts a booking from a passenger required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking?”
Effectively, it asks whether or not contractual relationships between operators, drivers and passengers are governed by the statute. The answer to which could have implications for judicial observations, regarding worker rights, by the Supreme Court (Uber BV v Aslam & Others [2021] UKSC 5).
A prior High Court judgement, initiated by Uber London Limited, found the Private Hire Vehicles (London) Act 1998 does govern so in London (Uber London Limited v Transport for London [2021] EWHC 3290 (Admin)). Consequently, Uber now sought to clarify the position, under similar legislation, outside London.
In these proceedings, Uber asserted the answer to the question must be “yes” and was supported, as intervenors, by Bolt Services UK Limited (“Bolt”) and the App Drivers & Couriers Union (“ADCU”). Veezu Holdings Limited (“Veezu”) and D.E.L.T.A Merseyside Limited (“Delta”), also intervenors, asserted the answer was “no”. Sefton Metropolitan Borough Council (“Sefton”) remained neutral (at para. 5).
Finding in favour of Uber’s view, Mrs Justice Foster DBE ruled (at para. 65):
“…the question posed is to be answered “yes”…”
It followed therefore, in the opinion of the court, that “…[i]nviting and accepting a booking inevitably in my judgement connote the formation of a contract with the passenger….” (at para. 75).
The court referenced, in coming to its conclusion, the construction of the statute and, in particular, the wording of certain key provisions. Attention, amongst others, being drawn to s.56(1) (at para. 65). Comparisons were notably made to the precedent set for London (at para. 70):
“Given the similarities of context and statutory intention between the two Acts…the findings of the [London] case must read over directly to the present situation.”
Additional consideration was applied to interlinking matters of operating models, market competition and, foremost, public safety (at paras. 81-85). The issue of VAT was dismissed as “…irrelevant…” (at para. 85).
Such an interpretation now means licensing authorities, as Transport for London (“TfL”) has in London, should ascertain whether private hire operators lawfully comply with this requirement. Whilst the court notes its decision will render “…certain types of service model …no longer capable of operation under the statute…” (at para. 82), it is unclear how the task of assessing licence holder compliance is to be administered. The approach adopted by TfL may, as yet, prove a starting point.
Moving forward, operators should consider whether it can satisfy this obligation. To do so, it will need to be capable of demonstrating its entrance into a contractual relationship with passengers. Ultimately, this will be a subjective question to be considered, and addressed, by each individual business.
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