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Divisional Court clarifies rules relating to private hire vehicle operators in London

06.12.2021

The Divisional Court today handed down judgment in Uber London Limited v TfL and others. Uber brought a claim for a declaration as to the true meaning of the provisions of the Private Hire Vehicles (London) Act 1998, the Act which regulates private hire vehicles (or 'minicabs') in London, and in particular whether the provisions of the Act required a licensed 'operator' (such as Uber) to enter into a contract as principal with a passenger for the journey that passenger books.

The Supreme Court had indicated, albeit obiter, and in a case about whether Uber drivers were 'workers' (Uber BV v Aslam [2021] UKSC 5) that the model adopted by Uber and other operators, by which they did not contract direct with the passenger but instead essentially acted as agent for the many drivers (who would themselves then contract with the passenger for each such journey), was not in line with the legislative scheme. Uber sought, by way of this Part 8 Claim, clarification as to the law.

The Divisional Court (Males LJ and Fraser J) held that the provisions of the Act clearly contemplated that operators and passengers would enter into contracts as between themselves as principals; and indeed that the Act, properly understood, requires that to happen – see paragraph 30 – not least because requiring such contractual relations between operator and passenger furthers the statutory purpose of the legislation which is public safety.

The Court thus declared that:

"In order to operate lawfully under the Private Hire Vehicles (London) Act 1998 a licensed operator who accepts a booking from a passenger is required to enter as principal into a contractual obligation with the passenger to provide the journey which is the subject of the booking."

The claim was held together with a judicial review claim made by United Trade Action Group against TfL, attacking the latter's decision to grant an operator licence to Transopco, who trade as Free Now, which turned on whether Free Now's app-based operation meant that minicabs using its app were 'plying for hire', an activity reserved to hackney carriages. The JR failed to persuade the court that the grant of a licence should be quashed: the decision in Reading BC v Ali as to whether app-based operations involved minicabs 'plying for hire' was followed, but permission to appeal to the Court of Appeal was granted.

Ranjit Bhose QC and Josef Cannon acted for Uber London Limited in the Part 8 Claim, instructed by Charles Brasted of Hogan Lovells International LLP.

You can view the judgement here.