ALL THINGS LICENSING
Article by Mike Smith, Senior Specialist for Licensing and Community Safety at Guildford Borough Council and Vice-Chair of the Institute of Licensing South East Region.
Please note that this article represents my own views which are not presented as the views of the Institute of Licensing or Guildford BC.
ANOTHER MONTH AND ANOTHER HOT TOPIC
Off the back of discussing the Casey Report in July and the call for evidence into licensing and standards in the taxi and private hire vehicles sectors and consultation on self-driving vehicles in August’s editions of PHTM, at the end of July the Supreme Court handed down the important judgement in D.E.L.T.A. Merseyside Limited and another v Uber Britannia Limited (UBL).
In doing so, the Supreme Court has upheld the right of operators, drivers and passengers to contract as they wish for the provision of private hire services.
There could have been a number of implications around contract law, operating models, licensing checks and crucially VAT as a result of this judgement, however the take home message following the ruling is that the status quo is maintained.
Reminder – what was the case about?
The background was that since long before the Local Government (Miscellaneous Provisions) Act 1976, there were several different contracting models.
These included: l operators contracting as principal with passengers; l operators contracting as agent for drivers;
l operators running an intermediary service, finding drivers with whom passengers contract;
l operators sub-contracting to other operators.
From 1976, the regulation of the PHV trade by local councils was introduced for the first time and all these
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models continued more or less without question until app-based private hire services came along.
App-based private hire companies, and particularly Uber, have been very successful in changing the market with this success leading to a number of challenges, particularly around workers rights which succeeded in the Employment Tribunal.
In the further case of Uber London Ltd v Transport for London & others [2021] EWHC 3290 (Admin), the Divisional Court ruled that in order to operate lawfully under the Private Hire Vehicles (London) Act 1998 (the legislation governing private hire in London) 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.
This case was part of a series of litigation which required the operator concerned to change its business model to contract directly with passengers rather than classifying itself as an agent. This has helped confirm the operator’s driver status as workers with statutory protections and has also had VAT implications.
This has had implications for all London-based operators in respect of their operating model and being placed under an obligation for the operator to enter into a contract with the passenger as principal, where a passenger makes a booking, and their responsibilities under that contractual relationship.
Following the above, Uber decided to change its model nationwide, and not just in London, and in order to level the competitive playing field nationally, Uber sought a declaration at the High Court to the one imposed on it for London to cover the rest of England and Wales where operators are governed by the Local Government (Miscellaneous Provisions) Act 1976. This was opposed by the Veezu Group, Delta Merseyside and a coalition of operators represented by these.
Initially in July 2023 the High Court ruled in Uber’s favour but was rejected by the Court of Appeal. Uber then took the case to the Supreme Court, which has now ruled unanimously and conclusively that: operators remain free to contract, or indeed not to contract, as they wish.
SEPTEMBER 2025 PHTM
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