On 28th July 2023 the High Court delivered its judgement in the matter of Uber Britannia Limited v Sefton Metropolitan Borough Council & Others [2023] EWHC 1975 (KB).

The court was asked to determine whether contractual relationships between operators, drivers and passengers are governed by the Local Government (Miscellaneous Provisions) Act 1976. Mrs Justice Foster DBE, in giving judgement, concluded it does and that private hire operators enter, as principal, into contractual obligations with passengers to provide journeys.   In doing so, following the precedent set in London, it places a regulatory duty on licensing authorities to ensure licence-holder compliance with this requirement.

Following wide publicity surrounding this matter, Travis Morley Law has been contacted by private hire operators with real concerns about the effect and application of this decision. We, as expert legal consultants on Taxi Licensing Law and Contract Law, will seek to answer some of those questions.

Who does the decision effect?

First, and foremost, those private hire operators licensed in England and Wales (under the Local Government (Miscellaneous Provisions) Act 1976).  It does not include Plymouth or London.

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Okay, so what did the judgement say?

It found, affirming a similar High Court judgement for London (Uber London Limited v Transport for London & Others [2021] UKSC 5), that:

In order to operate lawfully under Part II Local Government (Miscellaneous Provisions) Act 1976…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 court, in concluding so and favouring Uber’s interpretation, considered various competing factors.  This included legislative wording, market competition, operating models, VAT complications and public safety. 

What are the repercussions?

It is unclear, at this stage, how licensing authorities will approach this judgement.  Undoubtedly, as the decision stands, it will require private hire operators to ensure they can demonstrably show the existence of certain contractual obligations between themselves and passengers.  A failure to do so, potentially, could result in enforcement action.

Is there anything I can do?

The diverse nature of the private hire trade means that each operator runs their business in different and unique ways.

Accordingly, with a view to due diligence, it is strongly recommended that professional legal advice be sought. Only following an initial review of the private hire operator, driver and passenger contractual position will it be possible to advise on any regulatory risk.

If you want to check how you are affected by this decision, please contact Travis Morley Law now on 01159 724928 or email [email protected] or visit www.travismorley.com.

*Travis Morley Associates Limited accepts no liability for any action or inaction taken based on this article by any individual or party and where such is taken it is done so at their own risk.  We would always recommend, prior to taking any steps, seeking professional legal advice.

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