Uber prices could rise by 20% after court ruling

Uber could soon start charging its UK customers VAT, making fares 20% more expensive, after a High Court judgement ruled the taxi service’s business model was unlawful.

Uber sought further legal action following a Supreme Court ruling in February, which declared its drivers were employees and therefore entitled to appropriate benefits, such as sick pay and the minimum wage.

During the Supreme Court case, Lord Leggatt had suggested that Uber’s claim to be simply acting as an “agent” for drivers could violate transport and employment law administered by TfL, though no definitive ruling was made.

A High Court judge ruled that UK private hire taxi operators must make contracts with their customers, rather than the passenger only having a contract with the driver of the vehicle.

The ruling could have far-reaching consequences for the industry as other private hire firms may also have to add VAT to fares. There are more than 1,900 licensed private hire vehicle operators in London.

Image above: App Drivers & Couriers Union protest 

Ruling will ‘transform the London minicab industry’

The case referred to the Private Hire Vehicles (London) Act 1998 which only applies in the capital, but Uber and the App Drivers and Couriers Union, a defendant in the case, both expect the ruling to be followed by licensing authorities across the UK.

An Uber spokesperson said the court ruling would impact all private hire operators, adding:

“Drivers on Uber are guaranteed at least the National Living Wage, holiday pay and a pension plan but we’re not the only player in town. Other operators must also ensure drivers are treated fairly.”

James Farrar, General Secretary of the App Drivers & Couriers Union (ADCU), said:

“Rather than fix its broken business model, Uber was determined to double down on misclassification at the cost of worker rights, passenger safety and the avoidance of VAT.

“Our victory will now make misclassification unlawful, transform the London minicab industry for the better and finally eradicate sector wide worker rights abuses.”

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See also: TfL confirms OneChiswick has withdrawn Cycleway 9 legal challenge

See also: Further Tube strikes likely as TfL plans to cut 600 jobs

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