Document Private Hire Operator contractual obligations

The Committee noted the implications of recent case law affecting the taxi and private hire sector in respect of the contractual relationship for Private Hire Operators.

Officers outlined the case of Uber London Ltd v Transport for London and others [2021] EWHC 3290 (Admin).  Members were advised that the Divisional Court ruled in order to operatelawfully under the Private Hire Vehicles (London) Act 1998 a licensed operator who accepted a booking from a passenger was required to enter as principal into a contractual obligation with the passenger to provide the journey which was the subject of the booking.  This case required the operator concerned to change its business model to contract directly with passengers rather than classifying itself as an agent.  This helped confirm driver status as workers with statutory protections and also had VAT implications.  Members noted that although this was predominantly a case relating to workers’ rights, it also carried implications for all London based operators in respect of their operating model by placing the operator under an obligation to enter into a contract with the passenger as principal, where a passenger mad a booking, and affected theirresponsibilities under that contractual relationship.

The Committee was informed that 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.  Officers advised that the most recent case was Uber Britannia Limited v Sefton Metropolitan Borough Council & Others judgement on 28 July 2023.  This had resulted in the Court agreeing with Uber and declared that this did cover the rest of England and Wales and applied to all Private Hire Vehicle Operators in England and Wales, regardless of how many vehicles and drivers were available to them.

Members noted that all Private Hire Operators following the judgement were required to comply with the obligation and fulfil their responsibilities under private hirelegislation.  These responsibilities included:

·         a Licensed Private Hire Operator must itself accept bookings from its passengers, rather than anyone else (for example a driver) doing so;

·         a Licensed Private Hire Operator must itself take responsibility for the journeyfrom point A to point B, rather than anyone else (for example a driver) doing so;

·         the booking must be carried out in a licensed Private Hire Vehicle (licensedby the same Council as where the Operator is licensed) (or taxi) driven by a licensed driver (again licensed by the same authority); known as the ‘triple lock’

·         the booking must be carried out for a fare which was either agreed or forwhich an accurate estimate was provided in advance.

It was noted that an operator could still sub-contract a booking to another licensed operator but the contract with the operator who initially accepted the booking remained.  Officers confirmed that all operators were required to comply with the obligation including those without written contracts.

Following the ruling, Officers advised that is was likely to be an expectation that Local Licensing Authorities took steps to ensure that all licensed Private Hire Operators under their jurisdiction were aware and compliant with their obligations.  This could be achieved by the addition of a licence condition to be included in all licenses
issued under section 55.

Officers suggested that the additional condition could state:

“The operator shall enter into a contractual obligation as principal with the person making the private hire booking to provide the journey, which is the subject of the booking, and any such contractual obligation must be consistent with the Local Government (Miscellaneous Provisions) Act 1976.”

However, Members agreed that as leave to appeal had been given to this decision and theGovernment had stated a consultation would be held in early 2024 on the levying of full VAT on private hire operators it would be prudent not to update the Council’s policy at this time but await the outcome which might result in further guidance being issued.

The report was duly noted.