After the UK verdict, Uber’s pricing could go up by 20%

After the UK verdict, Uber’s pricing could go up by 20%

Private hire taxi companies in the United Kingdom must now enter into contracts with their consumers, according to a recent court decision

Many other private-hire companies may also be forced to apply VAT as a result.

An earlier decision from this year determined that Uber drivers should be considered as employees, not independent contractors.

If a private-hire service like Uber accepts an order, it must enter into a contract with the consumer rather than just the driver, according to Lord Justice Leggatt at the time of this judgement.
Uber is a VAT-registered business, unlike most individual drivers, therefore this means that the ride-hailing giant must begin charging the tax.
Uber took its case to the High Court, but it was upheld there as well.

An Uber spokeswoman said, "Every private hire operator in London will be impacted by this judgement, and should comply with the Supreme Court verdict in full,"

In a statement, a representative for the London transport authority, Transport for London, said it "notes" the decision.

It is imperative that all operators review the court's decision and take steps to ensure that they comply with it, including determining if any adjustments to their working practises are necessary," he said.
In this instance, the law at issue was the Private Hire Vehicles (London) Act of 1998, which only applies in London. Nevertheless, both Uber and the App Drivers and Couriers Union, a defendant in the case, expect the verdict to be followed by licencing authorities throughout the UK.

"Rather than change its failing business model, Uber was determined to double down on misclassification at the cost of worker rights, customer safety and VAT avoidance," said James Farrar, general secretary of the App Drivers and Couriers Union (ADCU).

Now that we've won, misclassification will be illegal, the London minicab industry will be transformed for the better, and workers' rights in the sector will finally be protected."

x