UK High Court: Uber-Style Business Model Is Illegal

The U.K. High Court has ruled that Uber’s ride-hailing business model is illegal, TechCrunch reported Monday (Dec. 6), reigniting the debate about London’s view on private vehicle contracts and raising questions about how Uber and ride hailing companies can operate and how much they’ll pay in taxes. 

London’s Private Hire Vehicles (London) Act dates back to 1998, and relates to the conditions for private hire vehicle bookings across the city. London transport regulator TfL is responsible for overseeing companies’ compliance with the law. 

Uber and other ride hailing platforms say they have complied with the city’s regulations but have also argued they aren’t contractually bound by trips booked through its platform. 

A U.K. Supreme Court judgment in February said Uber’s drivers should be considered workers, not contractors. Uber and fellow ride-hailing player FreeNow filed a lawsuit asking to have its model deemed legal in the U.K. 

Uber has argued the acceptance of a booking should be considered a contract between the passenger and the driver and that its only role was to act as a booking agent providing technology services and collecting payment as an agent for the drivers. In a separate Supreme Court case, another London taxi association fought to have FreeNow’s operator license deemed illegal. 

“This court ruling means that all the details of the Supreme Court decision are now clear,” said an Uber spokesperson in a statement related to the ruling. “Every private hire operator in London will be impacted by this decision, and should comply with the Supreme Court verdict in full. 

“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,” the statement says. 

Related: Uber Says 2K Brussels Drivers May Be Sidelined After Court Ruling 

Uber ran into similar legal hot water in Brussels last month, putting the status of about 2,000 drivers in that area in jeopardy after a ruling from the city’s court of appeal extended a 2015 cease-and-desist order.  

Uber’s employment practices have come under fire numerous times before, including through a California bill that aims to reclassify the workers there as full employees with benefits rather than contractors.