In a recent court case, the High Court has ruled that the ‘Uber’ app which has recently taken the country by storm is not unlawful.
Uber uses GPS technology to locate your nearest driver who then collects you and drives you to your destination. Payment is charged to a pre-registered credit or debit card meaning there is no need for cash to change hands. Fares are generally cheaper with pick ups being quicker and more convenient, meaning that Uber has become an incredibly popular alternative to ordinary black cabs.
Transport for London (TfL) brought the case after immense pressure from cab drivers and claimed that the app constituted a taxi meter, which private hire vehicles are prohibited from using. The app uses GPS technology to locate nearby drivers and sends information to external servers to calculate the distance travelled and the corresponding fare.
TfL made the case that the app is performing the same job as a taxi meter by calculating the fare based on the time taken and distance travelled and that the statutory prohibition is therefore being circumvented.
Unfortunately for TfL, Lord Justice Ouseley didn’t agree. He ruled that the smartphone using the app did not constitute a device used for calculating fares, to which the prohibition applies, even if it was essential to the calculation of the fare. He therefore considered the app to be lawful, and Uber is under no obligation to comply with the regulations afforded to black cab drivers.
While this appears to be a victory for Uber, it may be short-lived as not only is the decision being appealed, but the implementation of regulatory changes to private hire vehicles are also being considered.
Some changes currently being proposed include a minimum wait time of five minutes between request and pick up, a ban on the sharing of rides and the requirement that the fare be confirmed before accepting a booking. All of these changes have the potential to drastically alter the way Uber operates.
The outcome of this case may change when the Supreme Court hears TfL’s appeal but, for now, what are your thoughts on the current decision? Do you question the High Court’s reasoning and consider the app to serve the same purpose as a meter? Or do you think that the cab drivers are simply reluctant to adapt to their new competition and are seeking to maintain their monopoly on the market?
If you would like advice on the regulation of a market or about the competitive effects of entering a new market, feel free to contact our Corporate and Commercial Department on 01245 584515 or [email protected]