UK Taxi Firms Launch Crowdfunding for Legal Battle Against Uber Over VAT Implications
Two taxi companies are seeking funds to challenge Uber’s approach to VAT, which could significantly increase fares for private hire journeys outside London.
Two British taxi companies, Delta Taxis from Liverpool and Veezu from Cardiff, have initiated a crowdfunding campaign to support their ongoing legal battle against Uber.
The case, which will be brought before the Supreme Court in July, centers on whether value-added tax (VAT) should be applicable to private hire vehicle (PHV) operators outside of London.
Uber contends that a ruling in its favor would create a level playing field for private hire companies across the UK.
The taxi firms are aiming to raise £500,000 to continue their challenge, as legal costs have already exceeded £1 million due to previous court proceedings in 2022 and 2023, along with an anticipated Court of Appeal case in 2024.
Previously, following a 2021 decision regarding fares in London, Uber was required to incorporate VAT into rides booked through its app.
This requirement arose from legal actions taken by the company against Sefton Council, where Delta Taxis is based, concerning the terms set for operators.
Typically, PHV companies categorize their drivers as independent, self-employed contractors, exempting them from VAT obligations.
However, the taxi industry argues that the changes proposed by Uber could result in fare increases of at least 20% for private hire journeys outside London, directly impacting passengers.
Data provided by Veezu indicates that a substantial portion of minicab journeys—43%—serve medical, work, or educational purposes, rather than leisure activities.
The taxi firms have articulated concerns that the regulatory changes could threaten the viability of many small operators, potentially displacing around 25,000 self-employed drivers and leaving passengers with limited or no options for transportation.
Paul McLaughlin from Delta Taxis characterized the situation as a significant challenge for traditional PHV firms, emphasizing the potential ramifications on their business model which has been a fixture of British culture for generations.
Nia Cooper, chief legal officer at Veezu, underscored the critical role of the private hire industry within the UK’s transport network, stating that it delivers essential journeys for many passengers, including those who are vulnerable.
An Uber spokesperson stated that the company advocates for regulatory consistency across the UK to ensure that all operators are subject to the same operational framework.
The case, which will be brought before the Supreme Court in July, centers on whether value-added tax (VAT) should be applicable to private hire vehicle (PHV) operators outside of London.
Uber contends that a ruling in its favor would create a level playing field for private hire companies across the UK.
The taxi firms are aiming to raise £500,000 to continue their challenge, as legal costs have already exceeded £1 million due to previous court proceedings in 2022 and 2023, along with an anticipated Court of Appeal case in 2024.
Previously, following a 2021 decision regarding fares in London, Uber was required to incorporate VAT into rides booked through its app.
This requirement arose from legal actions taken by the company against Sefton Council, where Delta Taxis is based, concerning the terms set for operators.
Typically, PHV companies categorize their drivers as independent, self-employed contractors, exempting them from VAT obligations.
However, the taxi industry argues that the changes proposed by Uber could result in fare increases of at least 20% for private hire journeys outside London, directly impacting passengers.
Data provided by Veezu indicates that a substantial portion of minicab journeys—43%—serve medical, work, or educational purposes, rather than leisure activities.
The taxi firms have articulated concerns that the regulatory changes could threaten the viability of many small operators, potentially displacing around 25,000 self-employed drivers and leaving passengers with limited or no options for transportation.
Paul McLaughlin from Delta Taxis characterized the situation as a significant challenge for traditional PHV firms, emphasizing the potential ramifications on their business model which has been a fixture of British culture for generations.
Nia Cooper, chief legal officer at Veezu, underscored the critical role of the private hire industry within the UK’s transport network, stating that it delivers essential journeys for many passengers, including those who are vulnerable.
An Uber spokesperson stated that the company advocates for regulatory consistency across the UK to ensure that all operators are subject to the same operational framework.
