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31st January, 2022

Developing Taxi Business and Driver Case Law

Phone showing maps in car

The way taxi firms operate and in particular, their relationship with customers and drivers has been the subject of much scrutiny in recent years.

The Supreme Court judgment in the highly publicised Uber case (Uber BV and others v Aslam and others [2021] UKSC 5) was handed down on 19 February 2021, but that is not the end of the story.

To re-cap, in Uber, the Supreme Court upheld the Employment Tribunal’s decision that its drivers were indeed “workers”, effectively giving the drivers rights to things such as holiday and sick pay, and protection from discrimination in the workplace, as well as having tax consequences for Uber.  5 key reasons for that decision were:

  1. Remuneration was fixed by Uber;
  2. Uber’s standard terms were imposed on the driver, who had no say in them;
  3. A driver’s choice as to whether to accept ride requests was constrained by Uber, including that Uber controlled information given to the driver such as the passenger’s Uber rating and initially withheld the destination, and that a driver’s acceptance of requests was monitored with penalties imposed for a prescribed number of cancellations;
  4. Uber exercised a significant amount of control over how a driver delivered their service, e.g. by vetting the type of car used. The driver rating system was also used to manage performance – a “classic form of subordination…characteristic of employment relationships”; and
  5. Uber restricted communication between the passenger and the driver.

This case has been referred to and followed in a number of subsequent cases regarding worker status, including in the taxi arena Addison Lee Ltd v Lange [2021] EWCA Civ 594.

As if this wasn’t enough for taxi businesses to get to grips with, it was held in the case of UTAG and Uber v TfL [2021] EWHC 3290 (Admin) at the end of 2021 that for Uber and other such ride-hailing Apps operating pursuant to the Private Hire Vehicles (London) Act 1998, the contract for a journey was formed directly between the taxi company and the passenger, and not between the driver and the passenger as Uber and others had sought to assert.  The Court also held that Transport for London (TfL) needed to reconsider its practice of not reviewing an operator’s contractual terms when considering its operating licence.

We have already seen instances of TfL writing to such operators requiring them to review their terms and conditions in light of these two judgments, and to request sight of not only their contractual terms with passengers, but with the drivers too.

Despite a growing number of worker status cases in the Employment Tribunal generally finding the worker relationship to exist, there are exceptions to this, with the recent Tribunal case against Alpha Cars (Liverpool) Limited finding, despite Uber, that a driver was self-employed for a number of reasons including that the local authority fixed the maximum fare, not the taxi company; the driver had full control over which geographical region to operate in, including being able to ‘sift through’  bookings; the driver was paid directly through cash payments, or alternatively for card payments received the money in full from the taxi company with payment from the driver to the company being via a ‘settle fee’.

It may therefore be time for all taxi businesses to consider their working practices and standard terms and conditions, to ensure that they are in line with recent developments and help to prevent what could be costly driver claims.  What all of these cases reinforce is that the question of employment status is never clear cut in any industry or sector.  The extent of control exercised over a potential worker is still a key element, along with the reality of what happens in practice.

Contact us for help and advice.

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