Aaron & Partners Represent DELTA Taxis in Successful Defence at Supreme Court vs Uber

Landmark judgment as Supreme Court rejects Uber’s bid to render unlawful the businesses of its competitors   

The ruling from the highest court in the UK follows a long-running legal battle between Liverpool-based DELTA Taxis and Uber. 

The ride-hailing app fails in arguing that private hire operators needed to enter individual contracts with passengers, which would have resulted in VAT being charged on all fares in England & Wales. 

Private hire companies had warned that the extra 20% on fares would have resulted in ‘seismic consequences’ for the industry, with passengers unable to afford the services. 

A landmark judgment by the Supreme Court has ruled that private hire taxi firms should not be forced to change their business models, a move which would have resulted in passengers being forced to pay VAT – in a decision hailed as a major victory for consumers and the private hire industry. 

Ride-hailing giant Uber had sought a legal declaration that would have added VAT to all private hire fares outside of London. Uber was seeking to render unlawful a model they had previously used up to 2022 until they lost a London-focused legal challenge.  But the move was successfully challenged by Liverpool-based DELTA Taxis, represented by the legal firm Aaron and Partners. 

DELTA argued that legislation dating back to 1976 allows for multiple business models under the private hire licensing regime, meaning not all operators are required to charge VAT. While Uber’s model does trigger VAT liability, the Supreme Court agreed that competitors can lawfully operate using alternative structures that do not. 

In a judgment handed down on Tuesday, the Supreme Court dismissed Uber’s appeal and confirmed that private hire firms are not legally required to adopt the same model – or contract directly with passengers. As a result, VAT will not be automatically added to fares, avoiding a potential 20%+ price hike across England and Wales.  

The decision is being celebrated as a huge win for passengers, particularly the most vulnerable in society, and is a welcome reprieve for thousands of small private hire firms who would have faced huge cost and complexity if forced to apply VAT, many of whom wouldn’t have survived.  

Layla Barke Jones, Dispute Resolution Partner at Aaron & Partners, represented DELTA and believes the decision has saved the private hire taxi industry – saving thousands of businesses and securing many more livelihoods.  

“This is a monumental decision, not just for DELTA, but for all private hire taxi drivers and operators across England and Wales. Had this gone the other way, the cost and complexity of implementing VAT systems would have pushed many firms to the brink. 

“This ruling ensures that operators can continue to operate under established, regulated models that have been in existence since regulation was introduced almost half a century ago– such as the agency model without being forced into a ‘one size fits all’ model.” 

The ruling concludes a long-running case that’s been ongoing since March 2022, following an initial judgment in the High Court where the judge found that a private hire operator is required to contract directly with the passenger for providing the journey.  

However, that decision was overturned by the Court of Appeal in July 2024 which held that the licensing regime already provided for contractual liability for the operator without requiring operators to change their business models, in a case jointly brought by Delta Taxis and fellow operator Veezu. The Supreme Court ruling now cements the Court of Appeal outcome as the final say in law. 

DELTA had warned that any shift in the legal regime could have led to “seismic consequences” for passengers and firms alike – especially in communities where private hire services act as a lifeline.  

Layla Barke-Jones added: “Private hire firms are vital in the communities, and are used frequently by those with disabilities, low-income households and older people who rely on taxis for essential journeys and to maintain their independence.  

“If VAT suddenly had to be paid by all those people, the additional cost would have meant many simply choose not to travel at all, leaving some of the most vulnerable people in our society isolated. 

“A crisis has been averted. This ruling protects the freedom to operate and the right of communities to access affordable, reliable transport.” 

Delta was represented by a team from Aaron and Partners which consisted of Layla Barke-Jones, Dispute Resolution Partner; Simon Edwards, Dispute Resolution Consultant & Notary Public; Claire Brook, Employment Law Partner; Lucy Harrison, Trainee Solicitor and Mercedes Sharp, Trainee Solicitor. Philip Kolvin KC of 11KBW and Jen Coyne of Monckton Chambers were instructed on behalf of DELTA. Uber was represented by Hogan Lovells LLP with Tim Ward KC of Monckton Chambers leading Ranjit Bhose KC of Cornerstone Chambers. The judges presiding over the case were Lord Reed, Lord Briggs, Lord Leggatt, Lord Stephens and Lady Simler.