Private hire taxi firms across Merseyside may have to raise fares by 20% after losing a court battle with Uber. Tony McDonough reports
Private hire taxi passengers in Merseyside could face fare hikes of up 20% following a court ruling.
Legal firm Aaron & Partners represented a group of Liverpool taxi firms, including Sefton-based Delta Taxis, in the High Court in a case brought by ride sharing app Uber. Sefton Council was also a party in the case.
In 2022 Uber handed over £615m in tax to UK authorities – following the settlement of unpaid VAT.
It had argued in the past that it was exempt from paying VAT with its drivers classified as self-employed. A landmark court ruling later clarified its drivers were indeed classed as ‘workers’.
With Uber’s revenue exceeding the VAT threshold, the company started to charge passengers an extra 20% to cover VAT. Uber wanted UK private hire and taxi firms to do the same, and how now been successful in its legal bid which may force them to do so.
There are now calls on the Government to step in and prevent the rise, which comes amid the cost of living crisis currently hitting the UK.
The case in the High Court began hearing submissions at the end of 2022, and after a long delay, the decision was handed down by Mrs Justice Foster on Friday afternoon.
Layla Barke-Jones, a partner in the dispute resolution team at Aaron & Partners, said: “Without a doubt, the case has the potential to cause significantly increased costs that will hit passengers everywhere at the time of a cost of living crisis.
“Delta had hoped to protect passengers from such an impact, and will now call on the Government to make private hire taxi journeys zero rated for tax purposes, in line with other forms of transport like buses and trains.”
Ms Barke-Jones said the outcome had been “heavily influenced” by a previous case relating to private hire vehicles operating in London, which Uber was also involved in.
She added: “We are disappointed at the outcome and are taking time to consider and reflect upon the judgment. We respect the judge’s findings but are considering the impact with our client including whether to appeal.”