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October 2015  

A "Victory for Common Sense": Uber Continues to Operate Legally in London, UK

James Tomlinson
James Tomlinson,
Partner

By Jim Tomlinson
Further to an MB Transportation Law Seminar

In a decision Uber is calling a "victory for common sense", the UK High Court ruled that Uber was not in contravention of existing London regulations with respect to taxicab meters.

Uber London Ltd. had been issued a Private Hire Vehicle (PHV) license by Transport for London (TfL), London's government agency responsible for regulating transport. Under the PHV legislation, being the Private Hire Vehicles (London) Act 1998, it is illegal for private hire vehicles to use a taximeter. A taximeter is defined "a device for calculating the fare to be charged in respect of any journey by reference to the distance travelled or time elapsed since the start of the journey (or a combination of both)" (see section 11(3)).

The Licensed Taxi Drivers' Association (LTDA) commenced a private prosecution against Uber and TfL, challenging Uber's operations on the basis that Uber was violating the terms of its PHV license. The criminal proceedings were eventually withdrawn and the matter was moved to the Administrative Court for a statutory interpretation of the Act. The parties appeared before Lord Justice Ouseley of the Administrative Court division of the High Court of Justice on October 5, 2015, seeking a declaration as to whether Uber operations violated the Act.

In his decision, dated October 16, 2015, Lord Justice Ouseley extensively reviewed Uber's operations through its app, including the passenger pickup process, the app's functions during the trip, and the fare calculation at the end. He noted that, unlike a taximeter, the Uber fare calculation uses a software-based algorithm. The passenger and driver cannot see the fare until the trip has ended. At this point, the GPS data from the trip is sent from the driver's smartphone to Uber's network and servers in the United States. The passenger then receives an email providing the breakdown of the fare, inclusive of the base fare, the distance travelled, and time taken. The fare is automatically charged to the credit card associated with the customer's account. The fare can then be disputed by the customer.

Based on this analysis, Lord Justice Ouseley found that the driver's smartphone by itself, or in conjunction with Uber's server, does not fall under the definition of a taximeter under the Act. He declared that a taximeter "does not include a device that receives GPS signals in the course of a journey, and forwards GPS data to a server located outside of the vehicle, which server calculates a fare that is partially or wholly determined by reference to distance travelled and time taken, and sends the fare information back to the device."

Similar to Justice Dunphy's ruling earlier this year in the case of City of Toronto v Uber Canada Inc., in which he stated that Uber was not operating as a "taxicab brokerage", it appears other courts are also finding that Uber does not fit under existing — and likely antiquated — regulatory schemes.

We will keep watch for UK media reports as the LTDA has indicated it will likely seek an appeal to the UK Supreme Court of Lord Justice Ouseley's decision.

Should you wish for a copy of the above-noted decision, please email Jim Tomlinson at jtomlinson@mccagueborlack.com.


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