Uber escapes London court date -- because its drivers are already in the dock

UK transport authorities have dropped legal action on controversial e-hailing app Uber because the courts are tied up with cases relating to individual drivers.

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London taxi line up on The Mall during a protest against TFL and Uber on 11 June. Dan Kitwood/Getty

The long and winding road for Uber just took another twist and turn. London's transit authority has dropped plans to take the controversial e-hailing app to court -- because the courts are busy with individual Uber drivers.

Uber is an app that allows you to call a taxi or private hire vehicle to your location from your smartphone. When you arrive at your destination, you pay through the app too with no cash changing hands. Operating in more than 100 cities in 37 countries, Uber has proved enormously controversial with cabbies around the world, with many blockading streets in a worldwide protest last month and taxi bodies warning of further disruption.

Taxis paralyse cities across Europe in Uber protest (pictures)

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In London, home of the iconic black cab, taxi drivers are angry that local authority Transport for London (TfL) has allowed Uber to operate. TfL responded by announcing plans to refer its decision to the UK's High Court, which it hoped would end the argument by giving Uber the green light once and for all.

However, TfL today has gone back on that plan, with a new statement revealing that the High Courts cannot proceed because of smaller cases in the magistrates' court against individual drivers. Six such actions have been taken by cabbie trade organisation the London Taxi Drivers' Association (LTDA).

"The LTDA have been forced into taking out these prosecutions on behalf of Londoners," says Steve McNamara, the LTDA's general secretary, "because TfL, the regulator, which has a statutory duty to enforce the Private Hire laws, are refusing to act against Uber."

TfL reckons those cases will probably end up in the High Court anyway.

In the meantime, the transport body maintains it was right to allow Uber to operate. "TfL's position, supported by legal advice," maintains the authority, "is that there are no grounds to take action against Uber London Ltd, Uber BV (the parent company based in Holland), or Uber drivers under s.2 of the 1998 Private Hire Vehicle (Licensing) Act."

"Today is a victory for common sense, technology, innovation -- and above all, London," said Jo Bertram, Uber's General Manager UK & Ireland. "Following another round of scrutiny, Uber has yet again been rubber stamped by TfL as a fully compliant operator. London is a great city, full of creative, innovative people and companies changing the way that people think, live and interact with the world. London is fast becoming the tech capital of Europe. We're incredibly proud to be playing a part in that journey. Uber on, London!"

The meter's running

London cabbies argue that Uber is not licensed properly based on its global corporate structure, and that the smartphone app used by Uber drivers is technically a meter. Only licensed taxicabs are allowed a meter, which charges a fare based on time and distance travelled. The rate for a taximeter is set by TFL, which refutes both of these arguments.

TFL defines a taximeter as "a device for calculating the fare by means of time or distance (or both). However, it is not unlawful for a private hire operator to charge its customers on the basis of time taken and distance travelled in respect of journeys."

See the difference? Me neither. TFL does at least acknowledge that this judgement is "finely balanced," hence the plan to pass the buck to the High Court.

"This fight is on two fronts," says Steve McNamara, "one being fought in the courts and the other against the ineptitude and mismanagement at TfL. We will probably have to take to the streets in a repeat of 11 June."

The full text of TFL's statement is below.

Members of the board will be concerned to know what was behind the taxi dispute in London on 11th June. On that day at 1400 there was a protest which involved some 5,000 cabs and which was contained within Whitehall for about an hour. The MPS issued certain directions to allow peaceful protest whilst minimising the effect on emergency services and other essential activity.

Central to the dispute is the licensed private hire operator 'Uber' which was granted a licence in May 2012. It operates in 69 other cities. This operator does not own its own vehicles but 'signs up' licensed PH drivers and vehicles. Customers download an App to their smartphone or computer and book a PH vehicle using it. The work is accepted by the operator, dispatched to a driver and the customer gets the name, photograph and registration number of vehicle and the journey is tracked using GPS. At the end of the journey data is transmitted to remotely located servers and the fare calculated and then communicated to the driver's smart phone. Usually customers have set up a credit card account to facilitate payment.

It has been alleged by the PHV trade and the licensed cab trade:

That the entity that is accepting Uber bookings, and making provision for those bookings to be invited or accepted, is not a licensed PHV operator. There are references to Uber BV, a related but distinct company based in the Netherlands in certain Uber documentation


That Uber PHVs are equipped with taximeters - a device prohibited in PHVs.

In relation to the way Uber operates in London, TfL is satisfied that based upon our understanding of the relationship between the passenger and Uber London, and between Uber London and Uber BV, registered in Holland, that it is operating lawfully under the terms of the 1998 PHV(L) Act.

As the licensing authority TfL is bound to consider the initial licence application and has a duty to grant it unless we are not satisfied that the applicant is a fit and proper person to hold an operator's licence, or that the applicant has failed to met any further requirements that have been prescribed (such as those relating to operating centres). The company has taken steps and indeed made changes to its documentation to make it entirely clear as to who is accepting bookings.

Taking into account this, and having regard to case law relating to provisions outside London which are similar to s.2 of the PHV(L) Act 1998, TfL's position, supported by legal advice, is that there are no grounds to take action against Uber London Ltd, Uber BV or Uber drivers under s.2 of the 1998 Act.

In respect of the taximeter issue, s.11 of the 1998 Act prohibits PHVs from being equipped with a taximeter. The latter is defined as a device for calculating the fare by means of time or distance (or both). However, it is not unlawful for a private hire operator to charge its customers on the basis of time taken and distance travelled in respect of journeys.

Uber drivers are issued with a smartphone. At the end of a journey the smart phone sends details of the journey to a remotely based server and then receives by return the fare to be charged.

TfL's view is that smart phones that transmit location information (based on GPS data) between vehicles and operators, have no operational or physical connection with the vehicles, and receive information about fares which are calculated remotely from the vehicle, are not taximeters within the meaning of the legislation

Nevertheless, given that the legislation predates the advent of smartphones, TfL accepts that this judgment is finely balanced. It is for that reason that TfL wrote to all interested parties and advised them of our intention to seek a definitive, and binding, declaration from the High court.

However, the LDTA has issued summonses in the Westminster Magistrates' Court against a number of Uber drivers under s.11 of the 1998 Act. This now prevents TfL proceeding as we had intended as the High Court will not consider the issue whilst there are ongoing criminal proceedings on the same issues of law.

TfL is therefore now unable to seek early clarification from the High Court. In due course the LTDA summonses will be heard in the Magistrates' court. The Magistrates' decision is not binding, will almost certainly be appealed (by someone), which inevitably means the matter will end up, rather later than sooner, in the High Court.

I regret therefore that the essential, and binding, clarity about how the law should be applied in these circumstances will not be delivered for some considerable time.

Lastly although the most recent compliance check at the premises of Uber London Ltd involving several thousand records was entirely satisfactory, an earlier check did reveal a case where it appears a driver was not covered by insurance. Proceedings against Uber and the driver in respect of this are underway and this is consistent with the actions taken by TfL when it finds issues such as this. This is now a matter for the court.