The ruling is a victory for the ride-hailing service, which has faced significant opposition from London's established cab trade, but taxi drivers already are challenging the decision.
London's High Court ruled Friday that Uber's app is not a fare meter and therefore does not break the law, a significant victory for the ride-hailing service facing legal challenges around the globe.
Uber has long argued its GPS-reliant app isn't the same thing as a "taximeter" that black cabs use to dictate the cost of a journey based on distance and wait time. Only licensed black cab and minicab drivers are permitted to use the meters to calculate fares in Britain's capital.
San Francisco-based Uber has risen to prominence as people have flocked to its service for hailing a car with a smartphone app. Uber has counted more than 1 million registered users in London since mid-2012. However, the company's aggressive expansion into the heavily regulated domain of taxis has generated legal challenges and taxi driver protests across the world.
Transport for London, the city's transportation regulator, brought the case to the High Court in 2014 to ask for clarity. The regulator laid out its own view that Uber's app was not a taximeter but under pressure from the capital's taxi drivers decided to refer the decision to the court.
A taximeter and the smartphone app differ significantly, the court ruled. "A taximeter...is not a device which receives GPS signals in the course of a journey, and forwards GPS data to a server located outside of the vehicle, which calculates a fare...and sends the fare information back to the device," according to the court's decision.
The smartphones used by Uber drivers can calculate fares, the court ruled, but don't actually calculate the fares themselves. It is drivers, not their cars, who are technically "equipped" with the smartphones, the court added.
"This is great news for Londoners and a victory for common sense," Uber's UK general manager, Jo Bertram, said in response to the ruling.
Transport for London said it welcomed the clarity.
"With legal certainty established over taximeters, we will continue to work hard with all of our stakeholders to deliver taxi and private hire services which meet the needs of modern London," Leon Daniels, the regulator's managing director of surface transport, said in a statement.
The Licensed Taxi Driver's Association in London already responded to the ruling and said it has lodged an appeal with the Supreme Court.
London is just one of many cities across the world in which Uber has faced significant opposition and protests from the established taxi trade. The capital, with its strictly regulated black cab industry, has presented its own unique set of challenges to Uber.
Today's ruling is not necessarily the end to Uber's woes in the city, though. Transport for London is currently considering whether there should be a minimum five-minute wait between passengers ordering a car and getting picked up. Other proposals include stricter rules about English language skills and insurance.
More than 133,000 people have signed a petition created by Uber to protest those proposals.
"We know that some ideas put forward for consultation are controversial, which is why we want as many people as possible to tell us what they think to help shape the future of private hire in London," Daniels said.
Bertram said he hopes the court's ruling causes Transport for London to "think again on their bureaucratic proposals for apps like Uber. Compulsory five-minute waits and banning ride-sharing would be bad for riders and drivers."
Transport for London and London Mayor Boris Johnson are also seeking to cap the number of private-hire drivers allowed to operate in the capital. The number of drivers has increased from 59,000 in 2009-10 to 89,000 today, and Transport for London predicts the total could rise to 128,000 over the next two years. The government will decide whether to put a cap in place.