Cardiff taxi firm in Supreme Court battle with Uber over bid to add VAT to fares

Martin Shipton

Cardiff-based Veezu is one of two taxi firms preparing to take on Uber at the Supreme Court in a case that could result in private hire fares rising by at least 20% in Wales and England.

It will be the third time in four years that Veezu and Delta have gone up against the international ride-hailing app, which is seeking a declaration from the court that would see VAT added to the cost of all private hire vehicle (PHV) taxi fares outside of London.

Ahead of the hearing, expected in July, Veezu and Delta have launched a  ‘Fighting Fund to Protect Passenger Fares’ campaign, calling for cross-sector and public support as they mount a defence against Uber in the next phase of this long-running legal battle.

The proceedings relate to an Act of Parliament that had been in place without issue since 1976, until Uber challenged it 48 years later. If Veezu and Delta lose the case, passengers could see the cost of taxi journeys rise to unaffordable levels through the application of VAT at 20%.

Zero VAT rating

Unlike other modes of transport, which benefit from a zero VAT rating, the PHV industry remains the only form of transport subject to full VAT.

Veezu and Delta argue that despite its dominance in towns and cities and its vital role in everyday mobility, the industry is often overlooked in transport policy. This regulatory change would place the industry at unnecessary risk and disproportionately impact passengers who rely on these services, including the elderly, individuals with restricted mobility, and low-income households, particularly in less connected and rural areas.

In many communities, Veeza and Delta argue, PHVs are the only safe and reliable 24/7 transport mode. Data from Veezu shows that 43% of trips cater to healthcare, work, or educational needs, rather than for leisure. A fare increase of at least 20% has the potential to leave some of Britain’s most vulnerable people without a reliable way to access appointments, jobs, and basic services, Veezu and Delta argue.

Drivers

The battle also poses a serious risk to the livelihoods of thousands of self-employed drivers, who may see reduced passenger demand and earnings as a result of higher fares.

In the UK many small PHV operators could be forced out of business and an estimated 25,000 self-employed drivers would have to look elsewhere to earn a living. Consequently, passengers may find themselves dealing with significant driver shortages in all areas and no service provision in other areas.

A fundraising target of £500,000 has been set by Veezu and Delta, with the money being used to help fund the campaign. Costs and legal fees totalling more than £1m have already been incurred in this long-running saga, and they are set to rise further as they gear up for their third court battle.

Nia Cooper, chief legal officer at Veezu, said: “This case is about protecting the future of the private hire industry and the millions of passengers who rely on it every day. The private hire industry is integral to the transport network in the UK and provides essential journeys to passengers, particularly those who are vulnerable. It is often the only form of transport accessible to local communities on a consistent and reliable basis.

“The ruling sought by Uber would impose a VAT burden on the rest of the industry that would create unfair competition across the sector and disregard the long-established structure of private hire firms. If upheld, vulnerable passengers, drivers, and established British PHV businesses will be caught in the crossfire of Uber’s commercial ambition. That is why we are taking a stand to preserve choice, affordability, and the independence of private hire operations across the country.”

‘Shared aim’

Layla Barke Jones, dispute resolution partner at the law firm Aaron & Partners, who has represented Delta Taxis in the court cases to date and will represent the firm in the Supreme Court, said: “The Court of Appeal judgement was a victory for the taxi industry and all those who depend on it, but Uber’s decision to make the final appeal means we need to go to the Supreme Court to take up the fight once again. There has always been a shared aim to protect passengers, drivers and taxi firms alike throughout this case.

“We believe it is the most vulnerable people in our communities who depend on these taxis that will be hardest hit, such as those with disabilities, low-income households and older people. It’s down to us to stop that happening.

“There’s a lot at stake whichever way you look, but it’s our hope that we can once again block this move by Uber and protect the operators, drivers and passengers who rely upon traditional taxi firms.”

Uber was invited to comment, but did not do so.

Those wishing to donate to the firms’ fighting fund can do so via this link: https://www.crowdjustice.com/case/protectfares/