Since when did taxi firms become on good terms with Uber and other ridesharing platforms? Ever since the ridesharing trend started, it seemed doomsday for cabs, which were the number one mode for passengers before.
Well, in Great Britain, two taxi companies have eagerly launched a crowdfunding drive for the last leg of a lengthy legal battle with Uber because of the ridesharing platform collaborating with the law in favor of them. This would result in higher taxi fares.
“Uber believes that there should be consistency throughout the UK to ensure all operators are required to have the same model,” a spokesperson for Uber stated.
This July, Uber will seek a ruling on contractual models that affect whether VAT applies to private-hire firms outside London, through a supreme court hearing. Uber is arguing this would even the playing field across the United Kingdom.
The taxi industry, particularly the minicab industry, is fighting the move, saying this would vehemently raise the cost of taxi trips and journeys outside London by at least 20 percent. Not a really significant figure, but enough to make taxi drivers cringe.
This is in relation to a ruling in 2021 wherein Uber was forced to add VAT to their rides booked via their app with regard to their fares in London. It then took legal action in partnership with the Sefton council in Merseyside, where Liverpool’s Delta Taxis is based, one of the complainants, over its clauses for operators.
These private hire car companies have usually categorized drivers as independent, self-employed contractors, so for them, they do not need to pay value-added tax. This issue on tagging drivers as one of the categories for contractors has been in the media recently, which the Ridesharing Forum has covered.
The complainants, which also include Cardiff’s Veezu are trying to raise hundreds of pounds to support their legal battle.
The private taxi hire industry is arguing that this regulatory change would disproportionately affect passengers who rely on cabs, such as elderly people, and those with restricted mobility in areas with pool public transport, which is a no-brainer.
For Cardiff’s Veezu, its data show that 43 percent of minicab trips are for medical, work, or educational reasons, instead of leisure.
Also, these taxi firms are saying that smaller operators could be forced out of business, which would affect around 25,000 self-employed drivers. Due to this, passengers can get fewer to no services, which is sad.
Let’s hear it from Delta Taxis. Paul McLaughlin from this firm said their appeal may be a “David vs. Goliath moment,” but they are optimistic they would win the battle.
“This court case could have massive repercussions for PHV firms like us using the traditional agency model, which has been part of British culture for generations. If Uber wins, it will add at least 20 percent to the cost of a private hire taxi fare outside of London … The impact will be felt far and wide,” McLaughlin stated.