U.K. High Court Rules In Uber’s Favor On Taximeter Dispute

In a big win for Uber in London, the U.K. High Court has ruled that its use of a smartphone app does not constitute a taximeter — so is not breaking the law on this specific technical point.

Taximeters enable taxis to vary their fare in real-time, based on traffic conditions.

The ruling is the culmination of a long running battle between drivers of London’s more highly regulated black cabs and app-based on-demand ride hailing incomer, which claims to have more than a million users in the U.K. capital now.

London taxis have more onerous regulatory requirements, such as passing a knowledge test of London’s streets, than private hire vehicles (the category under which Uber falls). And cab drivers argue that Uber’s smartphone app is the equivalent of a taximeter for calculating fares — which it’s illegal for PHVs to have.

However the judge, Mr Justice Ouseley, clearly disagreed with this argument. “In my judgment, these PHVs are not equipped with a taximeter as defined by section 11(3),” he writes in the ruling. “The driver’s Smartphone with the Driver’s App is not a device for calculating fares by itself or in conjunction with Server 2, and even if it were, the vehicle is not equipped with it. I reach that conclusion as a matter of the ordinary meaning of the words as applied to the agreed facts.”

He concludes judgment with the declaration that:

A taximeter, for the purposes of Section 11 of the Private Hire Vehicles (London) Act 1998, 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.

Transport for London (TfL), the local government body which regulated the operation of taxis and PHVs in London, had previously said it did not believe Uber’s use of smartphones was equivalent to a taximeter — but had deferred the final decision to the High Court.

Another regulatory advantage of being certified as an official London taxi is being legally allowed to pick up fares from anywhere — a ‘perk’ offered to black cabs to off-set the regulatory requirements they have to meet. However Uber’s use of a location-pinpointing app that matches drivers with passengers in real-time effectively enables the company to pick up fares from anywhere — further fueling London cabbies’ grievances regarding the service.

Today’s High Court ruling pertains specifically to the taximeter point — and is effectively only a ruling on the technical definition of what constitutes a taximeter under current TfL taxi regulation rules. However Uber is clearly hoping it can use the ruling to generate wider momentum in its favor.

Responding to today’s High Court ruling in a blog post Uber dubbed it a “victory for common sense”. “We understand that black cab drivers are feeling the pressure from services like Uber. But the answer is to reduce today’s burdensome regulations on cabbies — not introduce new regulations on an entire industry,” it said.

TfL is currently running a separate consultation for proposals to changes to existing regulations for PHVs — with suggestions such as a mandatory five-minute wait before they can pick up passengers, to try to ensure a level playing field between taxis and tech-powered taxi competitors like Uber.

Following today’s High Court ruling, Uber reiterated its condemnation of TfL’s proposals, dubbing them “nonsensical”, and arguing: “They will be bad for riders — making the experience slower and the app clunkier to use; bad for drivers — limiting their choices; and bad for London — restricting the ability of everyone to share a ride across town.”

“Let’s hope today’s High Court decision in favour of new technology leads to TfL shelving their nonsensical new rules,” it added.

The company has clashed with local regulators in markets around the world. (It’s a sure-fire sign a startup is scoring above average in the disruption stakes when there’s an entire Wikipedia page dedicated to the legal status of its service in different global markets…) However in London it is facing a swathe of restrictions on its operations if all the TfL proposals rule changes come to pass. (Although it’s worth stressing that TfL is running a consultation on those proposals, so no rule changes have been decided at this point.)

Writing in the Telegraph newspaper earlier this month — in response to being petitioned by Uber users galvanized by the company into objecting on its behalf to the proposed rule changes — London’s mayor, Boris Johnson, voiced some support for cabbies’ grievances, arguing that: “At present that law is being systematically broken — or at least circumvented — by the use of the Uber app.”

He went on to call for “a balance that allows a coexistence”, between a “premium” black cab service, and “minicab apps that have become a boon to so many”.

“Until Parliament has the guts to change the law we must uphold the existing and long-standing legal distinctions between black cabs and minicabs,” Johnson added.

This month local Uber app-based rival (and U.K. startup) Hailo handed back its PHV licence to return to being a black cab only ride-hailing service — with the aim of differentiating vs Uber et al by positioning itself as a premium alternative.

“As a society, we put value on things above and beyond just purely a race to the bottom and doing things as cheaply as possible,” argued CEO Andrew Pinnington, discussing Hailo’s shift in gears with TechCrunch earlier this month. “That might be accessibility, that might be safety and reliability, it might be service. It’s not necessarily all about price.”

Responding in a statement to the High Court ruling today, Pinnington added: “We are clear that the sector needs to work together and put forward a bold vision for the role of black cabs across London, and this involves a level playing field — this means no pick and mix on regulations and basic common standards across both sectors.”

Also responding to the ruling today, U.K. minicab price comparison app Kabbee — another Uber rival — said the ruling on the taximeter point is a welcome clarification for players in the market, albeit one that has been a long time coming.

“Now all licensed minicab fleets have the right to use in-car meters which will mean more competition and better consumer choice — it’s a positive step,” Kabbee said in a statement.

However it added that the ruling does not address “remaining inconsistencies” pertaining to Uber’s operations — pointing to issues such as Uber not requesting a destination address from passengers, and questions over payment of VAT and how it pays drivers.

For its part Uber generally argues that the ‘answer’ to technological disruption of regulations is to loosen the rules governing taxis — rather than tightening the screw on rivals’ use of new technologies. But there is little doubt Uber’s very well funded business has benefited — and continues to benefit — from using technology to circumvent regulations in the interim, i.e. before regulators have caught up with tech developments and figured out how best to respond to them.