Uber “invitation to book” – High Court says no

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Uber “invitation to book” – High Court says no
By: Anonymous | Published On: 2/03/19 7:48 pm

Reading Borough Council v Mudassar Ali [2019] EWHC 200 (Admin)

There has been no abating in the national debate on cross-border hiring.  The debate initially started with the phenomenon of private hire vehicles (PHVs) predominantly working in areas where they are not licensed.  The lawfulness of what has become known as “the right to roam” has now been established most recently in the case of Delta Taxis and Uber v Knowlsey[1].  In recent months, the debate has shifted to the issue of these PHVs - who have the right to roam - being guilty of presenting themselves to create an “invitation to booking” contrary to s.80 Local Government (Miscellaneous Provisions) Act 1976.

Case background

Mr Mudassar Ali was charged with two offences.  The first that in the early hours of 21st January 2017, in Reading, he was plying for hire with a Ford Galaxy, registration number LR12 ORZ on Kings Road, Reading for which vehicle a licence to ply for hire from Reading Borough Council had not previously been obtained.  This was contrary to section 45 of the Town Police Clauses Act 1847.  The second offence is in identical terms as the first but concerns the early hours of 22nd January 2017.

Mr Ali was an Uber driver, licensed by Transport for London.  On the nights in question he was in Reading, Berkshire waiting for a passenger.

High Court

Reading Borough Council appealed the decision by way of case stated and on the 7th of February 2019 Lord Justice Flaux handed down his judgement in the case of Reading Borough Council v Mudassar Ali.

The questions before the High Court were:

  1. As a matter of law did the display of the respondent’s [Mr Ali] vehicle as the outline of a car on the smartphone Apps of potential passengers constitute an invitation to book the respondent’s vehicle?
  2. As a matter of law did the display of the respondent’s [Mr Ali] vehicle as the outline of a car on the smartphone Apps of potential passengers constitute an invitation to book an Uber vehicle in the vicinity, even if it were not the respondent’s?
  3. If the answer to questions (1) or (2) is yes:
    1. Did the Chief Magistrate err in law in holding it to be relevant to whether the respondent was plying for hire, that his vehicle had no distinctive markings, was not at a stand and was not available on the street to pick up passengers in the traditional way? and/or
    2. Did the Chief Magistrate err in law in holding it to be a relevant consideration that the whole of the transaction between the passenger and the driver, and the passenger and the licensed operator, was conducted via a smartphone App, where the booking process starts, is recorded and the fare estimated?
  4. On the facts agreed and found by her, did she err in law in finding that the prosecution had not proved that the respondent was plying for hire?

Reading’s Case

Reading Borough Council’s principal argument was that the exhibition of the vehicle’s location on the Uber App was the equivalent to displaying a “for hire” sign on the vehicle. The suggestion that the map was merely showing the outline of the vehicle downplayed the significance of the App. The depiction of the vehicle indicated that there was a vehicle available for immediate hire which constituted an invitation to members of the public who had downloaded the App to use the vehicle immediately. This was plying for hire and the App simply used the internet to facilitate that plying for hire.

Reading also stated in their argument that traditional private car hire where bookings were made over the telephone was the equivalent of the job-master in the nineteenth century, with the invitation to use a minicab coming from the proprietor of the firm acting as a principal, accepting a pre-booking and contracting as principal at that point. By contrast, Uber was a laisser-faire system where the drivers were autonomous. The App was a trading platform to match drivers with customers.

Mr Ali Case

For his part, Mr Ali’s argument was that that the depiction of the vehicle on the App was for the benefit of the private hire customer who used the App, to show a potentially available vehicle, and was not plying for hire. The App did no more than show the location of various vehicles in the vicinity of the customer, who could only make a booking through the Uber App without being able to select a particular vehicle. The fact that an unidentified depiction of the respondent’s vehicle appeared on the App was not express or implied solicitation of custom so as to amount to plying for hire. This was simply the use of modern technology to do what had been happening lawfully over the telephone for decades, when a customer rang a PHV business to ask for a car in, say, five minutes and the staff at the PHV operator informed the customer that there were a number of cars within five minutes of his pick-up point and one would be despatched.

It was submitted also that neither the legislation nor the case law required the driver to vanish between jobs in order to avoid plying for hire, so the result in this case should not turn on where the respondent was. Nevertheless, it was submitted that the respondent whilst parked in Reading waiting for a booking over the App was not soliciting custom or plying for hire. The Chief Magistrate had been quite right to contrast the waiting by this vehicle with that of the car in Rose v Welbeck. Here the waiting was of a completely different character. It was not waiting for a customer from the street to get into the car, but waiting for the purpose of a private hire booking which would come exclusively via the Uber App.

The verdict

Lord Justice Flaux found that the way Uber operates did not constitute unlawful plying for hire.  In his judgement, he outlined a number of reasons for his conclusions:

  1. the mere depiction of the respondent’s vehicle on the Uber App, without either the vehicle or the driver being specifically identified or the customer using the App being able to select that vehicle, is insufficient to establish exhibition of the vehicle for the purposed of inviting a booking.

In coming to this conclusion, Flaux LJ replied on a number of authoritative cases, Cogley v Sherwood and Rose v Welbeck, that ruled the essence of plying for hire means that the vehicle in question should be on view, that the owner or driver should expressly or impliedly invite the public to use it, and that the member of the public should be able to use that vehicle if he wanted to.

  1. Flaux LJ did not agree with Reading’s argument that the Uber app was a trading platform to match drivers with customers.  Flaux LJ said in relation to this: “On the findings she made as to how the Uber App works, the customer has to confirm the booking after he or she [Chief Magistrate] is given the fare estimate and the driver in turn has to accept the booking before either of them knows the identity of the other and before the car actually comes to the pick-up point.  He continued: “…it does not seem to me that the position is different because, as between Uber and the driver, the latter is a principal and Uber is an agent.”

Some references were made on whether a contract exists between the passenger and the driver or, between the passenger and Uber.  This is relevant because in the former (i.e. passenger and driver), the argument supported the case for unlawfully plying for hire.  However, Flaux LJ rejected this stating that “On the findings she [Chief Magistrate] made as to how the Uber App works, the customer has to confirm the booking after he or she is given the fare estimate and the driver in turn has to accept the booking before either of them knows the identity of the other and before the car actually comes to the pick-up point.”  He continued: “Whatever the correct contractual analysis, in my judgment it has no impact on the question we have to decide. On any view, there is a pre-booking by the customer, which is recorded by Uber as PHV operator, before the specific vehicle which will perform the job is identified.”

  1. On the third point that Flaux LJ referred to as “the character of the waiting”, he said “The respondent was waiting in his vehicle until a customer confirmed a booking on the Uber App and he accepted that booking. There was no question of his soliciting custom during the period of waiting. His vehicle did not advertise itself as available for hire nor did he do anything which would have suggested to the public that he was available for hire. Indeed, as the Chief Magistrate found, if a member of the public had approached the vehicle and sought a ride, the respondent would have refused to take such a passenger off the street without a prior booking through the Uber App.”

The High Court consequently turned down the appeal by Reading, ruling in reference to the questions posed by the council that:

  1. Mr Ali’s vehicle displayed on the Uber app did not constitute an invitation to book and therefore was not guilty of plying for hire; and
  2. Other Uber vehicles in the vicinity whose vehicles were outlined on the Uber app similarly did not constitute an invitation to book and therefore was not guilty of plying for hire.

Conclusions

Whilst this was an important case and the first one of its kind to be determined by a High Court, it must be remembered that the case was largely determined on its individual merits. 

The High Court judgement was limited to the way Uber operates and is to this extent not necessarily also relevant to other ride-hailing firms who may operate in a different way.

This case also reiterated, as has been done in previous cases, that the mere presence of a licensed vehicles is not sufficient in itself to constitute plying for hire.  The High Court referred to this as the “essence of plying for hire” and confirmed that there must be certain behaviours on display.

The combination of the Knowlsey case (i.e. PHV right to roam) and this case has, for the time being at least, upheld Uber’s modus operandi as lawful.  The High Court did not disagree with Uber’s case that nothing in statute or common law required PHVs from “vanishing” between fares and so there is nothing in law stopping Uber PHVs from parking up when waiting for their next hailing.

The validation of Uber’s modus operandi may exacerbate the current issues, both locally and nationally, around cross-border hiring and it seems that nothing short of a new Act of Parliament requiring PHVs to return to base (or at least their licensing district) will be necessary here.

However, the Government has not agreed with the Taxi & Private Hire Task & Finish Group’s recommendation that there should be a statutory definition of “plying for hire” that should include “…reviewing the use of technology and vehicle 'clustering' as well as ensuring taxis retain the sole right to be hailed on streets or at ranks.” 

It seems therefore that no legislation in respect of defining plying for hire or pre-booking will be forthcoming.  This will therefore leave the matter to the courts to decide on as was the case here.

 

[1] (R (Uber Britannia Ltd & Delta Merseyside Ltd) v Knowsley Metropolitan Borough Council [2018] EWHC 757 (Admin)

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