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Uber withdraws appeal

Uber Britannia Limited withdraws York licence appeal

Uber Britannia Limited (UBL) today withdrew its appeal against the decision by York City Council (December 12 2017) refusing to renew its PHV operator’s licence.

Background & Chronology

On 24 December 2015 The City of York Council issued a 12-month PHV operator’s licence to UBL. On 21 December 2016 the council’s Licensing and Regulatory Committee renewed UBL’s York PHV operator’s licence for a further period of 12 months (i.e. expiring on 23 December 2017).

Between the 2016 renewal of UBL’s licence and consideration of the 2017 application for further renewal, York Council received a substantial number of complaints relating to Uber drivers/vehicles operating in York. A significant number of these complaints were that ‘out of town’ Uber driver and vehicles (i.e. licensed by authorities other than York) were plying for hire in York.

Complaints about ‘out of town’ Uber drivers working in York included complaints about drivers/vehicles licensed by:

  • Bradford: 44 complaints.
  • Leeds: 33 complaints.
  • Kirklees: 10 complaints.
  • Rossendale: 6 complaints.
  • Newcastle upon Tyne: 5 complaints.

In each of the above instances, the relevant licensed operator was UBL.

By letter dated 6 December 2017 the York Taxi Section wrote to York Council to draw its attention to reports of a worldwide data breach in which some 57 million Uber account-holders’ personal details, and some 600,000 Uber driver details were stolen by hackers in October 2016. The letter pointed in particular to –

  • Uber’s payment of $100,000 ‘ransom money’ to the criminal hackers.
  • Uber’s failure to report the crime to the police or regulators.
  • Uber’s failure to inform the victims of the data breach until a year later.
  • Uber’s remaining silent about the breach during its discussions with TfL when consideration was being given to the renewal of Uber’s (ULL) London PHV operator’s licence.

Other objections by York PHV associations

The York Hackney Carriage Drivers Association and the York Private Hire Association (among many others) appeared at the licensing hearing on 12 December 2017 to object to the renewal of UBL’s licence. The issues raised by the associations included:-

  • that the Uber business model unlawfully requires PHV bookings in York to be accepted by Uber drivers;
  • that Uber drivers licensed by other authorities were working in York on the Uber platform (“the cross-border issue”) in the full knowledge of UBL and at their behest;
  • that traffic and parking issues arose as a result of these activities;
  • that UBL were unable to explain who passengers contract with or who accepted bookings;
  • that Uber’s activities affected the physical and online safety of its customers;
  • that when questioned by other authorities about its operating model, UBL withdraw applications;
  • that evidence has been given by Uber in the Aslam litigation and elsewhere that bookings were backfilled by Uber after they had been accepted by drivers;
  • that driver involvement in the booking process contravened a standard condition imposed by the Council on PHV operator’s licences that an operator is not permitted to accept bookings forwarded by a PHV driver;
  • that inadequate background safety checks were carried out by UBL; and
  • that Uber have improperly used ‘Greyball’ and other software to restrict access to data when regulatory checks were carried out by authorities.

The decision

After deliberating in open session, York’s Regulatory and Licensing Committee refused (by majority) to renew UBL’s York PHV operator’s licence under section 62(1)(b) LGMPA 1976, namely “conduct on the part of the operator which appears to the district council to render him unfit to hold an operator’s licence.” The committee’s reasons may be summarised –

  • The failure by Uber to inform the relevant authorities until November 2017 of a serious data breach that occurred in 2016 (and which affected York users of the Uber App) rendered UBL unfit to hold a PHV operator’s licence.
  • The increasing number of complaints received by York Council about private hire vehicles operated by UBL and driving in York gave rise to concerns about the proper management by UBL of its drivers.

Additional grounds of refusal under section 62 of the LGMPA 1976

Section 62 of the LGMPA 1976 provides: –

62   (1) Notwithstanding anything in this Part of this Act a district council may… (on application therefor under section 55 of this Act) refuse to renew an operator’s licence on any of the following grounds: —

(a) any offence under, or non-compliance with, the provisions of this Part of this Act;

(b) any conduct on the part of the operator which appears to the district council to render him unfit to hold an operator’s licence;

(c) [material change in circumstances of operator; conviction of immigration offence, etc.]; or

(d) any other reasonable cause.

If the appeal had not been withdrawn, the associations would have submitted that there were compelling grounds for the refusal of UBL’s operator’s licence under section 62(1)(a) and 62(1)(d).

The Appeal: applications by York PHV associations to participate

UBL appealed the decision to the magistrates’ court. The York Hackney Carriage Drivers Association and the York Private Hire Association were not statutory parties to the appeal: applications to participate were therefore made by them and were due to be heard by the Chief Magistrate on 20 March. The issues which the associations wished to raise included UBL’s non-compliance with the Act (section 62(1)(a)) and the undermining of the principle of local licensing (section 62(1)(d)).

Non-compliance with the Act

It was the associations’ case that UBL actively sent Uber drivers, equipped with the Uber driver’s APP, to work on the Uber platform in controlled districts in which neither UBL nor the drivers are licensed under the 1976 Act. In so doing, UBL were potentially guilty of offences under section 46(1)(d) – i.e. making provision for the invitation or acceptance of bookings in a controlled district without holding a licence from that district. Section 62(1)(a) is triggered.

Other reasonable grounds for refusing to renew

The associations also claimed that UBL encouraged drivers not licensed by York to carry out PHV bookings in York (where UBL hold an operator’s licence). Further, that UBL similarly encouraged drivers to go to other controlled districts in which they, but not the drivers, are licensed, in order to wait for PHV bookings. The associations would have submitted that UBL’s active encouragement and employment of ‘out of town’ drivers who are not subject to York’s licensing requirements seriously undermined the principle of local licensing control that underpins the legislation. Section 62(1)(d) is triggered.

In Shanks v North Tyneside Borough Council[1] Latham LJ said that a central purpose of the 1976 Act is “that the authorities responsible for granting licences should have the authority to exercise full control” over all vehicles and drivers being operated within its area. In Blue Line Taxis v Newcastle upon Tyne City Council[2] Hickinbottom J said that “the hallmark of the licensing regulatory regime was localism.

Notwithstanding representations by the associations, local councillors and committee members expressing concern at the undermining of local control and the lowering of locally imposed standards because of an influx of ‘out of town’ drivers, the licensing committee was advised that their decision was “not about the arguments for and against drivers out of town operating in the City.”. The licensing committee was further told that their decision was “solely about” whether UBL was a fit and proper person to hold a licence. The licensing committee does not appear to have been referred to the grounds of refusal given by section 62(1)(a) & (d).

Conclusions

No cogent explanation has been by UBL for the withdrawal of its appeal in York. Whether or not it has anything to do with Uber’s newly-created “regions”, and “geofencing” and its claim that it has addressed the concerns of licensing authorities about cross-border hiring, and the resulting lack of local control, will no doubt become clear as the next days and weeks pass.

An Uber spokesman has said: “Following recent changes we’ve made in the UK, as well as numerous licence renewals in cities including Sheffield and Cambridge, we have decided to withdraw our appeal in York. Rather than take up valuable court time and costs we intend to apply afresh for a new licence in the near future.”

For recent changes to Uber model, see:  https://www.taxi-point.co.uk/single-post/2018/02/15/Uber-proposes-tightening-up-on-crossborder-driving-in-the-UK)

 

Gerald Gouriet QC acted for The York Hackney Carriage Drivers Association and The York Private Hire Association.

 

 

 

 

 

 

 

[1] [2001] EWHC 533 (Admin)

[2] [2012] EWHC 2599 (Admin)