LONDON –Uber has lost its bid at the UK Supreme Court to impose a 20% value-added tax (VAT) on rival private-hire operators across England and Wales, in a case that could have significantly disrupted the broader ride-hailing industry.

The ride-hailing giant had argued that other private-hire companies—like Delta Taxis and Veezu—should also be deemed to enter into direct contracts with passengers, just as Uber was ruled to do following a landmark 2021 Supreme Court decision. That earlier ruling classified Uber drivers as “workers,” entitling them to minimum wage and holiday pay, and obligated Uber to charge VAT on rides.

In pursuit of a level playing field, Uber asked for the same interpretation to apply to its competitors, and initially succeeded in the High Court. That decision, however, only affected rides outside of London, which operates under a distinct regulatory regime.

But in July 2024, the Court of Appeal overturned that ruling after legal challenges from regional operators Delta Taxis and Veezu. On Thursday, the Supreme Court unanimously upheld the appeal court’s decision, stating that operators outside London are not required to enter into contracts with passengers—effectively sparing them from the 20% VAT obligation.

An Uber spokesperson acknowledged the verdict, noting that it “confirms that different contractual protections apply for people booking trips in London compared to the rest of England and Wales.” However, the company stressed that the ruling does not affect Uber’s own VAT obligations.

Delta Taxis’ legal representative, Layla Barke Jones of Aaron & Partners, welcomed the decision, warning that “a crisis has been averted” for smaller operators who would have been burdened by the tax hike. Meanwhile, Veezu’s Chief Legal Officer, Nia Cooper, called the outcome “a triumph for the UK private hire sector,” highlighting that it helped prevent significant fare increases.

In a related matter, Estonian ride-hailing and food delivery firm Bolt also scored a legal victory earlier this year, fending off an attempt by HM Revenue & Customs (HMRC) to impose VAT on the full cost of its rides. Bolt currently only charges VAT on its commission margin—a point HMRC is now seeking to challenge in the Court of Appeal.

Commenting on Uber’s defeat, Kimberly Hurd, Bolt’s UK General Manager, welcomed the clarity but called for a uniform regulatory framework. “It’s time for consistent rules across the UK to support fair competition and clear obligations,” she said.