Uber sought a declaration that the 1976 Act required all private hire vehicle operators outside London to accept bookings only by contracting as principal to provide the journey. The Supreme Court unanimously dismissed the appeal, holding the Act imposed no such requirement, and operators could lawfully use agency or intermediary booking models.
Background
The appeal concerned the construction of Part II of the Local Government (Miscellaneous Provisions) Act 1976 (‘the 1976 Act’), which regulates the provision of private hire vehicles (‘PHVs’) outside London and Plymouth through a licensing regime. The 1976 Act imposes a ‘triple lock’ of licensing: the vehicle, the driver, and the operator must each hold a licence. The statutory definition of ‘operate’ in section 80 means, narrowly, ‘in the course of business to make provision for the invitation or acceptance of bookings for a private hire vehicle’.
Prior to the 1976 Act, PHV operators used various models for accepting bookings, including: (i) the hire contract model, where the operator contracts as principal to provide the journey; (ii) the agency model, where the operator acts as agent for the driver, incurring no personal liability; and (iii) the intermediary model, where the operator merely uses best endeavours to find a driver, with any hire contract being made directly between driver and passenger.
The appellant, Uber Britannia Ltd (‘UBL’), had adopted the hire contract model from mid-March 2022, following the Divisional Court’s declaration in R (United Trade Action Group Ltd) v Transport for London [2021] EWHC 3290 (Admin) concerning the similarly worded Private Hire Vehicles (London) Act 1998. UBL brought proceedings seeking a declaration that the 1976 Act likewise required all operators outside London to accept bookings only under the hire contract model. The respondents, D.E.L.T.A. Merseyside Ltd and Veezu Holdings Ltd, used agency and intermediary models and wished to continue doing so.
Foster J in the High Court granted UBL’s declaration, but the Court of Appeal (Lewison, Lewis and Elizabeth Laing LJJ) reversed that decision. UBL appealed to the Supreme Court.
The Issue
The sole issue was whether the 1976 Act makes it unlawful for a PHV operator to accept a booking otherwise than by entering as principal into an immediate contract of hire with the passenger to provide the journey which is the subject of the booking.
The Court’s Reasoning
Autonomous construction of the 1976 Act
The Court, in a unanimous judgment delivered by Lord Briggs, emphasised that the 1976 Act fell to be construed on its own terms, as a whole, and against its relevant contextual background. The 1998 Act (governing London) could not serve as a prototype, being the later statute, and the Divisional Court’s decision on the 1998 Act was not binding on the Supreme Court. Lord Briggs expressly stated:
Nothing which follows is intended to express any view about the correctness or otherwise of the decision of the Divisional Court in the TFL case, one way or the other.
Analysis of section 56(1)
The central provision was section 56(1), which provides:
For the purposes of this Part of this Act every contract for the hire of a private hire vehicle licensed under this Part of this Act shall be deemed to be made with the operator who accepted the booking for that vehicle whether or not he himself provided the vehicle.
Lord Briggs held that this was clearly and expressly a deeming provision. It did not impose a regulatory requirement upon operators to accept bookings only by contracting as principal. He observed:
Had it been Parliament’s wish to do so, it could so easily have provided in terms that a booking for a PHV may only be accepted by an operator by entering as principal into a contract of hire for the provision of a vehicle for the requested journey.
Instead, section 56(1) operated as a catch-all mechanism to ensure operator liability whenever a hire contract was actually made, regardless of how, when, or between whom. Lord Briggs identified three scenarios where the deeming provision performed useful work: where the operator used the agency model, the intermediary model, or sub-operating arrangements. Crucially, the one scenario where it served no purpose at all was the hire contract model itself, because there the operator was already liable at common law:
Put shortly, UBL’s construction would render section 56(1) completely otiose.
The sub-contracting argument under section 55A
UBL relied on section 55A (introduced by the Deregulation Act 2015), which used the term ‘sub-contracting’ and referred to ‘the contract between the person licensed under section 55 who accepted the booking and the person who made the booking’. UBL argued this demonstrated that accepting a booking was necessarily a contractual process involving principal liability. Lord Briggs rejected this argument on multiple grounds: ‘sub-contracting’ was not used in its normal legal sense in section 55A; the provision was permissive and deregulatory, not restrictive; it covered only a small part of booking activity; and ‘the contract’ need not refer to a contract of hire — it could encompass any contractual arrangement, including a best-endeavours undertaking.
The public protection argument
UBL argued that its construction better served the Act’s public protection purpose, citing the example of a passenger left stranded when no PHV arrived. Lord Briggs acknowledged this point was ‘by no means without substance’ but held there was no genuine ambiguity to resolve by reference to purpose. He stated:
Quite apart from anything else, such a restriction upon what would otherwise be the freedom of operators, drivers and passengers to choose how and when (and between whom) to contract for the hire of a PHV, would require cogent justification and clear expression in the statutory language, and all the more so if sought to be interpreted as a restriction imposed merely by implication, in a statutory scheme that seeks to regulate by licensing, rather than by the imposition of restraints or requirements as to how contracts are to be made for the provision of the regulated services.
UBL’s ‘avoidance of doubt’ submission
When confronted with the difficulty that section 56(1) would be otiose on its construction, UBL submitted the provision was merely ‘for the avoidance of doubt’. Lord Briggs rejected this, concluding that section 56(1) performed a real and useful purpose where operators continued to use agency or intermediary models.
Practical Significance
This decision confirms that PHV operators outside London are not required by the 1976 Act to accept bookings solely by entering as principal into a contract of hire with the passenger. Operators may lawfully continue to use agency and intermediary models. The deeming provision in section 56(1) ensures that, whenever a hire contract does come into existence (regardless of the model used), the operator is deemed to be a party to it and bears liability for its fulfilment. The judgment also reinforces the principle that significant restrictions on commercial freedom require clear statutory expression, particularly within a regulatory scheme based on licensing rather than the prescription of contractual arrangements. Importantly, the Supreme Court expressly declined to comment on whether the equivalent provision under the 1998 Act for London was correctly decided.
Verdict: The Supreme Court unanimously dismissed UBL’s appeal. The 1976 Act does not make it unlawful for a private hire vehicle operator to accept a booking otherwise than by entering as principal into an immediate contract of hire with the passenger. The Court of Appeal’s decision was upheld.
Source: D.E.L.T.A. Merseyside Ltd v Uber Britannia Ltd [2025] UKSC 31
