London High Court Rules in Favor of Uber Over Tax on Rival Apps

London High Court Rules in Favor of Uber Over Tax on Rival Apps

The London High Court has ruled in favor of the taxi aggregator company Uber, directing the other ride-hailing apps to pay twenty per cent tax charge on their profit margins.

Judge Alison Foster ruled that companies with a private-hire vehicle operator's license must enter into such a contract with their passengers.

Uber had filed the present lawsuit by following a 2021 verdict passed by the United Kingdom’s Supreme Court had observed that Uber drivers were workers, which had an impact on the company’s tax and other obligations.

In an effort to level the playing field with rivals, Uber while taking legal action, pleaded before the High Court to pass an order directing the private-hire taxi operators must sign into a contract with passengers.

An Uber spokesperson said in a statement that the ruling, “resolves a major inconsistency in the way that rules have been applied for private hire operators across England and Wales. Whilst it clarifies many key points, there remain questions on VAT and what passengers should pay.”

Resultantly, the ride-hailing apps will be required to pay value added tax (VAT) at twenty per cent on the basis of their earning from each trip.