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‘Monopoly previously enjoyed by black cabs was bad for the consumer’ says Minister at Uber debate

Updated: Mar 3, 2021

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Black cabs ‘were overpriced and Uber has been a thoroughly good thing for the market in London’ said one Government Minister during an open debate at the House of Lords.

During the Lord’s discussion on Monday which focused on Uber’s recent Supreme Court workers’ rights judgement, the Minister for Business, Energy and Industrial Strategy argued the private hire firm provided ‘tremendous choice’ especially in the capital and called the black taxi industry a ‘monopoly’.

Not all peers shared the same opinion though. In the questions put forward in the House, the Minister was urged to ‘ensure that Uber does not weasel out of its obligation to all drivers’.

Following a six-year battle Uber drivers were handed basic workers' rights which includes minimum wage and holiday pay.

Conservative Lord Blencathra was damning in his appraisal for the private hire operator. He said: “My Lords, everyone knows that Uber is a thoroughly disreputable and exploitative company, and I warmly welcome the Supreme Court’s decision.

“Will the Minister now ensure that Uber does not weasel out of its obligation to all drivers, past and present? Will he also encourage HMRC to go after it for its billions in back taxes, and will he bring forward urgent legislation to make sure that all companies in the so-called gig economy are no longer able to exploit the lowest-paid workers in this country?

“That is a thoroughly Conservative view of these things.”

Responding to the question, Lord Callanan, a Government Minister for the Department for Business, Energy and Industrial Strategy, instead shared his thoughts on London’s licensed taxi industry. He responded saying: “The noble Lord knows the tremendous admiration that I have for him, but I have to disagree with him on this. The thoroughly Conservative thing is that there is choice and competition in the market, and Uber has provided tremendous choice and competition, particularly in London. It is not just Uber— there are other apps as well.

“The monopoly previously enjoyed by black cabs was bad for the consumer. They were overpriced and Uber has been a thoroughly good thing for the market in London—so I disagree with the noble Lord on that one.”

The price of a licensed London taxi fare is set using a cost index process that takes into account the average cost of running a purpose built fully wheelchair accessible taxi. Transport for London (TfL) sets the tariff price for the public and drivers to use on a meter.

Anyone can become a licensed taxi driver if they complete a topographical test called the Knowledge of London (KOL). There is no cap in the number of people that can pass the test and go on to work as a taxi driver.

In further questions put to the Minister, Lord Taylor of Goss Moor said: “My Lords, the Minister will be aware that Uber has made statements suggesting that it believes that the ruling is limited only to a handful of individuals and that subsequent changes mean that it will not apply to current staff—but that is not the advice that others are giving.

“HMRC has statutory responsibility for enforcement of the minimum wage, and it can take action either on its own initiative or in response to complaints made online. If enforcement action is taken by HMRC, then it will be for Uber to prove that it has complied with its obligations, and the two-year limit on claims will not apply.

“Is HMRC expected to take that action, and is government encouraging it to do so?”

Lord Callanan responded: “The noble Lord will be aware that I cannot comment on individual cases, but, of course, HMRC is fully empowered and able to take all the action that it requires in order to get people to comply with the law.”

Labour Lord Monks asked: “Will the Government now enshrine the very welcome Supreme Court judgment in statute by including its principles, plus the availability of workplace pensions, in the long-promised but long-delayed new Bill on employment rights and the gig economy?

“Will they also reject the expected campaign by Uber and other global tech companies to reverse or limit the judgment and so strike a blow against bogus self-employment, with all the risks to the tax base and other problems that it incurs, and eliminate abuses in the gig economy?”

Lord Callanan said: “I make absolutely clear that the Supreme Court judgment is final, and Uber will of course need to align its business model to comply with it. Employers have a duty to automatically enrol qualifying workers into workplace pension schemes. This already extends to engagers of agency workers and those on temporary, fixed-term and zero-hours contracts.”

Lord Faulks said: “My Lords, I too welcome the decision of the Supreme Court. Those who have read the judgment of Lord Justice Leggatt will realise the detail which the court went into in deciding that, whatever the lawyers had devised, the reality of the relationship meant that the Uber drivers were in fact workers. I welcome the news that there is to be legislation, but I suggest that there are some occasions where the courts will have to deal with the reality. Even the best-drafted legislation will have to set out the principles. The courts here were doing precisely what they should do—applying the principles of the Act to the reality on the ground.”

Lord Callanan said: “The noble Lord has put the case very well. The Supreme Court’s decision is, of course, final. Uber will have to comply with that judgment, as everybody else has to comply with court rulings.”

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