1. After many years involved in the Taxi and Private Hire industry, I was intrigued when Uber came to these shores, my intrigue was in regards to how they operated in its home country the USA and how its surge pricing worked.
2. I investigated Uber online and its operation in the USA and found that they use non licensed vehicles and drivers, which is allowed in some area’s due to their local legislation, and found that this suited the Uber model to great effect due to Uber requiring part time drivers and vehicles at peak times and not usually during the day when every-one was in their place of work.
3. Uber do not use non licensed vehicles in the UK, as rumours may lead people to believe, but they do however use vehicles and drivers licensed by local authorities who also work or represent a local company and switch over to Uber when it’s busy. This is something that Uber are happy for the drivers to do, and in fact have stated on a local radio station in Sheffield that they welcome this which then of course gives them the ‘part time’ drivers that they both desire at peak times and have used to great effect in the USA.
4. Unfortunately, this is also used when they say how many hours their average driver works on the Uber platform, which is somewhat a false truth because they know full well that the drivers move to the local company also during the week. Uber have been known to quote that drivers work as little as ten hours per week, which would be impossible for the driver to cover the fixed overheads of purchasing and maintaining a vehicle along with the insurance and fuel that comes with it.
5. This use of drivers from the pool of locally licensed, established companies will of course reduce the service levels to which that company can provide to its regular customers if and when its pool of drivers are lost to the Uber platform due to its surging prices when demand is higher than supply. In other words at peak times when more customers than drivers are available.
6. Surge pricing, this intrigued me greatly simply because the idea is actually rather good for this industry and I will explain why.
7. The biggest problem within the Private Hire industry is that the majority of people all move at the same time, be this to and from work during peak traffic, school runs or going to the local pub or restaurant which of course they then all require a vehicle to take them back home at the same time also.
8. A Private Hire company will take both advanced and Ad Hoc bookings from its customers, but this can and often does cause an issue with supply and demand. The result from this issue is that bookings will run late, it’s almost an industry fact and acceptance to a degree.
9. This issue in peak times leads to customers having to wait or phone back and ask where their vehicle is.
10. Ubers model removes this, simply by the following steps, if a vehicle is available, the customer gets a car whereas if no vehicles are available then the customers App informs them to try again later.
11. Surge pricing is an Uber algorithm that monitors this supply and demand and when demand is exceeding supply, the algorithm will put a surge factor onto the price of the job, giving the customer the option of accepting the surge and paying extra for the service or to simply wait until this surge has been removed to demand being less.
12. From my 22 years in the Private Hire industry and being involved in depth with various computer dispatch systems, the surge algorithm gave me plenty to consider and for the past five years I have looked on a daily basis for news articles, or interviews and such that would give me an insight into this simply because I could not see how this would work if Uber or any other company using this model, actually accepted the booking first. How could they, it is purely based on supply and demand and not demand and supply.
13. The issue now is that the Local Government (Miscellaneous Provisions) Act 1976 clearly states at Section 56 (1)
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.
14. So how did Uber work this model, well the only way I could see it from my experience is if the booking was offered to the driver and the driver accepted the booking before it was accepted by Uber, just like when a customer approaches a driver and he agrees to take them and then informs the Operator that he works for to put the booking against his vehicle. This is known as back filling.
15. I therefore did an experiment with a friend of mine who had signed up to the Uber platform and in a remote part of the City I did the following actions on the customer App supplied by Uber.
a) I asked my friend not to log onto the system and attempted to make a request for a vehicle, the App asked me to try again later.
b) I then asked my friend to log into his driver App and again made a request, which was offered to him and he accepted.
c) I then asked him not to accept my request.
d) My customer App then told me that no vehicles were available and to try again later.
16. This supported greatly my theory of the driver accepting the booking and can be tested by any authority by simply going to a remote area and attempting to request an Uber through its App.
17. I took this information to Sheffield City Council but it was not acted upon, because they could not prove my theory of the driver accepting the booking without a computer programme specialist to look into the data on Ubers system.
18. I was set back by this news, but carried on looking for supportive evidence. Simply because knowing all the legislation in the UK protecting the public that use this industry, I could not see how a system designed abroad could go to various countries and meet all legal requirements.
19. I found information in July 2015 where UberCanada Inc, Uber B.V. and Rasier Operations B.V.had been taken to court by the City of Toronto (Canada) because Uber stated that they did not require licensed drivers in Toronto due to them not being a Transportation Company.
20. The judge residing the case (found here) stated that the Uber platform that can be downloaded world-wide and used in numerous countries was in fact a peer to peer platform and not a booking App because it simply matched the customer request with the nearest available driver and the driver accepted, therefore Uber did not require the equivalent of an Operator’s license or its drivers to be licensed because Uber did not accept the booking and therefore its service was not a Taxi or Limousine Service which would require licenses in that City. This supports my theory.
21. This led me to locate an earlier case in April 2015 again in Canada, where the City of Edmonton also took Uber Canada to court (found here) where in Section 9 it states (paraphrasing) that Uber Canada is nothing to do with Uber B.V. that is based in the Netherlands and that again, the customer is put in contact with the driver to accept the booking.
22. In the UK, a recent Industrial Tribunal that involved Uber B.V., Uber London Limited and Uber Britannia Limited (found here) it was stated at Section 15 that ‘once a driver accepts, Uber London Limited confirms the booking to the passenger and allocates the trip to the driver’ which is as mentioned before back filling.
23. The witness statement by Jo Bertram (found here) in this Tribunal case states at Section 45 (quoted Verbatim)
“A booking is not accepted by ULL until a Driver has confirmed that they are available and willing to take it. Confirmation and acceptance then takes place by ULLalmost simultaneously”
It further clarifies (although a little more carefully worded) at Section 60 (quoted verbatim) “if theydo choose to take the trip, they will touch toconfirm to ULL that they are available andwilling to take the trip. Having done so, ULLwill accept and confirm the booking to the Passenger on behalf of the Driver, and almostsimultaneously and instantaneously allocate thetrip to the Driver.”
24. On both counts, Jo Bertram who is the Regional General Manager for the UK, Ireland and Nordics states that ‘almost simultaneously’ the booking is recorded (back filled) by Uber. This is always mentioned after an explanation of the driver accepting the booking and the words almost simultaneously simply means after and not before, regardless of the time between such actions.
25. Further information gained due to a FOI I sent to Gateshead Council (found here) since learning that Uber had walked away from an application that it made there, several questions have now been raised and left unanswered by Uber, these questions support the link between Uber, Uber BV, the driver and the customer.
26. The questions are in regards to the actual contractual terms that each party must agree to in order to use the Uber platform.
1. If Uber has no involvement in the contract between the customer and the driver of the vehicle, who accepts the booking?
2. If Uber accepts the booking, how does it have no involvement in the contract between the customer and the driver?
3. If Uber considers that the driver accepts the booking, does it accept that the driver must also hold a Private Hire Operator licence to accept bookings? If this is the case, what steps will Uber take the ensure that all bookings are only given to licensed operators?
(Note – reference to ‘Uber’ is to Uber BV, being the company that customers and drivers enter into agreements with for use of its app platform.)
Further questions that were asked by Gateshead Council follow;
UBL was asked to clarify how the provisions in the contract for use of the Uber app by customers which purport to exclude Uber as a party to the contract between the customer and the driver could validly be interpreted as anything other than an unfair contract term.
What is the effect of the new contract that is created between the consumer and the driver? Is it to the consumer's benefit? What are the provisions of the new contract, e.g. does the consumer have any written rights under the new contract? Are they provided with the name and address of the person / business with whom they are contracting and given details of rights and responsibilities to each party by the new contract? Why does Uber do this?
Why no direct explanation was provided as to how the provision in the passenger contract excluding Uber as a party to the contract for the provision of transportation services booked through the Uber platform should not be deemed to be an unfair contract term by reference to schedule 2 of the Consumer Rights Act 2015?
Whether UBL would share the advice it had given to other Councils that had satisfied their concerns in relation to the above points?
UBL was asked to clarify whether it -
(a) accepts as operator that the contract for the hire of each vehicle is made with Uber and does not attempt to obviate those responsibilities by contracting out or creating secondary contracts between the passenger and driver
(b) maintains that the contract for hire exists between the passenger and driver, in which case each driver will need an operator licence; or
(c) has a third potential scenario to explain its operating model.
UBL was also asked to answer the following questions -
1. Why is the new contract created between the customer and driver necessary?
2. What are the terms of that contract?
3. What detail is the person making the booking given, at the time the contract is created, of–
a. The terms of the contract
b. How the contract changes Uber’s obligations as a private hire operator
c. The person or company with whom they are contracting for the ‘transportation contract’
4. How is the new contract either neutral or beneficial to the person making the booking?
5. When the customer is considering which vehicle to select from the app, what information are they given about the person they will be contracting with, to help them choose which case to select? Do they have sufficient information to, for example, avoid a transport provider that they do not wish to use?
27. My final information in support of my theory that Uber themselves do not accept the booking request, but rather the driver does was gained from an FOI to Reading Council (found here) where the officers stated:
“Officers are concerned that due to the way Uber works by listing the closest driver/vehicle to the customer, any vehicle from any borough within close proximity would be able to access the job and complete the booking.”
28. Furthermore, from the FOI stated above from Reading, the grant of and Operators License was refused. No challenge has been made by Uber against this refusal.
29. To summarise.
I believe that the information shown is enough evidence to prove that Uber do not accept the booking request of the customer, but the driver does. This then puts the driver the person responsible for the acceptance of the booking and in doing so is required by law to have an Operators License.
Basically, Uber operate illegally within the United Kingdom and should therefore, as has happened in numerous other countries throughout Europe be banned for the safety of the public, and the integrity of the trade which has served the British public within the laws that governs it for many, many years.
These laws were designed to protect the public, advances in technology do not make the laws out of date, or the purpose behind them. Technology can be written to work within the intention of the law, as many if not all other companies that produce this technology do so.
Should this be ignored, what is to stop a technology company from writing software that from the press of a button the driver has a booking automatically recorded from the vehicles position therefore circumventing Plying for Hire.
Lee Ward
ALPHA Chairman
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