Getting a taxi back from a hospitality venue will not become more expensive after a court ruled that Uber’s rival operators will not have to pay 20% VAT on their profits outside London. 

The UK Supreme Court ruled that private-hire operators do not enter into a contract with passengers, dismissing an Uber appeal. 

Private-hire firms declared the verdict to be a “triumph for the sector” after a three-year legal battle, which they had said could end with fares rising sharply for passengers. Uber had brought the case after a 2021 Supreme Court decision that its drivers were workers, which had an impact on its tax and other obligations. 

The company sought a declaration that private-hire taxi operators enter into a contract with passengers and the high court in London ruled in its favour in 2023. 

That decision meant that operators would have to pay VAT at 20%, but the ruling was reversed by the court of appeal in July last year after a challenge by the private hire operators Delta Taxis and the platform Veezu. 

Uber appealed to the Supreme Court, which unanimously dismissed the company’s case. 

The Veezu chief legal officer, Nia Cooper, said: “This decision is a triumph for the UK private-hire sector. The unanimous verdict ends a three-year legal battle and confirms that operators can continue to choose which business model they adopt to run their business.” 

She said the outcome would protect passengers from threatened fare increases and lessen the burdens on licensing authorities.