Dear Sir or Madam,
Proposed claim for judicial review by the London Cab Drivers Club Ltd
- As you know, we are instructed by the London Cab Driver’s Club (‘the LCDC’) of Block A, Unit A301.3, The Biscuit Factory, 100 Clements Road, London, SE16 4DG.
- On 5 June 2019, we wrote on the LCDC’s behalf asking Transport for London (‘TfL’) to investigate what appears to be a widespread, serious and systemic problem involving both Uber London Ltd (‘ULL’) which, as you know, holds a London private hire vehicle (‘PHV’) operator’s licence and its sister company, Uber Britannia Ltd (‘UB’).
- The problem has two elements. First, UB holds PHV operators’ licences granted by various local licensing authorities around the UK under s.55 of the Local Government (Miscellaneous Provisions) Act 1976 (‘the 1976 Act’). However, the LCDC has learned that UB does not, in reality, make provision for the invitation or acceptance of bookings for Uber vehicle from many of the premises in respect of which those licenses have been granted. The premises from which no provision is made, known in the taxi trade as ‘ghost offices’, are not staffed at all or have a very limited staff presence (for instance, staff may call in once a week to collect post or possibly make local records). The LCDC understands that most of UB’s s.55 licensed offices are ghost offices.
- The second element of the problem is ULL’s role in all of this. Instead of making provision for the invitation or acceptance of bookings for Uber vehicles from the ghost offices either ULL or UB make that provision using a combination of the Uber App and staff and computer equipment located at ULL’s operator premises in London. This is unlawful as our 5 June 2019 letter explained. The 1976 Act requires licenced operators such as UB to make such provision from locally licensed operators’ premises. Section 55A of the 1976 Act (which was added by s.11 of the Deregulation Act 2015) allows a licenced operator outside London who has already accepted a booking in the manner contemplated by the statute to then subcontract with another person to provide a vehicle to carry it out by supplying a vehicle, including by subcontracting with a London operator. However, that exception is narrowly and carefully drafted. It does not permit a non-London operator such as UB to accept non-London bookings in London, nor does it allow a London operator such as ULL to accept those bookings directly.
- You responded to the 5 June 2019 letter on 4 July stating that our “concerns are directed at UBL’s operations under the 1976 Act, for which TfL is not responsible… Licensing authorities outside London are responsible for ensuring compliance by their operators with the 1976 Act and any licenses granted under that legislation”. You invited us to take up the LCDC’s concerns with non-London licensing authorities, or direct with UB.
- Your response was unlawful, as is TfL’s ongoing failure to investigate ULL’s role in respect of ghost offices. In summary, that is because TfL has a statutory responsibility to regulate ULL under the Private Hire Vehicles (London) Act 1998 (‘the 1998 Act’) and:
- if, as appears to be the case, ULL is making provision for the invitation or acceptance of bookings for Uber vehicles in respect of non-London bookings, then it is committing licensing offences contrary to s.46(1)(d) and (2) of the 1976 Act many times each day, which would seriously call into question whether ULL is a fit and proper person to continue to hold a London operators’ licence for the purposes of s.3(3) of the 1998 Act;
- alternatively, if UB is evading local licencing regulation by making provision in London for the invitation or acceptance of bookings for Uber vehicles in respect of non-London bookings, that would also call into question ULL’s fitness and propriety because:
- in deciding to refuse ULL a London operator’s licence in September 2017, TfL correctly recognised that fitness and propriety under s.3(3) embraces matters such as the evasion of regulation in licencing jurisdictions regimes outside London (indeed aboard) and is not confined to the actions of ULL alone, especially given the corporate structure of the Uber group of companies; and
- TfL agreed special conditions with ULL as regards its ‘probationary license’ (granted as a result of the appeal determined by Senior District Judge and Chief Magistrate, Emma Arbuthnot on 26 June 2018 (‘ULL’s London Appeal’)) which expressly cover evasion of regulation in other jurisdictions, including (but not limited to) evasion using ULL’s software.
- TfL is about to redetermine whether ULL is a fit and person to hold a PHV operator’s licence because ULL’s probationary licence expires next month. TfL must approach that decision properly taking into account relevant matters, which include those summarised above. Choosing, or failing, to do so is an unlawful abdication of TfL’s regulatory functions.
- The LCDC plans to challenge the decision which the 4 July 2019 letter communicates and the ongoing failure to investigate its concerns by means of a judicial review claim in the Administrative Court. This letter constitutes a letter before claim in accordance with the Pre-Action Protocol for Judicial Review. As such, it offers TfL the opportunity to reconsider and change its position on investigation so the planned claim becomes unnecessary.
- Please confirm receipt by return and let us have your substantive response no later than 10 September 2019.
Reference details and legal advisors
- Please confirm the identity of the solicitor handling this matter. The signature on the 4 July 2019 letter is illegible and the name underneath, “Mayor of London”, is clearly not the signatory.
- Correspondence should be directed to John Halford, Partner, who can be contacted on 020 7833 4433 or via email at email@example.com. Please mark all correspondence relating this matter with reference 264550/1/JHL.
Details of the matter being challenged
- The 4 July 2019 decision and/or ongoing failure to investigate the LCDC’s concerns as set out in the 5 June 2019 letter.
Interested parties to the proposed claim
- The LCDC considers ULL and UB to be interested parties to the proposed claim and we will copy this correspondence to their solicitors, Hogan Lovells, Atlantic House Holborn Viaduct, London EC1A 2FG. If you consider there are other interested parties to this claim, please identify them in your response.
Factual background to the claim
- Please see paragraph 5 above and paragraphs 2 to 4 and 25 to 31 of our 5 June 2019 letter.
- Two points from that letter bear emphasising.
- First, as discussed at paragraphs 13 to 16, a locally based operating centre model is an intrinsic part of the scheme established by the 1976 Act in order to facilitate regulation by local licensing authorities.
- This is accepted by TfL. Ms Chapman’s London Appeal evidence is useful in one other respect. At paragraph 13 of her she said this by way of an explanation of the structure of the current UK licensing regime:
“PHV operator’s licence shall not in London accept a private hire booking other than at an operating centre specified in his licence. A London PHV operator that contravenes that provision is guilty of an offence (section 4(5) [EX1/C/2/99]). I understand that the reason why only licensed operators can accept private hire bookings, and only at specified operating centres, is that Parliament considered it important that such bookings are accepted by persons who are fit and proper to fulfil the role. A fit and proper operator will (amongst other things) pay sufficient regard to public safety, keep proper records, handle complaints appropriately and be subject to inspection and regulation.”
- In this way, Ms Chapman correctly recognised the links between the means by which Uber group companies accept of bookings, acceptance at specified operating centres, ULL’s fitness and propriety as an operator and TfL’s regulation of ULL in the public interest.
- Secondly, in her first statement at paragraphs 311 to 341, Ms Chapman also explains how ULL’s bookings have been made since March 2018. On the face of things, the arrangements apply equally to non-London bookings purportedly made through UB as a local 1976 Act-licensed operator. If so, ULL is both making provision for acceptance of non-London bookings and accepting those bookings.
ULL and other Uber group companies’ evasion of regulatory regimes
- As you are aware, on 22 September 2017, TfL took a decision that ULL was not a fit and proper person to hold a PHV operators’ licence in London. It was based on three factors:
- ULL had misled TfL in 2014 as to the process by which Uber vehicle bookings are accepted through the Uber app;
- as regards a piece of software called ‘Greyball’ which is open to misuse by Uber group companies to avoid regulatory oversight:
“ULL had assured TfL that Greyball had not been used for the purposes of evading regulatory enforcement in London. However, TfL did not consider that ULL had been open and transparent about Greyball, despite having been given ample opportunity to state its position clearly. In particular, the extent to which those responsible for Uber’s operations in London were aware of or involved in decisions about the use of Greyball in other jurisdictions only became clear after repeated and persistent questioning from TfL.”
(see paragraph 52(b) of the first statement of Helen Chapman for the London Appeal); and
- ULL had demonstrated a lack of corporate responsibility in relation to a number of other issues with potential public safety implications.
- The second of these factors is important in the present context because it illustrates the proper scope of TfL’s regulatory responsibilities under s.3(3) of the 1998 Act. Ms Chapman elaborated on this elsewhere in her evidence for the London Appeal: see, for example, paragraphs 122 to 162 of her first statement. Significantly, she rejects ULL’s repeated argument that use of Greyball outside the UK by other Uber group companies had no relevance to ULL’s fitness and propriety. For instance, at paragraph 134 of her first statement, she states (our emphasis):
“I consider that it is relevant to ULL’s fitness to be a licence holder that its previous director holds directorships in other countries where there is a possibility that Greyball technology has been used for the purposes of interfering with or impeding regulatory enforcement. It has been admitted by ULL that Mr van der Woude had authority to authorise the use of Greyball technology in other jurisdictions by virtue of his position within the Uber group.”
and at paragraph 248 to 263 noted that Greyball’s use “in other jurisdictions” was a matter that remained of concern. This issue is also discussed in the judgment on the London appeal at paragraphs 11 and 24.
- We also note that when the London Appeal was heard, ULL had accepted TfL was right to conclude it had not been a fit and proper person to hold a PHV operator’s licence in September 2017. Its position was that it had reformed itself since then and adopted a different culture, including accepting the need for regulation, to the extent that TfL’s concerns were historical. That was accepted in the London Appeal judgment (and recently endorsed by the Divisional Court). However, ULL also agreed that its future regulatory compliance in other jurisdictions was a matter for TfL to assess in relation to its fitness and propriety. That is clear from clauses 3, 7, 8, 9 and 13 of the probationary licence granted as a result of the appeal. For instance, clause 8.b. requires ULL to report to TfL any:
“… use or proposed use by ULL, UBL, Uber BV, UTI or any other affiliated Uber Group company (“an Uber Company”) in any jurisdiction where a Relevant Person is or has been employed or engaged by an Uber Company at the time of such use or proposed use of any software, tool or other mechanism (including Greyball and Ripley) (i) to interfere with or evade any regulatory enforcement action or (ii) for any improper purpose. For these purposes ‘proposed use’ means a use proposed or endorsed (whether implicitly or explicitly) by a Senior Manager or Director.”
and clause 9 states:
“ULL shall not use any software, tool or any other mechanism to interfere with or evade any enforcement action by a regulatory or law enforcement authority, including the licensing authority.”
Non-London operators’ licenses
- See paragraphs 10 to 20 of our 4 June 2019 letter.
TfL’s responsibilities as ULL’s regulator
- TfL was established by s. 154 of the Greater London Authority Act 1999. Its functions include licensing private hire operators, drivers and vehicles in London, under the 1998 Act.
- Before it grants or renews a PHV operators’ licence, TfL must be satisfied that the operator is a “fit and proper person” to hold a licence. In McCool v Rushcliffe BC 1998 WL 1043984, Lord Bingham CJ held that a licensing authority must have a good reason for determining that an applicant is not fit and proper, but may take into account any factor that a reasonable and fair-minded decision maker may rely on. At §25 he said this:
“What will be (or may be) a good reason will vary from case to case and vary according to the context in which those words appear… it is appropriate for the local authority or justices to regard as a good reason anything which a reasonable and fair-minded decision maker, acting in good faith and with proper regard to the interests both of the public and the applicant, could properly think it right to rely on.”
- Misconduct by a would-be licence holder, including in a different corporate guide will always be a relevant factor: see R v Knightsbridge Crown Court, ex parte International Sporting Club  QB 304, 318.
- Where, as here, a licence is granted on a ‘probationary’ basis expressly intended to allow an operator to demonstrate that past concerns about its fitness and propriety have been addressed, TfL will need take future decisions very carefully, on a fulling informed basis after appropriate investigations are concluded. The duty identified in Secretary of State for Education and Science v Tameside Metropolitan Borough Council  AC 1014 will be particularly onerous.
The legal basis for the proposed claim for judicial review
- As summarised above, the proposed claim has two linked bases. Both arise from TfL’s statutory responsibility to regulate ULL under the 1998 Act which were correctly described by Ms Chapman in the London Appeal.
- TfL must satisfy itself of ULL’s fitness and propriety, having regard to a broad range of factors including, but not limited to, those listed in its policy. “[A]nything which a reasonable and fair-minded decision maker, acting in good faith and with proper regard to the interests both of the public and the applicant, could properly think it right to rely on” is relevant: see McCool, paragraph 23 above.
- Misconduct by ULL or another Uber group company will certainly be relevant: see International Sporting Club, paragraph 24 above. On any view, misconduct would embrace large scale, systemic breaches of licensing law, i.e. the 1976 Act directly by ULL in other jurisdictions.
- Our 5 June 2019 letter set out a credible, evidence-based prima facie case that ULL is using software to make provision for the invitation or acceptance of bookings for Uber vehicles in respect of non-London bookings. Some of the evidence comes from TfL’s principal witness in the London Appeal, Ms Chapman. If ULL is doing so, it is committing offences contrary to s.46(1)(d) and (2) of the 1976 Act many times each day. That a matter that is directly relevant to ULL’s fitness and propriety as a London PHV operator and TfL has accepted as much in the past. This is put beyond doubt by the terms of ULL’s probationary licence: see paragraphs 22 and 27 above.
- It is not lawfully open to TfL to abdicate its investigatory and regulatory functions in respect of these matters on the basis that local authorities could investigate them. Only TfL can determine whether ULL is a fit and proper person to hold a London operator’s licence given ULL’s role in making provision for the invitation or acceptance of bookings for Uber vehicles in respect of non-London bookings.
- Alternatively, if UB is somehow making provision from its non-London ghost offices for acceptance of non-London bookings using the Uber App, contrary all appearances, that in itself is not sufficient to meet the criteria of the sub-contracting exception. UB would need to also be ‘accepting’ those bookings itself under s.55A(1), which is not what Ms Chapman describes as happening in her first statement. Only then would UB be permitted to sub-contract with ULL to provide vehicles to carry out those bookings.
- Evasion of regulation by Uber companies in other jurisdictions will be relevant to ULL’s fitness and propriety, as Ms Chapman’s own evidence in the London Appeal repeatedly says: see paragraphs 16 to 19 above. Even more specifically, misuse of any software by ULL or UB to evade regulatory oversight in other jurisdictions will be relevant to ULL’s fitness and propriety: see paragraph 22 above.
- It is no answer to say that a local authority in which UB holds a PHV operators’ licence can take action against UB if it is breaching the 1976 Act. That does not change TfL’s responsivities to regulate ULL generally and in line with the terms of its probationary licence.
The action that TfL, as proposed Defendant, is asked to take
- TfL is asked to confirm it will:
- promptly and fully investigate the LCDC’s concerns as set out in the 5 June 2019 letter; and
- reach and communicate (including to the LCDC) an evidence-based conclusion on them;
before determining any future ULL PHV operators licence application.
Alternative Dispute Resolution (‘ADR’) proposal
- The LCDC is willing to engage in ADR in the form of a confidential roundtable discussion of this claim with TfL’s representatives, provided that can happen expeditiously. We remind you of your obligation to give meaningful and clear reasons if you decide to decline such an ADR offer: see PGF II SA v OMFS Company Ltd  EWCA Civ 1288.
Information and documents sought
Please provide the documented analysis of ULL’s software undertaken in 2018 and any other documents held by TfL that have a bearing on ULL’s role in making provision for the invitation or acceptance of bookings for Uber vehicles in respect of non-London bookings directly or in any way that assists UB.
Please acknowledge safe receipt of this letter promptly and provide a substantive response by no later than close on 10 September 2019, as requested above.