Uber v TfL: Could Uber seek judicial review on the grounds of political interference

Brett Wilson LLP solicitor Thomas Burton Wills asks whether TfL’s decision not to renew Uber’s private hire vehicle operator licence can be challenged on the grounds of political interference with supposedly independent decision-makers.

The decision of TfL not to renew Uber’s operator licence for private vehicle hire in London is undoubtedly a momentous one, which many will see as a political flashpoint between two competing models: left and right, unions vs corporates, monopoly vs free-market, Hackney carriages vs new technology.

However, it is also an opportunity to revisit some of the principles of judicial review and the role of the courts in deciding conflicts between the rule-makers (Parliament) and the decision-makers (Government).  It also highlights an important aspect of decision-making, which is that political motivations are irrelevant and should not be taken into account when coming to the decision.

Legal Framework

TfL’s powers to grant and revoke a licence for private hire vehicle (PHV) operators are contained within the Private Hire Vehicles (London) Act 1998, specifically section 3 which provides:

“S. 3(3) the licensing authority shall grant a London PHV operator’s licence to the applicant if the authority is satisfied that (a) the applicant is a fit and proper person to hold a London PHV operator’s licence…” [emphasis added]

Rationale for Decision

Although the full report into the reasons for TfL’s decision has not been released, the ‘fit and proper’ terminology is adopted in their press release, along with a number of reasons why it does not consider Uber to be fit and proper.  These reasons, along with the applicable statutory standards are set below:

Appeal

In May 2012, TfL granted Uber a PHV operator licence for a period of five years that lasted until May 2017.  TfL then granted Uber a 4-month temporary PHV operator licence while it reviewed its renewal application.  On 22 September 2017, TfL announced via a press release on its website that it would not be issuing Uber with a further PHV operator licence.  The result is that on 30 September, Uber’s PHV licence came to an end.

Uber has lodged an appeal again with the Westminster Magistrates' Court pursuant to s.25 Private Hire Vehicles (London) Act 1998.  Uber is still able to operate pending the outcome of the appeal(s).

Should Uber be unsuccessful in its appeal to the Magistrates’ Court, then it will be entitled to bring judicial review proceedings in the Administrative Court.

Review of Decision

The traditional grounds for judicial review are:

• Illegality – the decision-maker misunderstood the law or exercised a power it did not lawfully have;
• Irrationality – no rational decision-maker could ever have come to such a decision;
• Improper procedure – failure to observe statutory procedures or failure to give adequate reasons for the decision.

Recent case-law have added the grounds of:

• Legitimate expectation – where decision-making bodies issue guidance and the applicant has relied on that guidance;
• Breach of the European Convention on Human Rights.

TfL clearly has a prima facie lawful basis for coming to its decision not to grant Uber a further PHV operator licence, which are the public-protection reasons as outlined above.  However, Uber could try to persuade the Court that the decision made by TfL was illegal on the basis that it was made for an improper purpose – i.e. it was not based on TfL’s stated public-safety reasons, but was motivated by outside political influence – or alternatively that there were dual purposes to the decision and that the unlawful purpose (i.e. political influence) was the dominant one.

There is a general principle that decision-makers should not act in an arbitrary or capricious way, nor should their decision be subject to personal antipathy to the applicant or their political views.  The classic instance of political interference was when the party in charge of a city council decided to sell council-owned properties in the hope that the purchasers of those homes would be more likely to vote in favour of that party (Porter v Magill [2001] UKHL 67).  The House of Lords found that it was unlawful to exercise a public power in support of party political motivations.

In its favour, Uber can point to is history of having passed all previous compliance inspections to show that the public-safety grounds stated by TfL are neither justifiable reasons for refusal to grant its licence nor are they TfL’s true reasons for doing so.  Uber’s difficulty may be in finding evidence to prove to the Court that TfL was motivated by other political purposes, what those purposes were exactly, and whether TfL was acting under outside instructions and from whom.  However, TfL is under a duty of candour to give a true and comprehensive account of the decision-making process. Whilst the normal disclosure regime does not apply to judicial review cases, it is good practice for public bodies to exhibit all relevant documents.

A further factor is the interplay between the decision in 2016 that Uber’s drivers are considered to be employed and the public-safety grounds relating to medical certificates and DBS checks.  To what extent does it follow from the 2016 decision that Uber is obliged to check its employees for their medical certificates and DBS checks?  Can Uber successfully reignite its ‘self-employed’ argument to avoid this responsibility?

Conclusion

Uber faces the prospect of an overnight collapse in its London business by the loss of its PHV licence.  Uber's shareholders are not the only ones with an interest in the matter.  There are believed to be 40,000 Uber drivers operating in London, used by some 3.5 million passengers.  If TfL is genuine in its public-safety concerns then presumably it can reach some sort of agreement with Uber to allay its fears.  But if it really is simply a decision against Uber as too much of a market disruptor, then fighting it out in the Courts seems unavoidable.

Click here to find out how Brett Wilson LLP can offer civil litigation assistance.