Transport for London has defended its decision to grant mini cab operator Uber a private hire licence in the wake of criticism from Labour MP Margaret Hodge.
Mrs Hodge represents the London constituency of Barking and is also chair of the Public Accounts Committee which last year examined the use of overseas entities to reduce tax liabilities.
In a letter to Mayor Boris Johnson, she suggests Uber is “competing unfairly” with other Taxi and minicab operators by basing its bookings and payments arm, Uber B.V., in the Netherlands.
This, Hodge says, “enables Uber to pay corporation tax in the Netherlands and not in the UK” and therefore allows the firm to “unfairly undercut London operators by opting out of the UK tax regime”.
The MP suggests TfL may be “inadvertently” allowing the firm to engage in “tax avoidance” by not insisting Uber B.V. be based in London and hold a Private Hire Vehicle licence.
Uber points out that it “complies with all applicable tax laws” and that the entity responsible for fulfilling bookings, Uber London Limited, holds a valid PHV licence and was recently inspected by TfL for compliance with PHV regulations.
That inspection was sparked by complaints from the Taxi trade which is concerned Uber’s use of a GPS app to determine fares breaks the law.
Commenting on Mrs Hodge’s letter, TfL’s Garrett Emmerson said: “We do not have any powers in relation to an operator’s corporate structure and how or where they pay tax.
“We are fully satisfied that based on our understanding of the relationship between passengers and Uber London, and between Uber London and Uber BV, registered in Holland, that Uber is operating lawfully under the terms of the 1998 PHV(L) Act.”
An attempt to have the High Court review Uber’s use of an app to calculate fares stalled after taxi trade representatives instigated private prosecutions of Uber drivers, preventing the High Court from hearing TfL’s application.
