A COURT ruling will see a host of London's private hire firms forced to reclassify their relationship with drivers and customers, potentially leading to significant price hikes.

The High Court yesterday declared the so-called 'gig economy' model of contracting, in which platforms like Uber and Bolt act as an agent to a 'contract' between driver and passenger, unlawful. Instead the firms will be required to enter into a contractual obligation with the passenger, effectively turning the driver from a contractor into an employee. The ride-hailing giant argued that its role was confined merely to that of an internet booking agent and that it was not a party to any contract for the provision of transport.

The ruling is the latest in a string of court decisions that have turned the market upside down. Earlier this year a group of Uber drivers won a Supreme Court case against the firm, a decision which in part prompted Uber to put in place employee rights like holiday pay and the minimum wage whilst driving.

Competitors including Bolt and Ola did not go as far.

The ruling could also mean the Treasury could demand Uber and others charge VAT, hiking prices to consumers by up to 20 per cent.

An Uber spokesman told City A.M. that the ruling has made the Supreme Court decision "clear". It said, "we're not the only player in town" and urged other operators to ensure drivers are treated fairly following this decision.

Yaseen Aslam, President of App Drivers & Couriers Union (ADCU), the body that defended the case, said: "This ruling confirms that, not only had [TFL] the powers all along but, in fact, they had the duty to act on these powers but failed to do so. The Mayor of London must now order an urgent review of TFL to find out what went wrong".

(c) 2021 City A.M., source Newspaper