ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
The Hon. Mr Justice Mitting
Strand, London, WC2A 2LL
B e f o r e :
Vice President of the Court of Appeal, Civil Division
LORD JUSTICE PATTEN
LORD JUSTICE FLOYD
| TRANSPORT FOR LONDON
|- and -
|(1) THE QUEEN ON THE APPLICATION OF
UBER LONDON LIMITED
(2) SANDOR BALOGH
(3) NIKOLAY DIMITROV
(4) IMRAN KHAN
(instructed by Transport for London) for the Appellant
Mr Thomas de la Mare QC and Mr Hanif Mussa (instructed by Hogan Lovells) for the Respondents
Hearing date: 20 February 2018
Crown Copyright ©
Lady Justice Gloster :
Uber's "click-to-call" Function
"Sometimes there's no substitute for talking to a real, live person. That's why we're introducing telephone support. Starting later this year, riders and drivers will be able to access trained support staff 24 hours a day, 7 days a week through a dedicated line."
"[w]hile this phone support will not be just for emergencies or safety-related issues, it is likely that for some non-urgent and low-impact issues, the automated voice-based system may redirect callers to our existing support channels of in-app messaging."
Statutory framework governing PHVs
i) improving the safety and security of all Londoners, including "ensur[ing] that journeys by taxi and private hire vehicle (PHV) are as safe as possible for passengers and drivers";
ii) improving transport opportunities for all Londoners, which includes: "improving accessibility" and in particular "overcoming the barriers that exist for some users", especially disabled Londoners, older and young people; "providing better information and communications"; and "improving the actual and perceived safety and security of transport services and travel"; and
iii) enhancing quality of life for all Londoners, including "improving journey experience".
"No person shall in London make provision for the invitation or acceptance of, or accept, private hire bookings unless he is the holder of a private hire vehicle operator's licence for London."
"(1) [TfL] may make regulations for any purpose for which regulations may be made under this Act (other than section 37) or for prescribing anything which falls to be prescribed under any provision of this Act (other than section 37).
(2) Regulations under this Act may –
(a) make different provision for different cases;
(b) provide for exemptions from any provision of the regulations; and
(c) contain incidental, consequential, transitional and supplemental provision."
The consultation process
"at all times during the operator's hours of business and at all times during a journey, the operator shall ensure that the passenger for whom the booking was made is able to speak to a person at the operating centre or other premises with a fixed address in London or elsewhere (whether inside or outside the United Kingdom) which has been notified to the licensing authority in writing if the passenger wants to make a complaint or discuss any other matter about the carrying out of the booking with the operator."
The customer benefits before the judge
Case law on proportionality
Article 49 and 54 TFEU
"[w]ithin the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital."
"[c]ompanies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States.
Companies or firms means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making."
Application of R (Lumsdon) v Legal Services Board
"[p]roportionality as a general principle of EU law involves a consideration of two questions: first, whether the measure in question is suitable or appropriate to achieve the objective pursued; and secondly, whether the measure is necessary to achieve that objective, or whether it could be attained by a less onerous method. There is some debate as to whether there is a third question, sometimes referred to as proportionality stricto sensu: namely, whether the burden imposed by the measure is disproportionate to the benefits secured. In practice, the court usually omits this question from its formulation of the proportionality principle. Where the question has been argued, however, the court has often included it in its formulation and addressed it separately." [emphasis added]
"[it] has been applied most frequently to measures interfering with the fundamental freedoms guaranteed by the EU Treaties. Although private interests may be engaged, the court is there concerned first and foremost with the question whether a member state can justify an interference with a freedom guaranteed in the interests of promoting the integration of the internal market, and the related social values, which lie at the heart of the EU project. In circumstances of that kind, the principle of proportionality generally functions as a means of preventing disguised discrimination and unnecessary barriers to market integration. In that context, the court, seeing itself as the guardian of the Treaties and of the uniform application of EU law, generally applies the principle more strictly."
"[w]here, however, a national measure does not threaten the integration of the internal market, for example because the subject matter lies within an area of national rather than EU competence, a less strict approach is generally adopted. That also tends to be the case in contexts where an unregulated economic activity would be harmful to consumers, particularly where national regulatory measures are influenced by national traditions and culture."
"'national measures liable to hinder of make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions: they must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which they pursue; and they must not go beyond what is necessary in order to attain it.' (para 37)" [emphasis added]
"establish that the restriction is the most appropriate of all possible measures to ensure achievement of the aim pursued, but simply that it is not inappropriate for that purpose."
"[a]s regards proportionality, however, it is necessary to establish that no other measures could have been equally effective but less restrictive of the freedom in question."
"[p]articularly in situations where a measure is introduced on a precautionary basis, with correspondingly less by way of an evidential base to support the particular restrictions imposed, it may well be relevant to its proportionality to consider whether it is subject to review in the light of experience."
"[the] burden of proof cannot be so extensive as to require the member state to prove, positively, that no other conceivable measure could enable that objective to be attained under the same conditions."
"where a relevant public interest is engaged in an area where EU law has not imposed complete harmonisation, the member state possesses 'discretion' (or, as it has sometimes said, a 'margin of appreciation') not only in choosing an appropriate measure but also in deciding on the level of protection to be given to the public interest in question."
"[t]his margin of appreciation applies to the member state's decision as to the level of protection of the public interest in question which it considers appropriate, and to its selection of an appropriate means by which that protection can be provided. Having exercised its discretion, however, the member state must act proportionately within the confines of its choice. A national measure will not, therefore, be proportionate if it is clear that the desired level of protection could be attained equally well by measures which were less restrictive of a fundamental freedom."
Ex-post facto reasoning
"But the margin of discretion may, of course, take on a rather different hue when, as here, it becomes clear that a particular measure is sought to be defended (at least in part) on grounds that were not present to the mind of the decision-maker at the time the decision was taken. In such circumstances, the court's role in conducting a scrupulous examination of the objective justification of the impugned measure becomes more pronounced."
"[o]bviously, if reasons are proffered in defence of a decision which were not present to the mind of the decision-maker at the time that it was made, this will call for greater scrutiny than would be appropriate if they could be shown to have influenced the decision-maker when the particular scheme was devised. Even retrospective judgments, however, if made within the sphere of expertise of the decision-maker, are worthy of respect, provided that they are made bona fide."
It was then held at , for the purpose of that appeal:
"the test to be applied is that of 'manifestly without reasonable foundation'. Whether that test requires adjustment to cater for the situation where the proffered reasons are the result of deliberation after the decision under challenge has been made may call for future debate. Where the state authorities are seen to be applying 'their direct knowledge of their society and its needs' on an ex post facto basis, a rather more inquiring eye may need to be cast on the soundness of the decision."
The judgment below
The issues on the appeal
i) Whether the judge erred in relying on the distinction between an emergency and a non-emergency contact facility?
ii) Whether the judge accorded TfL a proper margin of appreciation in this area?
iii) Whether the Voice Contact Requirement achieves a higher level of protection than the Emergency Telephone Alternative and achieves legitimate objectives beyond safety, such that the latter is not a less restrictive alternative?
iv) Whether the Voice Contact Requirement was a proportionate and lawful interference with Uber's freedom of establishment in any event and the judge erred in concluding otherwise?
v) Whether it was unlawful that TfL had not imposed a similar requirement on taxis?
Discussion and determination
Issue 1 - Whether the judge erred in relying on the distinction between an emergency and a non-emergency contact facility?
The additional benefits
Issue 2 - Whether the judge accorded TfL a proper margin of appreciation in this area? / Issue 3 - Whether the Voice Contact Requirement achieves a higher level of protection than the Emergency Telephone Alternative and achieves legitimate objectives beyond safety, such that the latter is not a less restrictive alternative?
Margin of Appreciation
Less restrictive alternative
i) First, neither of these submissions can be maintained in the context where Uber is planning to provide a "click-to-call" facility anyway.
ii) Second, the judge failed to recognise or consider that the scale of the costs imposed on operators correlates directly with the extent to which customers use the service. If Uber is correct that its technologically inclined smartphone users would not use the voice contact facility to contact their operator, the costs imposed by the Voice Contact Requirement would reduce as a result. I am persuaded that any realised costs indicate use of the facility and a real customer benefit, for which TfL was entitled to regulate.
iii) Third, following on from this, Mr de la Mare submitted that it was not justified to impose the extra cost of the telephone call on Uber or its customers when certain categories of complaint are dealt with more simply, speedily and cheaply electronically. I cannot accept this submission. It fails to recognise that TfL has identified real benefits to all customers, even in non-emergency situations, and ignores that the Voice Contact Requirement also applies to PHV operators other than Uber.
Issue 4 - Whether the Voice Contact Requirement was a proportionate and lawful interference with Uber's freedom of establishment in any event and the judge erred in concluding otherwise?
Issue 5 - Whether it is unlawful that TfL has not imposed a similar requirement on taxis?
"It is important at this stage to set out the material differences between mini-cabs and black cabs. A Law Commission Consultation Paper issued earlier this year (No 203) described the 'two-tier licensing system' justified by 'the very different characteristics' of the pre-booked market and the market for hailing and picking up at ranks:
i) As set out in paragraph 9 above, only black cabs can 'ply for hire' without pre-booking.
ii) Black cabs are subject to 'compellability', dating from the London Hackney Carriage Acts 1831 and 1853, which requires that where a black cab at a rank or in the street accepts a passenger, the taxi must take the passenger anywhere that he wishes to go, within a prescribed distance or up to a prescribed journey time. There is no such 'cab rank' obligation on a minicab.
iii) Black cabs are instantly recognised by reason of their shape and size and the illuminated TAXI sign. This is because they must comply with the Conditions of Fitness ("CoF"), which contain a number of standards (including the requirement for the illuminated sign). Currently only two vehicle makes comply with the CoF. Minicabs can be of any colour and any design: there are some 700 different makes and models of vehicles presently licensed.
iv) The fares of black cabs are strictly regulated and can only be charged by reference to a taxi meter. Minicabs are free to charge their own fares and are not metered. According to Mr Griffin, the founder and chairman of Addison Lee, Addison Lee's fares are on average 35% cheaper than black cabs: the fare to be paid is quoted when the minicab is booked, irrespective of the duration of the journey, while black cab fares will of course vary depending upon the length of time that the journey takes.
v) Black cabs are required to be adapted for wheelchair access. There are no accessibility requirements for minicabs.
vi) Before being licensed, black cab drivers must undertake the 'Knowledge of London' examination process, which can take two to four years to prepare for ("the Knowledge"). Minicab drivers must before licensing undertake a topographical test, which generally takes a day. Addison Lee voluntarily imposes more extensive training on their drivers, by a short attendance at their driver training school. Black cab drivers must pass the Driving Standards Agency Advanced Driving Assessment: there is no similar requirement for minicab drivers."
"Black cabs and PHVs both compete on the market for pre-bookings, and it is common ground that competition is affected by the bus lane policy on that market. If that market were the only one relevant, they would clearly be comparable and, consequently, the bus lane policy would be selective.
However, one cannot simply extract a part of the business model of an undertaking and then limit the comparison with another undertaking to the segment thus extracted. Certainly that is true for the taxi business as well, certain specificities of which make it unjustified to limit the assessment of comparability to the market for pre-bookings alone.
In brief, taxis provide a service which supplements the existing methods of public transportation and which, in some ways, can arguably be assimilated to a universal public service. At a time when methods of communication were less developed, being able to hail a taxi from the street or to pick one up from a cab rank was an essential alternative to the other methods of transportation available. This is the reason why Black Cabs traditionally have a monopoly on 'ply for hire' journeys, and the same reason why taxis in many cities across Europe enjoy similar privileges, including the right to use bus lanes."
"In that regard, it must be stated, first, that the identification of the factual and legal situation of Black Cabs and minicabs cannot be confined to that prevailing in the market sector in which those two categories of conveyors of passengers are in direct competition, namely the pre-booking sector. It cannot seriously be doubted that all the journeys made by Black Cabs and minicabs are liable to affect the safety and efficiency of the transport system on all the road traffic routes in London.
Secondly, it must be taken into consideration that, by virtue of their legal status, only Black Cabs can ply for hire; they are subject to the rule of 'compellability'; they must be recognisable and capable of conveying persons in wheelchairs, and their drivers must set the fares for their services by means of a taxi meter and have a particularly thorough knowledge of the city of London.
It follows that Black Cabs and minicabs are in factual and legal situations which are sufficiently distinct to permit the view that they are not comparable and that the bus lanes policy therefore does not confer a selective economic advantage on Black Cabs."
Lord Justice Patten:
Lord Justice Floyd: