An illustration of Uber ride-hailing app page showing a trip to be taken in central London on November 25, 2019.
(Picture: AFP via Getty Images)Londoners could be set for another ride sharing price hike after Uber lost a court battle which will force them to start charging VAT on rides.
Last February, the High Court ruled that Uber is liable to pay VAT in the UK.
The High Court upheld the ruling in December, meaning operators now need to enter a contract with passengers as opposed to previously entering into a relationship with them.
Industry sources told The Telegraph the tax would inevitably be passed on to customers, raising prices by up to 20 per cent.
Transport for London (TfL) said it was working “with all operators to ensure they satisfy the requirements to hold a private operator licence”.
“We are not pressuring anyone to make the changes, we are just working with operators to ensure they comply.”
Uber has insisted it will comply with the new VAT charge while rivals Bolt and Ola may also be required to introduce the fee.
A spokesperson for Uber said at the time of the court ruling in December: "Every private hire operator in London will be impacted by this decision, and should comply with the Supreme Court verdict in full."
This comes as passengers were hit by a 10 per cent price increase in November as the operator attempted to attract drivers back who had left the business.
TfL is the authority which issues licences for private hire operators in London.
The operator had previously suspended Uber’s licence, which runs out next month.
It comes as London mayor Sadiq Khan announced fares would increase across the public transport network by an average of five per cent.
Commenting on the rise, Mr Khan said: “Public transport should be affordable to all, and I’ve taken bold action to ensure this since I became Mayor by introducing the unlimited Hopper bus fare and freezing all TfL fares from 2016-2021 - saving the average London household over £200.
“Since TfL’s finances were decimated by the pandemic, the Government has set strict conditions as part of the emergency funding deals to keep essential transport services running in London.”
