Uber has updated its driver terms outside London to formally confirm its role as an agent, meaning VAT is applied only to Uber’s service fee and not the full passenger fare. The updated terms were issued directly to drivers via email. View the official Uber document here.
DM News Commentary
This change is all about one thing: making Uber’s position outside London absolutely clear.
By updating its driver terms, Uber is now explicitly defining itself as an agent rather than the principal supplier of the journey. In practical terms, this means Uber is confirming that the transport service is provided by the driver, while Uber simply facilitates the booking and charges a service fee for doing so.
That distinction matters hugely for VAT.
As an agent, Uber is only required to account for VAT on its commission, not the entire fare paid by the passenger. The updated terms remove any ambiguity by locking this position into the contract drivers must accept, ensuring Uber’s operating model outside London aligns with how most private hire businesses have always worked.
For drivers, this provides long-overdue clarity. It confirms there is no sudden 20% VAT liability on full fares being passed down the chain and no hidden reclassification of drivers as VAT suppliers by default. Earnings remain structured the same way: the passenger pays the fare, Uber deducts its service fee (plus VAT on that fee), and the driver receives the remainder.
From Uber’s perspective, the wording change is also a defensive move. By clearly defining itself as an agent in its contracts, Uber strengthens its position with HMRC and reduces the risk of future disputes over who supplies the journey and who carries the VAT burden. It removes grey areas that could otherwise be challenged later.
Crucially, this update applies outside London only, where licensing frameworks allow this agency model to operate cleanly. Drivers should understand that accepting these terms is Uber formally stating: we are not the transport provider here — you are.
While this change does not increase pay or reduce commission, it does remove a significant cloud that has been hanging over drivers for months. In an industry already under pressure from rising costs, regulatory changes and uncertainty, contractual clarity alone is a meaningful development.
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