Reselling Ground Transportation Services by OTAs in the UK and EU
OTAs now sell airport transfers at scale. Bundled into itineraries, packaged with flights and hotels, presented as one seamless product. Convenient for passengers. Legally complicated for everyone involved.
Here's what's actually happening under the surface.
What "reselling a transfer" means in practice
Flights: OTA shows availability, takes commission, passes booking to airline. Simple.
Ground transport: different. The OTA sets the price. Picks the vehicle class. Presents the ride as its own product. Passenger pays the OTA. OTA pays a partner operator a net rate and keeps the margin.
That's not acting as an intermediary. That's acting as a transport provider. The law in the UK treats it exactly that way.
2023. High Court. Clear ruling.
The entity that accepts a passenger booking for a private hire vehicle is the principal contracting party. Not a platform. Not a middleman. The legal transport provider.
What this means:
Any company accepting PH bookings in the UK needs an operator licence. Local Government (Miscellaneous Provisions) Act 1976. London's private hire regulations. No licence — operating illegally. Doesn't matter how the OTA describes itself in its terms.
VAT: OTA sets the price, collects payment — HMRC treats it as the supplier. 20% VAT on the full fare. Not on a commission. On the full fare.
An OTA ignoring this prices rides 20% below compliant operators. Not because they're more efficient. Because they're not paying tax they owe. HMRC has pursued this against major ride platforms. Same argument applies to OTAs. Same exposure.
Working with OTAs as an operator
Two structures. Different implications.
Agency: operator gets full fare, pays OTA commission, keeps compliance responsibility. Licensing and VAT sit with the operator.
Principal: OTA sets retail price, keeps margin, pays operator net rate. OTA is the legal transport provider. Their licence. Their VAT. Their liability.
Knowing which structure you're in isn't optional. If the OTA acts as principal but doesn't hold the correct licence or account for VAT, the liability doesn't stay neatly with the OTA. It spreads.
Passenger protection
Consumer Protection from Unfair Trading Regulations 2008. Misleading commercial practices prohibited. Selling a transfer without including VAT in the price — potential breach. Presenting an unlicensed service as compliant — potential breach.
OTA terms disclaiming responsibility for the ride itself don't hold up when the OTA legally is the transport provider. Courts have ruled on this repeatedly. Controlling the booking and pricing while pointing at the driver when something goes wrong isn't a defensible position.
Package holidays: OTAs selling transfers as part of a package carry direct responsibility under the Package Travel Regulations for every component — including the transfer.
The market distortion
20% VAT gap. That's what separates a compliant operator from one that doesn't account for it.
Not better service. Not smarter operations. Regulatory non-compliance priced into every fare.
Licensed operators absorb the cost of doing it correctly. Non-compliant OTAs undercut them. Passengers get cheaper prices attached to lower standards and hidden legal risk.
TfL revoked Uber's licence until compliance standards were met. HMRC pursued VAT on ride platforms once courts clarified the law. The pattern is clear. Operate like a transport provider — get regulated like one.
For operators choosing OTA partners: compliance record matters as much as booking volume. A partner cutting corners doesn't keep the liability to itself.
The short version
Model works when structured correctly. Licensed partner, VAT included, honest terms.
When those conditions aren't met: real legal exposure, real competitive distortion, real risk for operators and passengers both.
How the arrangement is structured isn't a detail. It's the whole thing.
