After seeking legal advice over the Uber scandal, Transport for London (TfL) have been told the taxi company's practice of using smartphones and GPS technology to determine fares does "comply with current law on taximeters'.
TfL issued a statement reading: "In relation to the way Uber operates in London, TfL is satisfied that based upon our understanding of the relationship between the passenger and Uber London, and between Uber London and Uber BV, registered in Holland, that it is operating lawfully under the terms of the 1998 PHV(L) Act.
"TfL's view is that smartphones that transmit location information (based on GPS data) between vehicles and operators, have no operational or physical connection with the vehicles, and receive information about fares which are calculated remotely from the vehicle, [and] are not taximeters within the meaning of the legislation."
The popular taxi-tracking smartphone app has previously prompted protests in the UK and Europe after traditional taxi drivers complained the service threatens their livelihoods.
Uber allows customers to tracks cars and book taxis with the app on their smartphone, with 3,000 registered drivers currently operating in London alone.
On Wednesday 11 June, more than 30,000 black cab and limo drivers between London and Berlin stopped for a "go-slow" protest, blocking many tourist areas in the process.
Jo Bertram, Uber's UK and Ireland general manager, said the protest hasn't harmed take-up of its services: "Londoners are voting with their fingers, tapping the app in support of new and innovative services as we see our biggest day of sign-ups in London today since launch two years ago.
"In fact, today we're seeing an 850 per cent increase in sign-ups compared to last Wednesday. The results are clear: London wants Uber in a big way," he said, at the time.
Critics of the app have warned it may lead to unlicensed cabs being accidently booked, while London's cab drivers have complained that Uber taxis are using an app to determine fares, which is the equivalent of a taxi meter and illegal in the capital for vehicles other than black cabs to use.
"We have nothing against competition but we feel that Transport for London has failed Londoners by allowing Uber to operate outside the law," said Steve McNamara, of the Licensed Taxi Drivers' Association.
TfL has effectively washed its hands of the row, by declaring that it's up to the courts to decide whether or not the widespread use of Uber is lawful.
Director General Simon Walker of the British Institute of Directors has objected to the protests, saying: "Black cabs have been a symbol of London for many decades, known across the world. But symbols, no matter how iconic, cannot be allowed to stand in the way of innovation. Uber and its rival apps are an example of the positive disruption new technology brings, offering consumers new choices about how to travel."
