Uber just lost its license in London

  22 September 2017    Read: 1102
Uber just lost its license in London

Transport for London on Friday announced that it was not renewing Uber’s licence to operate in the city dealing a sharp blow to the ride hailing app, tens of thousands of UK-based drivers and a sprawling customer base.

In a damning statement, the transport authority said that its regulation of London's taxi and private hire trades is designed to ensure passenger safety.

It said that private hire operators must meet rigorous regulations and that it had concluded that "Uber London Limited is not fit and proper to hold a private hire operator licence".

TfL said that it considers that Uber's approach and conduct “demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”.

Its concerns relate to Uber’s approach to reporting serious criminal offences and its approach to how medical certificates are obtained, among other things.

The current licence expires on 30 September. Uber can appeal the decision within 21 days and will be able to continue to operate until that appeal process has been exhausted.

The California-based company, that was founded just over eight years ago, has been under intense fire from a growing army of critics in the UK, who claim that it is unfairly skewing competition and that it has not done enough to crack down on incidents of violence involving its drivers.

The Licensed Taxi Drivers Association, which has been one of the most vocal critics of Uber in London, praised Friday's decision and said that TfL had put public safety first.

“Since it first came onto our streets Uber has broken the law, exploited its drivers and refused to take responsibility for the safety of passengers,” Steve McNamara, the General Secretary of the LTDA said.

“We expect Uber will again embark on a spurious legal challenge against the Mayor and TfL, and we will urge the court to uphold this decision. This immoral company has no place on London’s streets”.

The GMB Union dubbed the move as a “historic victory”.

“As a result of sustained pressure from drivers and the public, Uber has suffered yet another defeat - losing its license to operate in London,” Maria Ludkin, GMB’s legal director said.

“No company can be behave like it's above the law, and that includes Uber. No doubt other major cities will be looking at this decision and considering Uber’s future on their own streets,” she added.

London is one of Uber's most established markets and Friday’s decision comes at a critical time for the group. It could also embolden regulators in other countries to take a fiercer stand against the group. Uber is already battling a slew of legal cases and challenges in several US states and has been forced to quit countries including Denmark and Hungary.

In June, founder Travis Kananick resigned as from his role as chief executive officer in the face of shareholder outrage over company culture.

Responding to Friday’s decision, Tom Elvidge, general manager of Uber in London, said that drivers and clients would be “astounded”.

“By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice. If this decision stands, it will put more than 40,000 licensed drivers out of work and deprive Londoners of a convenient and affordable form of transport,” he said.

“To defend the livelihoods of all those drivers, and the consumer choice of millions of Londoners who use our app, we intend to immediately challenge this in the courts.”

He said that drivers who use Uber are licensed by TfL and have been through the same background checks as black cab drivers.

“We have always followed TfL rules on reporting serious incidents and have a dedicated team who work closely with the Metropolitan Police.”

He said that Uber operates in more than 600 cities around the world, including more than 40 towns and cities here in the UK. This ban, Mr Elvidge said, "would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers”.

One of TfL's concerns relates to Uber's use of secret software known as "greyball". The company built it to avoid regulators. Uber on Friday said that "greyball" had never been used or considered in the UK for the purposes cited by TfL.

Dan Lewis, senior infrastructure adviser at the Institute of Directors, also said that it was important to consider the implications of shutting down Uber for London as a metropolitan city.

It urged Uber to clarify how it will meet the standards outlined by the regulator but also demanded that TfL pay heed to London’s “hard-fought and positive reputation as a hotbed for disruptive innovation and tech-driven competition”.

“Regulatory hurdles should not be an insurmountable barrier to allowing consumers to use products if they find them useful,” he said.

With 40,000 jobs at stake, he raised concerns about the human cost of the decision.

“TfL and Uber must come together to find a way through this because the bottom line is that competition driven by consumer choice is the cornerstone of the UK’s future economic success.”

London Mayor Sadiq Khan was among the supporters of the decision.

“All companies in London must play by the rules and adhere to the high standards we expect - particularly when it comes to the safety of customers,” he said. “It would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.”

Senior MP Frank Field, who submitted a report to TfL in December 2016 calling on them not to renew Uber’s licence without first insisting on improvements in the company’s business model, said that the decision “could be a game changer for the gig economy”.

Wes Streeting MP, Chair of the All Party Parliamentary Group on Taxis, called TfL’s decision "courageous” and said that it shows that “no company, however big and powerful, will be allowed to flout our laws and regulations or jeopardise Londoner's safety without facing serious consequences”.

“Uber has not shown itself to be a fit and proper operator. It stands accused by the Police of failing to properly handle serious allegations of rape and sexual assault of passengers. It had to be dragged through the courts to recognise its responsibility to provide even the most basic rights and protections to Uber drivers,” he said.

Smaller rival private hire operators welcomed the news too.

One called mytaxi, launched an instant promotion offering half-price rides "to undercut Uber on news that they are not fit and proper to operate".

“We believe that Uber’s business model is based on pumping large amounts of private equity money into maintaining artificially low prices in an attempt to drive out competition, in preparation for raising prices once it has gained a monopoly role in the market,” mytaxi’s UK general manager, Andy Batty, said.

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