Sep 22, 2017
Uber loses its license to operate in London
In a huge blow to Uber in the UK London's transport regulator has rejected its application to renew its license to operate in the city.
In a statement today TfL said it has concluded that Uber is "not fit and proper to hold a private hire operator licence".
"TfL's regulation of London's taxi and private hire trades is designed to ensure passenger safety. Private hire operators must meet rigorous regulations, and demonstrate to TfL that they do so, in order to operate. TfL must also be satisfied that an operator is fit and proper to hold a licence," it said.
The regulator added 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" — including for the following issues:
- Its approach to reporting serious criminal offences.
- Its approach to how medical certificates are obtained.
- Its approach to how Enhanced Disclosure and Barring Service (DBS) checks are obtained.
- Its approach to explaining the use of Greyball in London — software that could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties
TfL notes that the Private Hire Vehicles (London) Act 1998 includes provision to appeal a licensing decision within 21 days of it being issued, and confirmed that Uber can continue to operate until any appeal processes have been exhausted.
Uber is expected to appeal. A statement by the company is also expected shortly — we'll add it when we have it.
Update: In a statement, Tom Elvidge, general manager of Uber in London, said:
''3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision.
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.
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.
Drivers who use Uber are licensed by Transport for London and have been through the same enhanced DBS background checks as black cab drivers. Our pioneering technology has gone further to enhance safety with every trip tracked and recorded by GPS. We have always followed TfL rules on reporting serious incidents and have a dedicated team who work closely with the Metropolitan Police. As we have already told TfL, an independent review has found that 'greyball' has never been used or considered in the UK for the purposes cited by TfL.
Uber operates in more than 600 cities around the world, including more than 40 towns and cities here in the UK. This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.''
TfL said it will not be commenting further on the decision pending any appeal.
In a statement, London's mayor Sadiq Khan backed the regulator's decision, writing:
''I want London to be at the forefront of innovation and new technology and to be a natural home for exciting new companies that help Londoners by providing a better and more affordable service.
However, 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. Providing an innovative service must not be at the expense of customer safety and security.
I fully support TfL's decision – 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.
Any operator of private hire services in London needs to play by the rules.''
Uber's current license to operate in London is due to expire on September 30. The company claims to have some 3.5 million users in London and around 40,000 drivers operating on its platform.
Its prior license expired in May but was extended by TfL for four months as the regulator continued to deliberate over whether it should grant Uber another full five year term in the face of rising criticism against its business — including on issues such as workers' rights and public safety.
Earlier this month a cross-party group of MPs wrote to TfL urging it to strip the company of its license to operate in the UK capital, arguing the company has not shown itself to be a "fit and proper operator".
This followed accusations made this summer by London's Met Police that Uber has been failing to report sex attacks by drivers on its platform.
While last year the GMB Union helped bring two test cases to a UK employment tribunal accusing Uber of acting unlawfully by not providing drivers with basic workers' rights like holiday pay and the minimum wage.
In October the tribunal delivered its verdict, rejecting Uber's argument that the drivers in question were self-employed contractors — instead judging them to be workers, setting a legal precedent for other Uber drivers to challenge the company. (Although Uber has appealed the ruling.)
The union handed a petition to TfL this month urging it to insist on limits to Uber driver hours as a condition of renewing Uber's license .
The regulator has also faced pressure from London's black cab drivers over perceived inequality in the regulatory regimes of private hire vehicles and traditional taxis.
London's Licensed Taxi Drivers Association (LTDA) pressed TfL to reject a full renewal of Uber's license — arguing that its model is unlawful and risks public safety, while also pointing to rising numbers of private hire vehicles (PHV) in London as contributing to the city's congestion and pollution problem.
In comments supporting TfL's decision to strip Uber of its license, rival ride-hailing firm mytaxi — which in the UK works exclusively with licensed black cabs in London and has a driver network of over 17,500 — urged Uber passengers "back to black cabs" — and said it would be undercutting UberX prices until the end of the month with a minimum 30% discount off the meter fare.
"Customers deserve a seamless, technology-enabled fleet of professional taxis with drivers who are proud to offer a superior service and have devoted the equivalent of a degree to their trade. That's what mytaxi is proud to offer in London," said Andy Batty, UK general manager at mytaxi in a statement.
Earlier this week TfL also announced a new pricing system for PHV licenses, inflating fees for obtaining a license. TfL said the price rises were necessary to cope with dramatic increases in the numbers of PHVs on London's roads, noting it had not reviewed prices for PHV licensing since 2013.
The new regime brings in many more pricing tiers, depending on the size of the fleet being operated. The most expensive tier — for operators (such as Uber) that have more than 10,001 vehicles — has risen from around £3,000 under the prior licensing regime to £2.9M.
Last year, Uber steered off what could have been a major impediment to its business in London when TfL dropped a series of proposed changes to PHV rules — including imposing a five-minute minimum wait period between ordering and obtaining a ride.
Although the regulator did push on with other new measures, such as a formal English language requirement for drivers. Uber went on to challenge that in court — a challenge that was rejected in March (though Uber said it intended to appeal).
Zooming out to the European level, Uber is also awaiting what will be a highly significant ruling by Europe's top court on the classification of its business — to provide clarity to regulators on whether it's a transportation company or just an enabling tech platform as Uber tries to claim.
Earlier this year an influential advisor to the court deemed Uber's activity is indeed to provide transportation services, rather than merely being an intermediary platform. A final ruling by the court is expected three to six months after the AG's opinion — so likely by November.
While, in the U.S. Uber's use of proprietary software to try to evade regulators has also drawn the attention of US regulators — and is reportedly being investigated by the Department of Justice.
It's also under investigation by the FBI for use of another software program designed to target rival ride-hailing startup, Lyft.
While its business has also been rocked by a series of additional scandals in recent times — from accusations of an internal culture of sexism and sexual harassment, to accusations of IP theft from rival Alphabet, to an FCC investigation into privacy and security failures that resulted in Uber agreeing to two decades of external audits.