Uber Loses London Licence

A decision by Transport for London (TfL) means that ride-hailing service Uber has lost its licence to carry passengers in London over safety and security failures.

Why?

According to TfL, it had identified a pattern of failures by Uber, including breaches that had risked the safety of passengers and drivers, plus some uninsured journeys. 

Prior to the decision to remove its London Licence, Uber had pledged to improve its drivers’ safety training and provide a direct connection to emergency services.

Not The First Time

Uber had its London licence removed before by TfL back in 2017 after it was decided that the company was "not fit and proper" following security issues, public safety issues, poor reporting (of serious in-car crimes), poor medical checks (of drivers) and poor background checks (of drivers). Uber’s controversial founder and CEO Travis Kalanick had already resigned (in June 2017) amid rumours that he had possibly been "pushed" by unhappy shareholders.  Mr Kalanick was replaced by Dara Khosrowshahi.

In 2018, Uber was only given a probationary 15-month license in London following changes made to improve relations with city authorities and had most recently (September) only been granted only a two-month license, which is the licence that is now about to be allowed to expire.

Black Cab Battle

Uber has not had an easy ride in London from its competitors, the drivers of the famous black cabs. The 22,000 traditional “cabbies”, who are required to pass the notoriously difficult memory test of the city’s road network known as “the Knowledge” in order to pick up passengers have objected (many would say understandably) to the loss of business as a result of having to compete with a growing number of Uber drivers who don’t face the same costs or regulations, and who don’t take the same test, and who can rely on satnav apps.

Carry On and Appeal

It has been reported that although the decision to remove the London licence has been taken, Uber will appeal and it is likely that its 45,000 drivers in London may decide to keep accepting customers until the long process of the appeal has been considered.

Trouble Around The World

It’s certainly not just the UK where Uber has found itself facing legal challenges in recent years.  For example:

In the US, in March, the company had to pay $20 million in settlement of a lawsuit brought by drivers who claimed they were employees and were therefore entitled to some wage protections. Also, in November, Uber unsuccessfully challenged a city law which limited the number of licenses for ride-hailing services.

In Australia this year, the company faced a class action on behalf of thousands of drivers who alleged that Uber was operating illegally and harming them financially, and back in December 2018 in Germany, Uber’s limousine service (stopped in 2014) was ruled to have been illegal. Uber has also faced legal problems in the Netherlands, India, and Austria.

Other Woes

Back in November 2017, Uber was handed a £385,000 fine by the ICO in the UK for data protection failings during a cyber-attack back in 2016 which involved the compromising (and theft) of data relating to 600,000 US drivers and 57 million user accounts.

Also, back in May, Uber’s trading debut at the New York Stock Exchange (NYSE) proved to be somewhat underwhelming when the opening share price was much lower than had been expected at only $45 per share.

Move to Bikes and Scooters

In August 2018, Uber announced a shift in focus towards bikes and scooters in order to drive growth and keep people using the platform. It was thought that bikes and scooters would be more effective and efficient than cars in congested city areas, could represent a way to get another slice of the lucrative mobility market, and that they could be used to help shape consumer behaviour and keep levels of engagement high.

Popular With Users

It has to be said that despite Uber’s problems with the authorities and London cabbies, the service has been popular with many users having positive things to say about the convenience of the app, Uber prices and the speed of the service.

What Does This Mean For Your Business?

Uber had already been on borrowed time in London after finally being granted a two-month licence (following on from just a 15-month probationary one).  Uber’s relationship with the UK authorities and Mayor Sadiq Khan, who had accused Uber as adding to the city’s congestion problems, has been on the edge for quite some time, and it appears as though Uber may not have made the changes that it had pledged to make in order to retain its licence.  The appeal may take a few months, so it is likely that Uber drivers will simply carry on for the time being.

For users it may come as a disappointment that a service that they found to be very convenient will soon no longer be available but it may be the case that a new London Mayor after May 2020 could take a different approach towards Uber.  For example, some Uber drivers have expressed the belief that Mayor Khan may be pandering too much to the black cabbies, and a hopeful future mayor candidate, Shaun Bailey (Conservative) has expressed regret over TfL’s decision to not grant another licence to Uber.  For the time being though, it’s a waiting game in London for Uber.