Uber to lose license to operate in London
Company told it was not ‘fit and proper’ to operate
LONDON — Uber will lose its license to operate in London because it may be endangering public safety and security, the local regulator said Friday, in a severe blow to a company already facing big questions over its corporate culture.
The company, which has been beset by a litany of scandals over its management style — from accusations of sexism to the illegal use of software to trick regulators — was told it was not “fit and proper” to keep operating in London, where it has 3.5 million passengers and 40,000 drivers.
“TfL 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,” the regulator said.
Transport for London cited instances in which Uber failed to report serious criminal offences as well as its penchant to deceive regulators in its decision to not renew its license when it expires on Sept. 30. Uber will appeal, during which time it can continue operating.
The decision startled many — even though the ride-hailing business has many critics. The city’s black cab drivers — who spend years learning the city streets to pass the famed Knowledge test — objected to the interlopers who undercut their business. Unions objected to the company’s treatment of its workforce.
“It’s a technical decision that picks up the spirit of the age,” said Tony Travers, an expert on local government at the London School of Economics.
Uber had been warned. Earlier this year, Transport for London renewed its license on a limited basis, giving it six months to address concerns.
London Mayor Khan said that any operator of taxi services in the city “needs to play by the rules.”
“Providing an innovative service must not be at the expense of customer safety and security,” he said. “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.”
For its part, Uber accused the city of caving in to special interests “who want to restrict consumer choice.” It issued a statement to its users, starting a petition to reverse the decision.
“Uber operates in more than 600 cities around the world, including more than 40 towns and cities here in the U.K.,” the company said. “This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.”
If its ban is upheld, Uber will have to show that it is changing in order to get back into the lucrative London market, says Jan Dawson, chief analysts for Jackdaw Research in California.
“The fact that Uber is so mature and broadly used in London means it’s very unlikely that it will be permanently banned there — the political fallout would just be too great.”
Uber drivers like James Farrar, the chair of the Independent Workers’ Union of Great Britain’s United Private Hire Drivers branch, wondered how they would pay their bills.
“This is a devastating blow,” he said, noting that many people now “face losing their job and being saddled with unmanageable vehicle-related debt.”
Uber, founded in 2010 in San Francisco, has often faced opposition as it expanded. Taxi drivers complain that Uber drivers don’t have to comply with the same licensing standards, giving the ride-hailing service an unfair advantage and placing the public at risk.