Uber spinning its wheels around the world
Ridehailing provider faces regulatory, managerial problems
US ride-hailing services provider Uber Inc has a world of issues to face. In the UK, the company lost a bid to overturn a decision on workers’ rights, on top of a licensing issue in that country. In India, its chief of policy for India and South Asia has quit. In Japan, SoftBank said it has not made a decision on whether to invest in Uber.
The US ride-hailing service has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services and regulators’ concerns. It has been forced to quit several countries, such as Denmark and Hungary.
On November 10, Uber lost a bid to overturn a UK tribunal’s decision that said the company’s drivers deserved such rights such as a minimum wage, in a blow to the company as it battles to keep its license in London.
Uber immediately said it would appeal to higher courts against the decision by the Employment Appeal Tribunal.
Last year, two drivers successfully argued at the tribunal that Uber exerted significant control over them to provide an on-demand taxi service and should grant them rights such as holiday entitlements and rest breaks.
That decision did not automatically apply to the app’s 50,000 drivers in the UK, but it was seen as likely to prompt more claims.
It could benefit workers at thousands of companies including those in the gig economy, where individuals work for multiple employers without a fixed contract.
The Independent Workers Union of Great Britain, which backed the two drivers, said these companies were “choosing to deprive workers of their rights.”
“Today’s victory is further proof, as if any more was needed, that the law is clear and these companies are simply choosing to deprive workers of their rights,” said Jason Moyer-Lee, the IWGB’s general secretary.
Uber has said that its drivers enjoy the flexibility of their work and are self-employed, entitling them in British law to only basic entitlements such as health and safety.
The company argued in September that its drivers operate in the same way as minicabs, or private hire vehicles, which sprung up in Britain more than 50 years ago.
On November 10, it confirmed it would appeal against the latest decision. A spokesman said the company had 14 days to submit its application and decide whether to apply to take the case to the Supreme Court, Britain’s top judicial body.
“Over the last year we have made a number of changes to our app to give drivers even more control,” said Uber UK’s acting general manager Tom Elvidge in a statement. “The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive.”
Yaseen Aslam, one of the drivers involved in the case, said they would continue their fight to ensure workers’ rights are respected.
“I am glad that the judge today confirmed what I and thousands of drivers have known all along: that Uber is not only exploiting drivers, but also acting unlawfully,” he said.
Uber, which is valued at about $70 billion with backers including
Goldman Sachs and BlackRock, will be back in court on December 11 to appeal a decision by London’s transport regulator to strip the app of its license.
Transport for London shocked Uber in September by deeming it unfit to run a taxi service and refusing to renew its license, citing its approach to reporting serious criminal offenses and conducting background checks on drivers.
Woes in Asia too
Uber’s trouble seem to extend far beyond the UK. Uber’s chief of policy for India and South Asia has quit, two sources familiar with the matter said on Monday, in the latest high-level departure at the online taxi company.
Shweta Rajpal Kohli, a former Indian journalist who joined Uber last year, will join cloud-based software maker Salesforce.com Inc next month, the sources told Reuters.
Uber, in a statement on Tuesday, confirmed Kohli had quit.
Kohli was mostly responsible for building Uber’s relations with regulators and government officials in India, a market where the company has faced several regulatory and reputational hurdles.
One source said Kohli “was leading government engagements in the influential circles, so her exit is a step back for Uber.”
Uber was briefly banned in New Delhi after one of its drivers raped a woman passenger in 2014.
Uber counts India as its secondbiggest market after the US. It operates in about 30 Indian cities and competes with Ola, a ride-hailing service backed by Japan’s Softbank.
Kohli is the latest senior executive to leave Uber. The company’s European policy chief quit in October, shortly after the departure of Uber’s top boss in Britain.
Uber has had a tumultuous few months, with former CEO and cofounder Travis Kalanick forced out after a series of boardroom controversies and other regulatory battles in multiple US states and around the world.
Uber said on Monday it had agreed with a consortium led by SoftBank and Dragoneer Investment Group on a potential investment.
But the Japanese company told a different story on Tuesday. SoftBank said it was considering investing in Uber but there was no final agreement yet.
“If conditions on share price and a minimum of shares are not satisfactory for the SoftBank Group side, there is a possibility the SoftBank Group may not make an investment,” it said in a statement.
SoftBank and Dragoneer are leading a consortium that plans to invest $1 billion to $1.25 billion in Uber, the highest-valued venturebacked company in the world, along with a purchase of up to 17 percent of existing shares in a secondary transaction.
Progress in the negotiations came after venture capital firm Benchmark, an early investor with a board seat in the ride-services company, and Kalanick reached agreement over terms of the planned SoftBank investment.
The Japanese technology and telecoms company has become a prolific investor in ride-sharing companies such as China’s Didi and India’s Ola.