Uber told to hit the road by regulators – as it should have been
Regulators appear to have finally woken up to transport startups. Uber lost its licence in London, rival Taxify was suspended after just three days, and even bike-share startups have been slapped around by local councils, after oBike left a few too many bicycles scattered about on pavements.
Transport for London (TfL) divided public opinion by failing to renew Uber’s licence to operate in the capital, with the regulator saying it wasn’t satisfied that the controversial cab-hailing app was “fit and proper”.
The decision has nothing to do with driver pay – a separate issue that TfL should also act on – but concerns over Uber’s use of its “Greyball” software to avoid regulator attention, as well as how the company conducts criminal background and medical checks. Then there’s the small matter of how it reports (or doesn’t) serious offences, after a complaint from police about failures to alert accusations of sexual assaults to the authorities.
Despite such serious concerns, critics of TfL claim its action against Uber was financially motivated and bad for business. Uber’s new CEO Dara Khosrowshahi said that the decision would have “profound negative consequences” for riders and drivers, an idea echoed by Theresa May, who said the move was “disproportionate” and had “damaged the lives” of its users.
But, Theresa, losing easy access to cheap cabs isn’t damaging to users; letting drivers accused of sexual assault continue to pick up passengers is. Plus, Uber is allowed to keep operating while it appeals, and will likely agree to make a few changes to convince TfL to renew its licence. As I type these very words, Khosrowshahi is in town to meet with the regulator.
Innovation will sometimes help to fix outdated rules – cab licensing laws are bonkers in most cities – but smart startups need to learn what regulation to disrupt and what is worth preserving. Making it easier to hail a cab is clever; slashing driver pay and rider safety isn’t.