Humbled Uber has hard journey back to success
Ride-hailing giant will be driven out of town unless it works out a solution with TFL, reports James Titcomb
At 2pm on June 11 2014, London ground to a halt. Thousands of black cab drivers brought traffic to a standstill at landmarks including Leicester Square and the Houses of Parliament, in one of the trade’s biggest-ever mass demonstrations.
At the time, only a minority of Londoners had used Uber, an American smartphone app that had quietly launched in the capital in 2012. Minicabs were not new, but the ability to pull a phone out of your pocket and hail one as easily as a taxi was.
The Licensed Taxi Drivers’ Association (LTDA), which organised the protest, argued that Uber was operating illegally. “They should have to apply for the same rules as everyone else,” the LTDA’S Steve Mcnamara fumed. Cabbies who had stamped their passenger receipts “Back Boris” in 2008’s mayoral race chanted “Boris out”.
The protest backfired spectacularly. If London’s commuters weren’t aware of Uber before the strike, many of them undoubtedly were afterwards. Downloads of the app increased by 850pc on the day. As taxi drivers were clogging up the streets, Uber announced that it was creating an option on its apps for users to order black cabs, an apparent olive branch that made the company look as if it was taking the higher ground. Uber may have arrived in London two years earlier, but the image of taxis clogging up the streets felt like the moment it had truly become embedded.
Four months later its triumphant chief executive, Travis Kalanick, visited London to announce that Uber’s offering there would be expanded to include Uberpool, a service that allows passengers to save money by splitting rides. By late 2015 the app had 20,000 drivers and more than a million customers in the city. To some, the thousands of Uber drivers, recognisable by the almost-ubiquitous Toyota Prius and smartphone cradle stuck to its windshield, had become as much a part of London’s culture as the black cab or double-decker bus. It seemed that, despite the smarting from its rivals, Uber was here to stay.
That changed just over a week ago when Transport for London sent a shockwave through the company. The regulator, responsible for supervising London’s 21,000 taxi drivers and almost 120,000 private hire vehicles (Uber drivers count as the latter), announced that Uber’s operator licence, which it has held since 2012, would not be renewed. Effectively, Uber would disappear from London.
Uber, which likes to think of itself as a disruptive technology company that connects passengers and drivers, not a boring minicab app, has had no shortage of run-ins with regulators around the world. It has been chased out of cities as diverse as Austin, Paris and New Delhi, as well as entire countries.
But London was different. With 3.5m
‘We will work with London to make things right and keep this great global city moving safely’
‘This ban would show the world that, far from being open, London is closed to innovative companies’
users and 40,000 drivers, it is the company’s largest European market and one of its biggest overall. In a city determined to position itself as a global business hub, banning Uber was never seen as likely, despite the vocal protests of its cabbies. Uber had been given clean bills of health in 10 previous TFL inspections, according to Freedom of Information records released by the regulator.
The company had endured run-ins with TFL before. In 2015, the regulator had proposed a series of new rules for minicab drivers that appeared directly targeted at Uber itself, such as a five-minute wait between a journey being ordered and setting off. After a substantial lobbying campaign, including launching an online petition that garnered more than 100,000 signatures, TFL largely backed down. Uber had also been successful in watering down or delaying other rules, such as English language tests for drivers.
TFL often sided with Uber, such as when lawyers for the regulator and the company stood on the same side of the room in a High Court case over whether the company’s app was legal.
So officials at the company’s office in East London were confident its licence would be renewed, if frustrated at TFL dragging its feet and at an alleged lack of communication.
The company was allegedly informed just one minute before last month’s shock decision was announced, and reacted furiously.
“This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers,” said Tom Elvidge, its general manager for London. TFL, in an unusually public gesture, laid out its list of complaints. “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,” it said. The concerns included the way Uber reports serious criminal offences – police have accused the company of failing to tell them about crimes, even when it reports them to TFL, while Uber insists it has a good relationship with police – the company’s approach to background checks, and the use of “Greyball”, a software tool the company has allegedly used to block its regulators from being able to find rides (Uber denies Greyball has been used for this purpose in the UK).
Additionally, TFL stated that it did not consider Uber to be “fit and proper” to hold a licence. Being fit and proper means operators fulfil criteria such as audited accounts and insurance requirements, although it is unclear on what basis Uber has failed.
Some supporters of Uber cannot help but feel that other things are at play. Although London’s streets are rarely blockaded by black cabs nowadays, taxi drivers have continued to campaign against the tech firm. The LTDA sent TFL legal objections saying that Uber was operating illegally, while the drivers’ union GMB had demanded that Uber be stripped of its licence because of the way it treated drivers as self-employed contractors instead of employees. While an area
Get tough: Tfl’s decision to ban Uber, run by Dara Khosrowshahi, below right, has turned political as Sadiq Khan, the London Mayor, left, chairs Transport for London