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

The Sunday Telegraph - Money & Business - - Business -

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

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