Uber contends it has changed; judge to decide starting today
The New York Times
LONDON — Dara Khosrowshahi’s 10-month tenure as Uber’s chief executive has been marked by a prolonged public relations campaign to apologize for the company’s past misdeeds and portray the once proudly combative startup as a reformed corporate citizen.
Starting Monday, a judge in London will test the success of his strategy.
Uber this week begins an appeal to reverse a decision by the British capital’s regulators to revoke its operating license. If it cannot make its case, that ruling ultimately could ban Uber cars from the city of 8.8 million, one of the company’s most lucrative markets. Uber will argue that new policies installed under Mr. Khosrowshahi show a newfound willingness to address government concerns.
The case before Westminster Magistrates’ Court has ramifications far beyond London, and, given changes the city has already wrung from Uber, it could embolden others grappling with how to regulate ridesharing services. The ruling will offer a hint as to whether governments and regulators are becoming more receptive to Mr. Khosrowshahi’s conciliatory efforts as he seeks to move past the brusque manner associated with his predecessor, Travis Kalanick.
“The trial is one of the first big tests of Khosrowshahi’s leadership of the company and new approach,” said Andre Spicer, a professor at the Cass Business School at City, University of London, who has been tracking the case. “The judgment will show whether authorities are willing to accept Uber with some of the harder edges knocked off, or whether there are more fundamental questions about the Uber model.”
Of all the issues that Mr. Khosrowshahi has confronted since taking over at Uber — allegations of a sexist company culture, government investigations, management turnover, a data breach affecting millions of customers — London’s potential ban is one of the most pressing for the company’s financial health.
With more than 3.6 million people using Uber at least once every three months, and 45,000 drivers transporting them, the British capital is Uber’s largest European market. The company so far has been able to continue operating pending its appeal.
But a ban would be Uber’s biggest regulatory setback to date. It would bruise its business at a critical time as Mr. Khosrowshahi is scaling back the company’s operations in money-losing markets in Asia and laying the groundwork for an initial public offering.
Mr. Khosrowshahi was less than a month into the job when London transport authorities revoked Uber’s license in September. Regulators said Uber was not a “fit and proper” company, an important classification for businesses in Britain. They accused the ride-hailing service of having poor safety standards, of not conducting sufficient background checks on drivers and of using software to avoid government oversight.
Mr. Khosrowshahi, former chief executive of Expedia, was in the midst of contentious negotiations to settle a boardroom feud between Mr. Kalanick and Uber investors at the time. He flew to London to discuss a potential compromise, calling into board meetings in San Francisco during the brief dash to Britain.
A deal could not be reached at the time, but the trip provided an early opportunity to underline the need for change at Uber. In a letter to employees after the London license was revoked, Mr. Khosrowshahi said, “There is a high cost for a bad reputation.”
Uber has since tried to address many of the criticisms from the London authorities, and a deal of some sort is likely to be reached to keep the company’s cars on the roads.