London kicks Uber to the curb over safety concerns.
Company to appeal as regulator cites concerns over passenger safety
Uber has lost its license to operate in London, with that city’s transportation regulator saying Monday it has lost confidence that the company “has a robust system for protecting passenger safety.”
The San Francisco-based company said Monday it will appeal the decision by Transport for London, which it called “extraordinary and wrong.” In a statement, Jamie Heywood, Uber’s regional general manager for Northern & Eastern Europe, said, “TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond.”
Uber CEO Dara Khosrowshahi said on Twitter that the decision was “just wrong,” and vowed to “keep going, for the millions of drivers and riders who rely on us.”
Transport for London, which regulates taxi and private-hire services, cited security breaches, including a change in Uber’s app that allowed unauthorized drivers to upload their photos to other driver accounts. At least 14,000 trips involved unauthorized drivers, the regulator said, and dismissed or suspended drivers had been allowed to create an Uber account and carry passengers.
“While we recognize Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured,” said Helen Chapman, director of licensing, regulation and charging at TfL, in a statement.
Uber can operate in London while it appeals the regulator’s decision in one of Uber’s top 5 markets, which has 45,000 drivers and 3.5 million riders. Uber said in a filing that it collected 24% of its revenue in 2018 from five metro areas: the Bay Area, Los Angeles, New York City, London and
São Paulo, Brazil.
Uber has had a rocky relationship with London’s regulator, which in 2017 revoked the company’s license to operate. After a court battle, Uber was granted an extension in June and again in September. The latest extension expired Sunday.
Wedbush Securities analysts estimate a 3% to 4% negative impact on Uber revenue if the company fails to get an extension to operate in London, they said Monday.
The London decision “could have a major ripple impact across other European cities,” said Ygal Arounian and Dan Ives for Wedbush. They said they were staying positive on Uber but noted that a “horror show of bad news” keeps coming for the company.
Insiders, like cofounder Travis Kalanick, have been selling off stock since the lockup expiration earlier this month. Kalanick has sold nearly $1.5 billion worth of Uber shares so far amid continuing questions about the firm’s profitability. The company also has regulatory concerns in California and elsewhere, with a California law set to take effect in January that could change the employment status of drivers.
“This is just another reminder that Uber is fighting a lot of battles on a lot of fronts, and a lot of those fronts have fluid regulatory landscapes,” said Tom White, analyst with D.A. Davidson, on Monday.
Uber’s stock fell as much as 6% in pre-market trading but closed the session down 1.5% to $29.11.