In one of the biggest blows to Uber’s business since its founding eight years ago, the ridesharing company has had its application for a new operating license in London rejected. However, the latest news has the company’s CEO and the head of the relevant London transport agency in talks that both parties are characterizing as positive.
Regulator Transport for London (TfL) told Uber on September 22 that it is “not fit and proper to hold a private hire operator license” and therefore it will not grant a replacement when the current one expires at the end of this month. Uber has 21 days to appeal the ruling and can continue serving riders during that time.
Uber says it currently has more than 3.5 million Londoners using its service, and around 40,000 drivers who make a living from it.
In a statement explaining its decision, TfL said its regulation of taxi and private hire businesses aims to ensure the safety of passengers. But it said Uber’s approach and conduct demonstrated “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications.”
Its approach to reporting serious criminal offences
Its approach to how medical certificates are obtained
Its approach to how Enhanced Disclosure and Barring Service (DBS) checks are obtained
Its approach to explaining the use of Grayball, software that could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties, in London
Uber’s London operation came under fire in August 2017, when it was accused of failing to report directly to police a string of serious crimes allegedly committed by its drivers.
Uber dealt another blow on workers’ rights
Uber’s fight for its life (which is to say, license) in London is looking more and more like an uphill battle. On Friday, the transportation giant lost an appeal seeking to overturn a tribunal decision requiring Uber to grant its contractors workers’ rights, including the minimum wage, holidays, and breaks. While the company argued that its drivers are self-employed and make use of Uber’s flexible work schedule, lawmakers in the U.K. clearly see things differently.
“Today’s victory is further proof, as if any more was needed, that the law is clear and these companies are simply choosing to deprive workers of their rights,” said Jason Moyer-Lee, the IWGB’s general secretary.
If Uber wants to further fight this decision, the company has two weeks to apply to take its case all the way to the British Supreme Court.
“Over the last year we have made a number of changes to our app to give drivers even more control,” said Uber UK’s Acting General Manager Tom Elvidge in a statement. “The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive.”
Uber’s northern European manager leaving the company
The highest ranked Uber employee in the U.K. is leaving the company, as per an email obtained by Reuters on Monday, October 2. The news came the day before CEO Dara Khosrowshahi was slated to meet with London’s transport regulator. Uber’s Northern European Manager Jo Bertram will make her exit in the next few weeks, and in her email, she noted that Uber was in need of different leadership in contentious times.
“Given some of our current challenges, I’m also convinced that now is the right time to have a change of face, and to hand over to someone who will be here for the long haul and take us into the next phase,” she wrote. “While I would like to have announced my move in smoother circumstances, I’m proud of the team we’ve built here and am very confident in their abilities to lead the business into the next chapter.”
It’s unclear as of yet where Bertram will head next, but her position in Britain will be temporarily taken by Uber’s London general manager Tom Elvidge.
Uber CEO meets with London transport chief
Uber’s new CEO Dara Khosrowshahi is met with the London transport lead on Tuesday, October 3, in an attempt to regain the company’s license to operate. While few details regarding the discussion have emerged, both the TfL Commissioner Mike Brown and Khosrowshahi called the conversations “constructive.” In the meantime, London’s mayor Sadiq Khan complimented the Uber executive’s humble response to the contentious decision, which contrasts sharply with previous leadership.
“What gives me confidence about the TfL decision is the fact that the global chief executive officer for Uber apologized to London,” Khan told LBC Radio. “I think that bodes well in relation to the humility which hasn’t been shown by Uber London or Uber U.K.” he added.
For the time being, it looks as though things may be going the ridesharing giant’s way. Not only has the decision not to renew Uber’s lease caused major backlash among drivers and passengers in the country’s capital, but even Prime Minister Theresa May has noted that a “blanket ban” against the company was “disproportionate.”
An Uber spokesman reaffirmed after the October 3 meeting. “We want to work with London to make things right,” and Khan noted, “The global CEO has gone away to do some further work and I always think, as I said before when it came to the tube strikes, the way to resolve differences is constructively and amicably around a table rather than through litigation.”
Uber’s deadline to appeal is October 13.
Previously, Khosrowshahi sent an internal email to his larger team in response to the crisis in London, as well as a public response via Twitter.
Dear London: we r far from perfect but we have 40k licensed drivers and 3.5mm Londoners depending on us. Pls work w/us to make things right
— dara khosrowshahi (@dkhos) September 22, 2017
Acknowledging that the company is “far from perfect,” the newly minted company executive begged London to work with the ridesharing service in order to make things right.
Separately, Khosrowshahi addressed the issue in an internal memo, which was initially published on Twitter by Bloomberg’s Eric Newcomer. “Like all of you, I’m hugely disappointed,” the leader wrote. But still, in a reflective and thoughtful note, he added, “… it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another.”
— Eric Newcomer (@EricNewcomer) September 22, 2017
Although he promised to “vigorously appeal” the decision, he concluded, “Going forward, it’s critical that we act with integrity in everything we do, and learn how to be a better partner to every city we operate in.” Urging the team to build trust “through our actions and our behavior,” Khosrowshahi pledged to “show that Uber is not just a really great product, but a really great company that is meaningfully contributing to society, beyond its business and its bottom line.”
Uber GM: Riders and drivers will be “astounded”
Responding to TfL’s decision, Tom Elvidge, general manager of Uber London, said Uber’s riders and drivers in the capital city would be “astounded by this decision.” He said the decision to ban the app showed that TfL and the London mayor, Sadiq Khan, had “caved in to a small number of people who want to restrict consumer choice.”
“To defend the livelihoods of all those drivers, and the consumer choice of millions of Londoners who use our app, we intend to immediately challenge this in the courts,” he said.
Elvidge insisted that Uber drivers are licensed by TfL “and have been through the same enhanced background checks as black-cab drivers. Our pioneering technology has gone further to enhance safety with every trip tracked and recorded by GPS. We have always followed TfL rules on reporting serious incidents and have a dedicated team who work closely with the Metropolitan Police. As we have already told TfL, an independent review has found that ‘greyball’ has never been used or considered in the U.K. for the purposes cited by TfL.”
He finished by claiming the ban would “show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.”
London’s mayor comments
Khan, London’s mayor, said all businesses operating in London “must play by the rules and adhere to the high standards we expect, particularly when it comes to the safety of customers. Providing an innovative service must not be at the expense of customer safety and security.”
Khan added that it would be “wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.”
Signs that Uber’s London operation was coming under increased scrutiny surfaced in May when its license was renewed for just four months instead of the usual five years.
It’s too early to say how Uber riders and drivers in London will react to the decision. When TfL proposed limiting Uber’s operations with strict private hire rules in 2015, however, more than 200,000 people signed a petition in protest. Most of the proposals were subsequently dropped.
Uber has been having a tough time of it lately. Facing mounting criticism over how it conducts its business, it was also rocked by allegations in February of sexual harassment in the workplace. More recently, Uber founder Travis Kalanick was forced to resign by investors concerned about the direction in which the company was heading, and it’s also currently embroiled in a legal battle with Google/Alphabet.
Update: Uber loses a key battle on workers’ rights.