Uber loses London licence due to corporate responsibility concerns

Transport for London rules Uber London is not a 'fit and proper' organisation

Uber London has lost its licence to provide minicab services after Transport for London (TfL) decided the ride-hailing app operator is not "fit and proper" to hold a private hire operator licence. This morning TfL announced that Uber would not be issued with a private hire operator licence after expiry of its current licence on 30 September. 

Uber has signalled its intention to appeal the decision. In a statement, Uber said: "Transport for London and the mayor have caved in to a small number of people who want to restrict consumer choice. Some 3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision." 

TfL said regulation of London's taxi and private hire trades is designed to ensure passenger safety. “Private hire operators must meet rigorous regulations, and demonstrate to TfL that they do so, in order to operate. TfL must also be satisfied that an operator is fit and proper to hold a licence.”

Safeguarding issues seem to have been paramount in the decision not to renew the licence. TfL said that it considers that Uber's approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues that have potential public safety and security implications. These include: Uber’s approach to reporting serious criminal offences; its approach to how medical certificates are obtained; and its approach to how Enhanced Disclosure and Barring Service (DBS) checks are obtained.

TfL also flagged up concerns over Uber’s Greyball software tool, which the company uses to identify and deny service to certain riders, including those who Uber suspects of violating its terms of service. TfL said the Greyball software could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties.

TfL said it will make no further comments pending any appeal of its decision. The Private Hire Vehicles (London) Act 1998 includes provision to appeal a licensing decision within 21 days of it being communicated to the applicant. Uber London can continue to operate until any appeal processes have been exhausted.

Uber's general manager in London Tom Elvidge told the BBC: “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."

Uber London Limited was licenced as a private hire operator in 2012. On 26 May TfL granted a four-month extension on the licence whilst it concluded its consideration of a five-year licence. This licence expires on 30 September.

Mayor of London Sadiq Khan has been stressing TfL’s decision was taken independently of his office, but he welcomed the move.  “I want London to be at the forefront of innovation and new technology and to be a natural home for exciting new companies that help Londoners by providing a better and more affordable service,” he said. “However, all companies 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 I fully support TfL’s decision - 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. Any operator of private hire services in London needs to play by the rules."

TfL’s decision was welcomed by Jennette Arnold, chair of the London Assembly, said: “We welcome Transport for London’s decision not to renew Uber’s licence. The London Assembly unanimously agreed for the licence not to be renewed, unless the company improved its working practices.  Londoners’ safety must come first and the Assembly was concerned about the effects of Uber’s practices on its own drivers, other private hire operators and the London licenced taxi trade. If Uber wants to operate in London in the future, it really must up its game, in terms of safety and its working conditions.”

The London Assembly unanimously agreed a motion in July 2017 calling for the license of Uber to not be renewed, unless the company improves its working practices.

However, Conservative London Assembly member Andrew Boff said the decision was wrong. “The mayor consistently tells us London is open but in shutting down the operations of an innovative market leader like Uber he has caused immense reputational damage to our city as a global business hub,” sad Boff. “With 3.5m registered users – almost half the city’s adult population – Uber has shown to be providing a hugely beneficial service to Londoners.”

David Leam, director of infrastructure at London First, a London business lobbying group, said: “This will be seen as a Luddite decision by millions of Londoners and international visitors who use Uber. It will also hit London's reputation as a global tech hub. London needs to be open to new ideas, businesses and services.”

Alex Wild, research director at the Taxpayers' Alliance, also attacked the decision. “TfL has once again caved into pressure from unions who wreak havoc with their endless strikes and never miss an opportunity to rip-off passengers,” he said. “This announcement is terrible news for those who rely on the service for transport and a living, but what’s especially galling is the 7 figure annual subsidy TfL provides to militant unions like the RMT who will be celebrating their latest victory over ordinary Londoners tonight. City Hall must look urgently at this issue and scale back the 700-strong army of union representatives TfL employs."

Trade unions have welcomed the decision. Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association (LTDA), which represents black cab drivers, said revoking Uber’s licence was the right decision.  “Since it first came onto our streets Uber has broken the law, exploited its drivers and refused to take responsibility for the safety of passengers. This immoral company has no place on London’s streets,” he said.

Frances O’Grady, general secretary of the TUC, said: “This should be a cautionary tale for gig economy employers. Unions will expose nasty schemes that cheat workers out of basic rights like the minimum wage and holiday pay.”

Unions have been calling on TfL to insist Uber guaranteed basic employment rights under the terms of its new five-year licence. Uber will be in court next week appealing against an employment tribunal ruling that should give its drivers access to the minimum wage, sick pay and paid holidays.

Uber operates in more than 600 cities around the world, including more than 40 towns and cities in the UK. The company has a history of engaging in  regulatory battles with US states and countries around the world. It has won some but also been forced to cease operations in countries such as Denmark and Hungary.

In recent months Uber has also faced a string of scandals involving allegations of sexism and bullying. This summer, investor pressure forced out former chief executive and co-founder Travis Kalanick this summer. Uber is facing a US federal investigation after a New York Times report on the use of Greyball software.