Why Uber will not be granted license to operate in London?

Uber will not be granted a new license to operate in London after repeated safety failures, Transport for London (TfL) has said.

The regulator said the taxi app was not “fit and proper” as a license holder, despite having made a number of positive changes to its operations.

Uber initially lost its license in 2017 but was granted two extensions, the most recent of which expires on Monday. The firm will appeal and can continue to operate during that process, reports BBC.

London is one of Uber’s top five markets globally and it has about 45,000 drivers in the city. Overall, there are 126,000 licensed private hire and black cabs in the capital.

If its appeal is unsuccessful, some think Uber drivers would move over to rival ride-sharing firms such as Bolt and Kapten.”There would be the competition that would fill that void quite quickly,” Fiona Cincotta, a market analyst at City Index told reporters.

WHY won’t UBER GET A NEW LICENSE?

TfL said it had identified a “pattern of failures” in London that placed passenger safety at risk.

These included a change to Uber’s systems which allowed unauthorized drivers to upload their photos to other Uber driver accounts.

It meant there were at least 14,000 fraudulent trips in London in late 2018 and early 2019, TfL said.

The regulator also found dismissed or suspended drivers had been able to create Uber accounts and carry passengers. In one example, a driver was able to continue working for Uber, despite the fact his private hire license had been revoked after he was cautioned for distributing indecent images of children.

Helen Chapman, director of licensing at TfL, said: “While we recognise Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured.”

London Mayor Sadiq Khan said: “I know this decision may be unpopular with Uber users, but their safety is the paramount concern. Regulations are there to keep Londoners safe.”

WHAT DOES UBER SAY?

Uber said the decision was “extraordinary and wrong”. It said it had audited every driver in London over the past two months and strengthened its processes.

Boss Dara Khosrowshahi tweeted: “We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London.”

According to Uber, 24% of its sales come from just five cities, including London. The others are Los Angeles, New York City, San Francisco and São Paulo in Brazil.

In a public filing, it said: “Any inability to operate in London, as well as the publicity concerning any such termination or non-renewal, would adversely affect our business, revenue, and operating results.

“We cannot predict whether the TfL decision, or future regulatory decisions or legislation in other jurisdictions, may embolden or encourage other authorities to take similar actions even where we are operating according to the terms of an existing license or permit.”

WHAT DO OTHERS SAY?

Business lobby group the CBI said customers valued Uber, and encouraged both sides to find a resolution.

But the Unite union – which believes Uber has unfairly taken business from black cab drivers – welcomed the news.

“Uber’s DNA is about driving down standards and creating a race to the bottom which is not in the best interests of professional drivers or customers,” said Jim Kelly, chair of Unite’s London and Eastern cab section.

Where else has banned Uber?

Uber has faced pressure from regulators around the world over the way it treats its drivers, competition concerns, and fears about passenger safety.

The US firm pulled out of Denmark in 2017 because of new taxi laws that required drivers to have fare meters and seat sensors.

Bulgaria and Hungary both stripped Uber’s right to operate following pressure from local taxi unions.

And in May, the ride-hailing firm pulled its UberXL service in Turkey without saying why.

WHAT HAPPENED IN LONDON IN 2017?

TfL first declined to renew Uber’s license in September 2017, again over safety concerns. Back then it cited Uber’s approach to carrying out background checks on drivers and reporting serious criminal offenses.

Uber’s use of secret software, called “Greyball”, which could be used to block regulators from monitoring the app, was another factor, although Uber said it had never been used in the UK.

However, TfL granted Uber a 15-month license extension – later extended by two months – conditional on it making improvements to its business.

TfL can offer licenses of up to five years, but it has been more stringent of late.

In July, Indian ride-hailing company Ola got a 15-month agreement for its entry into the London market, while ViaVan got a three-year license renewal.

 

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