Uber loses its licence to operate in London

Using uber on a smartphone

credit : Toby Melville/Reuters

Popular ride-sharing firm Uber has had its licence to operate in London revoked in a surprise move by the city’s regulator. Transport for London (TfL) said in a statement that Uber was “not fit and proper to hold a private hire operator licence”.

Tom Elvidge, Uber’s general manager in London, says the firm’s users – and its 40,000 drivers – will be “astounded” by TfL’s decision.

Advertisement

“If this decision stands, it will put more than 40,000 licensed drivers out of work and deprive Londoners of a convenient and affordable form of transport,” he says.

There were multiple reasons for the decision. TfL cited the company’s approach to reporting criminal offences. In August, a senior officer within London’s Metropolitan Police Service wrote to TfL about Uber’s slowness to report a passenger’s accusation that her driver had sexually assaulted her. TfL said it was also concerned about how Uber obtained medical certificates and criminal records checks for drivers. The straw that broke the camel’s back may have been the company’s “Greyball” software – an internal application that Uber may have used to block regulators’ oversight of the Uber app. “This shows that Uber can’t have its own way everywhere in the world where it tries to launch,” says Chris Jones, chief analyst with research firm Canalys.

The firm’s licence will expire on 30 September, but this does not mean that Uber’s 3.5 million London users will immediately need to reconsider their transport options: Uber can continue to operate during the 21 days it has to appeal. “They do have a lot of people using them so it will be a shock,” says Jones.

Competitors smell blood

He also says this will be a warning for other companies. In the immediate aftermath, however, other companies seem to see more opportunity than warning. MyTaxi has notified select customers to promote its 50 percent reduced weekend fares, commenting that this will be cheaper than Uber, “who have just been found not fit and proper”.

Other services already competing with Uber in the British capital may fare well. Uber offers a food delivery service and today JustEat, a rival, has seen a spike in its share price.

However, not every potential competitor will benefit. Jones says he doesn’t think the news will make US rival Lyft – which offers a similar app and ride-sharing service – any more likely to enter the UK market. “It would be an obvious place to launch after the US but they’ve witnessed what Uber has gone through and the troubles it’s faced in London,” he explains.

Elvidge adds that Uber drivers have been through the same record checks as black cab drivers and said the firm has “a dedicated team” that works closely with the Met Police. He also cites an independent review which had cleared Uber of using or considering to use Greyball in the UK.

Steve McNamara is general secretary of the Licensed Taxi Drivers’ Association, which represents drivers at firms competing with Uber. He says TfL had made the right call, adding that Uber, which he describes as an “immoral company”, has no place on London’s streets.

More on these topics: