In a huge blow, Uber has lost its license to operate in London. The city’s transportation agency, Transport for London (TfL), refused to renew the license on Friday after determining that the ride-hailing giant was not “fit and proper” to hold one due to a lack of corporate responsibility.
“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” TfL said in a statement.
The TfL statement specifically cited the Silicon Valley giant’s “approach to reporting serious criminal offences” and approach to conducting background checks on drivers as issues driving the decision to ban it from London. The agency also cited Uber’s approach to explaining Greyball, a controversial software it has used worldwide to evade regulatory authorities and in some cases operate in cities without permission.
If upheld, the decision could prove to be a major setback for a beleaguered company that has already weathered numerous scandals and controversies in the past year, ranging from allegations of sexual harassment and the ouster of its founder Travis Kalanick as CEO.
Just last month, as TfL was deliberating over whether to renew Uber’s license, the London metropolitan police accused the company of failing to report sexual assault by one of its drivers, allowing him to strike again. Earlier this month, a group of MPs from different parties signed a joint letter calling on TfL to strip Uber of its license as the company was not “fit and proper” to hold one, the Evening Standard reported.
London mayor Sadiq Khan also announced that he “fully supports” TfL’s decision.
“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”, Khan said in a statement.
The decision was unsurprisingly hailed by London cabbies, according to Techcrunch, and rival startup mytaxi, which works solely with London’s black cabs and took the opportunity to announce a 30 percent discount until the end of the month.
Uber London Limited’s current license, which was initially issued in 2012, was due to expire in May but was extended for a period of four months as regulators deliberated over their decision. It is technically due to expire on September 30. However, the company has the option of launching an appeal within 21 days, and will be allowed to continue operating in London until the appeal proceedings are concluded.
Uber has already said that it will “immediately challenge this [decision] in the courts”, in a statement obtained by Techcrunch.
“Transport for London and the mayor have caved in to a small number of people who want to restrict consumer choice,” Uber’s general manager in London, Tom Elvidge, said. “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.”
In his statement, Elvidge denied that Uber had ever used Greyball software and claimed that the company had observed proper protocols in reporting criminal offences and conducting background checks on drivers. He also shot back at London’s government, noting that the ban shows “the world that, far from being open, London is closed to innovative companies who bring choice to consumers.”
Uber claims to serve 3.5 million Londoners and employ more than 40,000 drivers, some of whom criticized the outright ban as a blow to their livelihoods. Uber users in London were also dismayed at the inconvenience posed by the ruling, given the significantly higher prices charged by licensed black cabs and lack of viable public transport alternatives.
Uber’s new CEO, Dara Khosrowshahi, tweeted out a plea for support to Londoners on Friday afternoon.
“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,” the tweet read.
Uber has also launched a Change.orgpetition to Khan, which has already garnered more than 400,000 signatures in a matter of hours.
“I don’t believe black cabs should run London like a cartel. If Uber has problems let’s resolve them not just ban them,” wrote James Pace, one of the petition’s supporters. Others wrote that beyond harming drivers and limiting consumer choice, the decision would repel innovative companies from London.
Ahmad Shoaib, an Uber driver, told the New York Times that the decision was unfair. “I know there have been some problems with drivers, but most of us are good and reliable and play by the rules,” he said. “It is not fair to punish everyone because of the mistakes of one or two people.”
Uber may stand a chance of earning a reversal of the ban if it makes changes according to the list of offences cited by TfL.