In an unexpected blow to Uber, the city of London has refused to reissue its license to operate, over concerns that its ride-sharing service “is not fit and proper.” The decision will mean that, after Uber‘s current license expires on September 30, 2017, Uber will not be able to run its business in the UK’s capital city. At its heart, the decision comes down to ongoing controversies about driver background disclosures and how Uber has used tools to make regulatory monitoring more difficult.
That so-called “Greyball” tool landed Uber in hot water in multiple cities, after it was revealed that, among other things, it was being used to operate in cities where the company was not officially approved. At the time, Uber argued that its real purpose was to deny service to riders that contravened the company’s own terms of service. However, investigations found that in addition to that it was being used to track when regulators and law enforcement attempted to use the Uber app to track activity in their location.
That’s one of the reasons Transport for London (TfL), the regulator responsible for licensing taxi and taxi-like services such as Uber and Lyft, has come down hard on the service today. “TfL’s regulation of London’s taxi and private hire trades is designed to ensure passenger safety,” the regulator said in a statement today. “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.”
“TfL has concluded that Uber London Limited is not fit and proper to hold a private hire operator licence,” it concludes. “TfL considers that 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.”
There are four key places where Uber has fallen foul. Perhaps most significant is “its approach to reporting serious criminal offenses,” TfL says, referring to ongoing complaints about drivers committing sexual assaults and other crimes on service users. Connected, TfL takes issue with “how Enhanced Disclosure and Barring Service (DBS) checks are obtained.”
Also cited is Uber’s “approach to how medical certificates are obtained” and “its approach to explaining the use of Greyball in London – 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.”
That this is all blowing up now shouldn’t come as too great a surprise for Uber. The company was notified at the end of May, 2017, that its private hire operator license would be extended by four months only, after the initial five year license was due to end. That, TfL said at the time, was to give the regulator time to conclude its assessment of how Uber had behaved during the first license period.
In a statement by Uber’s general manager in London, Tom Elvidge, the company pushed back at TfL’s allegations. “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,” Elvidge says. “By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice. 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.”
As Elvidge frames it, this is simply the latest attack against Uber – and taxi-disrupting services in general – by rivals who aren’t happy at having a tech-savvy competitor in the market. “By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice,” he writes. Although unstated, the exec likely means organizations like London’s Licensed Taxi Drivers Association (LTDA), which represents traditional “black cabs” in the city, and which has been a vocal opponent of Uber, Lyft, and other such services.
“Drivers who use Uber are licensed by Transport for London and have been through the same enhanced DBS 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 UK for the purposes cited by TfL.
Uber operates in more than 600 cities around the world, including more than 40 towns and cities here in the UK. This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.” Tom Elvidge, general manager, Uber London
Uber says it will appeal the TfL’s decision in the courts. Likely expecting that, the TfL had already pointed out that Uber was free to do that within 21 days of a licensing decision being communicated. It also means that, even after the September 30 license expires, it seems Uber will still be available in London. “Uber London Limited can continue to operate until any appeal processes have been exhausted,” the TfL points out.