London – VIJAY SHAH via SARAH BUTLER, GWYN TOPHAM and The Guardian
San Francisco-based taxi app company Uber has had its application to renew its public carriage licence turned down by Transport for London (TfL) after its business practices and safety record were called into question by critics, the Guardian newspaper reported today.
The company, founded by Travis Kalanick in 2010, operates in 400 cities around the world and is well known for its cheap prices, its large pool of contracted drivers and its ease of use. But the company has come under fire in London its ‘lack of corporate responsibility’, and its disruptive effect on the city’s indigenous ‘black cab’ licensed minicab trade. Uber has been accused of not properly vetting its drivers’ criminal records and for not doing enough to investigate alleged sexual assaults by contracted taxi drivers.
The move by TfL has created a massive shock in London, with many customers and drivers of Uber condemning the decision not to renew the firm’s licence, which enables it to operate on the city’s streets. Black cab drivers and motoring safety groups however, have expressed support for the decision, blaming Uber for increasing traffic and stealing trade from established cab firms.
TfL is said to have rejected Uber’s licence renewal on the basis that it is not a “fit and proper” private car hire operator, according to the Guardian newspaper. The current Uber licence will expire on the 30th of September and the company’s UK arm plans to launch an appeal against TfL’s decision. Uber works with 40,000 drivers and 3.5 million users, called ‘riders’ in London alone.
Uber’s chief executive, Dara Khosrowshahi in a message to the app’s staff issued yesterday said: “The truth is that there is a high cost to a bad reputation,” he wrote. “It really matters what people think of us, especially in a global business like ours.
“It’s critical that we act with integrity in everything we do, and learn how to be a better partner to every city we operate in. That doesn’t mean abandoning our principles – we will vigorously appeal TfL’s decision – but rather building trust through our actions and our behaviour. In doing so, we will show that Uber is not just a really great product, but a really great company that is meaningfully contributing to society, beyond its business and its bottom line.”
TfL was supported by London’s city Mayor, Sadiq Khan, employment rights campaigners and a federation of black cab firms. Uber has in the past been slated for not giving its drivers full employment status and not paying them a living wage, according to its critics. Uber’s customers and drivers have expressed dismay, along with Trade Minister Greg Hands.
TfL said it had rejected the company’s application to renew its licence because “Uber’s approach and conduct demonstrate a lack of corporate responsibility” in relation to reporting serious criminal offences, obtaining medical certificates and driver background checks. TfL has also accused Uber of employing special cloaking software to make it difficult for authorities to access the app and records for such purposes as law enforcement.
Khan said he fully supported TfL’s decision, saying all companies needed to “play by the rules”.
He said: “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.
“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.”
But Hands, who is also minister for London, said: “At the flick of a pen Sadiq Khan is threatening to put 40,000 people out of work and leave 3.5 million users of Uber stranded.
“Uber must address safety concerns and it is important there is a level playing field across the private hire market.
“But a blanket ban will cause massive inconvenience to millions of Londoners, all while showing that the Mayor of London is closed to business and innovation.”
Sam Gyimah, a Conservative justice minister and MP (Member of Parliament) for the East Surrey political constituency, said it was “possible to have effective regulation of Uber without penalising the consumers who benefit from more choice and lower prices”.
Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, which represents London’s black cab drivers, said the mayor had made the right decision.
“Since it first came on to 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.
Uber said in a statement the decision would “show the world that, far from being open, London is closed to innovative companies”.
“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,” the company added.
Uber’s maverick business model have caused it to get in hot water in numerous world cities. There were protests against the app in places as far apart as Rio de Janeiro and Paris. Last year, its founder and CEO, Travis Kalanick was forced to step down after allegations of sexual harassment at the company’s headquarters and a fiery exchange with one of his company’s drivers, caught on camera. Many observers say that the decision by TfL could deal a fatal blow to Uber.
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“Uber stripped of London licence due to lack of corporate responsibility” – Sarah Butler and Gwyn Topham, The Guardian/Guardian News and Media Limited (23 September 2017) https://www.theguardian.com/technology/2017/sep/22/uber-licence-transport-for-london-tfl
“Uber app” – freestocks.org, Flickr (12 January 2016) https://www.flickr.com/photos/freestocks/23707913564