Not so 'Appy' now! Uber loses right to operate in London

Submitted by admin on Fri, 09/22/2017 - 10:55

This morning news broke that TfL has refused a private hire licence to taxi app Uber. Yes, we couldn’t believe it either! But don’t worry, before you get on the phone to pre-book your taxi two days in advance, contemplate walking home on a cold Friday night, or worse yet brave the night bus (the horror!), let’s take a look at what TfL’s decision means for Londoners.

So what's brought this about?

In 2012 Uber started operating in London under a 5 year licence issued by TfL. The licence was due to expire in May 2017, so TfL extended it – but only by 4 months. This short extension was unusual and resulted in rumblings that the future of the company in London was looking uncertain. This was all set against the backdrop of protests in London from black cab drivers, petitions by the unions on workers’ rights and various legal challenges to worker status brought by drivers.

What’s the rationale behind TfL’s decision?

Uber seems to have been on TfL’s radar for some time. The 4 month extension in May 2017 was issued to allow TfL more time in which to decide a 5 year licence, in light of concerns about the way Uber operated. Ultimately, the licence was refused today for reasons of passenger safety.

TfL said 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.” In particular it criticised Uber’s approach to reporting serious criminal offences, the manner in which Enhanced Disclosure and Barring Service (DBS) checks are obtained, and its use of software that could be used to block regulatory bodies (such as TfL) from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties. TfL’s full statement can be viewed here .

In response, Uber said that TfL’s decision has “shown the world that London is closed to innovative companies”, and that it “will put more than 40,000 licenced drivers out of work and deprive Londoners of a convenient and affordable form of transport.” The Mayor of London Sadiq Khan backed TfL’s decision saying that “all companies in London must play by the rules and adhere to the high standard 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.”

Is this the first instance of an Uber ban?

No. In a claim brought by traditional taxi drivers in Rome, Italy banned the app in April 2017 citing unfair competition. This was however short-lived, and by May 2017 the decision was overturned. In Denmark, taxi meters were made mandatory and some other requirements were imposed on operators, causing Uber to pull out of the market. At that time, they had already removed the app from Hungary and Bulgaria, due to onerous regulatory requirements.

Is Uber really leaving London on 30 September 2017?

In short, no. Uber has 21 days in which to appeal, and it intends to do so. Until such time that the appeal process has been exhausted, Uber can continue operating in London. Nevertheless, the decision will no doubt reverberate to all the other countries where the app operates, and it remains to be seen what wider implications this decision will have for Uber. This afternoon Uber has emailed all app users with the subject line ‘Save your Uber in London’. The email asks users to sign a petition, stating that “By trying to ban the app from the capital, the Mayor and Transport for London have caved in to a small number of people who want to restrict consumer choice”. It also urges users to sign the petition “and defend the livelihoods of 40,000 licensed drivers”.

As for London and the UK in general, there are concerns that TfL’s decision may affect the economy in that future global businesses and tech start-ups could be put off from setting up here or expanding to our shores. We hope this will not be the case, as London has so much to offer (apart for a reliable night bus service!).