Uber’s history of scandals and disregard for local rules finally caught up with it on Friday, when London declined to renew the ride-hailing company’s license to operate in the city, its largest European market.
Transport for London, the agency that oversees the city’s subways, buses and taxicabs, declared that Uber was not sufficiently “fit and proper.” The designation carries significant weight in Britain.
The decision, which Uber plans to appeal, raises the possibility that other cities could be emboldened to crack down on the company. Over the past few years, Uber has been temporarily forced out of a few major markets, like Delhi in India and Austin, Tex. Uber also voluntarily left China after selling its business there to a rival, Didi Chuxing. But it had never been told to leave a market as important as London.
Losing the license to operate in London presents a major challenge for Uber’s new chief executive, Dara Khosrowshahi, who replaced its founder, Travis Kalanick, in August. The company has faced an array of controversies over the past year or so, including charges of insufficient background checks on drivers, the use of software to evade the gaze of the authorities, and complaints of an aggressive, unrestrained workplace culture.
In an email to Uber employees obtained by The New York Times, Mr. Khosrowshahi said that he thought the London decision was unfair, but that “the truth is that there is a high cost to a bad reputation.” He added that “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.”
A ban on operating in one of its largest markets would certainly hit Uber’s bottom line. The company said it had 40,000 drivers and 3.5 million customers in London who used its app at least once every three months.
Mr. Khosrowshahi, in a Twitter post on Friday afternoon, acknowledged that Uber was “far from perfect” and urged city regulators to work out a solution with the company.
Less than a year ago, a British tribunal ruled that Uber could no longer treat its drivers as self-employed contractors and would have to meet tougher labor standards, including offering holiday pay and pensions.
“Fit and proper” is a benchmark that Britain applies across different industries and its charitable organizations to ensure that people or organizations meet the requirements of their industry or specialty.
“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,” Transport for London said in a statement.
Tests typically assess factors like an individual or company’s honesty, transparency and competence, though there is no formal exam. In Uber’s case, Transport for London said it had examined issues of how the company dealt with serious criminal offenses, how it conducted background checks on drivers and its justification for a software program called Greyball, which “could be used to block regulatory bodies from gaining full access to the app.”
In May, Transport for London extended Uber’s license by four months as it considered whether the company met that threshold.
“Providing an innovative service is not an excuse for it being unsafe,” London’s mayor, Sadiq Khan, wrote in The Guardian soon after the ruling was announced. “The regulatory environment is critical in protecting Londoners’ safety, maintaining workplace standards for drivers and sustaining a vibrant taxi and private hire market with space for a range of providers to flourish.”
- Uber loses London-licence for not being a ‘fit and proper’ transport company.