English Corner

Image: Uber

Uber banned from operating in London

Ben West

Uber has had its licence to operate in London rejected – the latest event in the backlash against the company.

London’s transport authority’s move on Friday to reject Uber’s application for a new licence to trade after 30 September has been a surprise to many – not least many of its 3.5 million users in the UK capital and 40'000 drivers, who will now be fearing for their jobs.

However Uber won’t disappear for some time as Uber plans to challenge the ruling in the courts, and the legal fight could take months. The company clearly plans to fight back aggressively: within a couple of hours it was inviting Londoners to sign a petition against the ruling, saying that the Mayor of London, Sadiq Khan, and Transport for London (TfL) ‘have caved in to a small number of people who want to restrict consumer choice.’ More than 100'000 people supported the petition within hours.

While many users, Uber drivers and some politicians were incredulous at the decision, employment rights campaigners and the trade body for London’s traditional black-cab drivers, who have long-opposed the US-based company approved of it. They say that the company is immoral, breaks the law, exploits drivers and refuses to take responsibility for the safety of passengers.

TfL rejected the licence application because «Uber’s approach and conduct demonstrate a lack of corporate responsibility» concerning driver background checks, the reporting of serious criminal offences and obtaining medical certificates from drivers. It also objected to the company using computer software that can block regulatory bodies from gaining full access to its app and undertaking regulatory or law enforcement duties.

Hailo, Kabbee and Gett are waiting in the wings

If Uber is successfully stopped in London, it won’t mean the end of such firms, as rivals such as Hailo, Kabbee and Gett are waiting in the wings to capture more of the market. And Uber remains operating in other locations around the UK, with no plans to take away its licences there.

While criticism of the decision to terminate Uber’s licence centred on it limiting customer choice, especially for those users who could not afford more expensive black taxis, and a resistance of developing computer technology allowing such apps, employment unions broadly supported the move, having previously called on Uber to guarantee basic employment rights and safeguard minimum pay and holiday pay for drivers.

Labour Member of Parliament Frank Field had said, while chairing a Parliamentary report into Uber working practices, that drivers were treated as Victorian-style ‘sweated labour’, worked very long hours, and some earned less than the UK minimum wage.

Accused of scandals involving allegations of bullying and sexism

In recent years Uber has been accused of scandals involving allegations of bullying and sexism, while former chief executive and co-founder Travis Kalanick was forced out by investors this summer.

With Uber now present in more than 70 countries worldwide, the company has increasingly been under pressure in more and more markets: it has stopped operations in Bulgaria after the country’s transport committee accused it of unfair trade practices. It will soon not be allowed to operate in Italy following its transport regulators finding that its operating practices represent unfair competition. In Hungary it has been seen to have breached taxi regulations. Uber has also faced suspensions in France, Finland, The Netherlands and Spain, chiefly over its UberPOP service.

In Denmark taxi meters have been made a legal requirement, forcing the company to pull out of that territory, while Barcelona’s main taxi operator went to the European Court of Justice to complain about Uber.

Worldwide, the company has experienced further woes: it was bought out by a Chinese competitor after losing huge sums in the Chinese market. It was hit by huge fines by the Taiwanese government, although an agreement has now been reached, but not without restrictions on its service. Uber was also subjected to fines in Alaska, prompting it to leave the state. Australia’s Northern Territory has banned the app, and ride share apps are not permitted in Vancouver, Canada, although it is anticipated that they will become legal at the end of the year.

If that wasn’t enough, in April this year the company disclosed losses of $2.8 billion before interest, tax, depreciation, and employee stock options, prompting The Financial Times in London to state that Uber is «cementing its place as the most heavily-lossmaking private company in the history of Silicon Valley.»

Who said the gig economy was alive and well?