UK

Why Has Uber Lost Its London Licence?

'We intend to immediately challenge this in the courts.'

22/09/2017 12:40 BST | Updated 22/09/2017 16:30 BST

On Friday London’s transport regulator stripped Uber of its license to operate, effective from the end of the month.

TfL accused the firm of being “not fit and proper” to hold a private hire operator licence, citing its approach to reporting serious criminal offences and how it obtained enhanced criminal records checks for drivers among the issues to have potential public safety and security implications.

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Uber has sensationally been stripped of its London licence (file picture) 

Why has Uber lost its licence?

Since its launch in 2012, Uber has had a tumultuous relationship with the London authorities and has faced ongoing criticism from unions, politicians and traditional black cab drivers over working and safety conditions, claims that it gridlocks roads and does not do enough to regulate its drivers.

In 2014 the Licensed Private Hire Car Association called on TfL to ban the service over concerns it was breaching regulations. The Licensed Taxi Drivers Association has repeatedly called on TfL to place the same restrictions on Uber which it places on the capital’s black cabs, including making drivers sit a geographical-style test called The Knowledge, which usually takes three or four years of training.

Black cab drivers have long argued the technology used by the firm is threatening their livelihood and accused the government of failing to regulate the industry. Last year The United Cabbies Group arranged a demonstration in Central London after claiming they had seen taking drop by 30 per cent. 

In March the High Court ruled in favour of TfL saying private hire drivers would have to pass a written English exam, which Uber said it would appeal on “unfair and disproportionate” grounds.

Uber did however claim victory over TfL’s demand that drivers have commercial insurance when vehicles were not being used as private hire vehicles.

In May, Uber’s licence was extended for just four months instead of the usual five-year term, prompting uncertainty about its future in London.

In August, a letter obtained by The Sunday Times revealed the “significant concerns” of Inspector Neil Billany, head of the Met Police’s taxi and private hire unit about the how the firm seemed to be “deciding what crimes to report”, telling police only about “less serious matters” that would be “less damaging to its reputation.”

Billany also accused Uber of “allowing situations to develop that clearly affect the safety and security of the public.” The newspaper revealed that almost two-thirds (62%) of people accused of minicab driving offences in London work for Uber. Of the 128 private hire drivers reported to police in June, 79 were working for the firm. The offences included causing death by dangerous driving, driving without insurance, speeding, careless driving and drink driving. 

Last month, Uber was accused by police of allowing a driver who sexually assaulted a passenger to strike again by not reporting the attack, along with other serious crimes.

London Mayor Sadiq Khan said he backed the decision to withdraw the app-based giant’s licence to operate in the capital.

“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,” he said. It would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.”

What does it mean?

The firm estimates that some 3.5 million passengers use the app in London and when TfL proposed strict new private hire rules in 2015 that would have limited Uber’s operations, more than 200,000 people signed a petition against them and the majority of the proposals was dropped.

A petition started by Uber’s London general manager Tom Elvidge on Friday calling on the public to ‘Save your Uber in London’ had more than 160,000 signatures by the afternoon.

However should the decision stick, millions of Londoners will be looking for alternative taxi apps. 

What happens next?

The final day of Uber’s existing license will be on 30 September, though the firm has vowed to appeal the decision. It has 21 days to appeal and may continue to operate until the appeal process has finished.

In a statement, it claimed the move would “show the world that, far from being open, London is closed to innovative companies.”

What does it mean for Uber employees?

According to Uber, “if this decision stands, it will put more than 40,000 licensed drivers out of work.”

The rights of Uber drivers is a murky area after a tribunal last year ruled they should be treated like minicab drivers with minimum wage rights and sick pay – something Uber is appealing against.

Globally, Uber has endured a long line of PR misfires and serious accusations. Earlier this year, a former Uber engineer accused the company of overlooking sexual harassment and bullying, leading to investor pressure which forced out former CEO and co-founder Travis Kalanick.

The app has been forced to quit several countries including Denmark and Hungary and faced regulatory battles in multiple US states and countries around the world.

It was banned in New Delhi, India, after a driver was accused of raping a female passenger, but the decision was later overturned.

The company pulled out of Austin, Texas, when it was told its drivers would have to undergo fingerprint background checks, but resumed services after the requirement was ended.

A union representing Uber drivers in London said its members face going bust as they rely on money from fares to pay for their cars.

James Farrar, chairman of the Independent Workers’ Union of Great Britain’s United Private Hire Drivers branch, said: “This is a devastating blow for 30,000 Londoners who now face losing their job and being saddled with unmanageable vehicle-related debt.”