The end is far from nigh for Uber, but Transport for London’s decision not to renew its licence is another wounding blow. Even after the controversies that the ride-hailing app has faced worldwide and the concerted opposition of unions, employment-rights lawyers and black-cab drivers, few expected TfL’s verdict that Uber is not a “fit and proper” firm to run taxis in the capital.
While Uber’s battle to survive in London will take place first in the courts, political heat will be piled on the capital’s mayor, Sadiq Khan, during an appeal process that could take a year or more to play out.
For Uber to highlight the livelihoods of 40,000 drivers may seem a bit rich from a firm that has long insisted it does not employ them and is fighting rulings on workplace rights for its “partners”.
Its trump card could be consumer sentiment, with about 3.5 million Londoners using the app, many finding Uber more convenient and cheaper than traditional black cabs. As with Ryanair, passengers have flocked to a cheaper transport alternative without worrying unduly about the employment practices: a petition (started by Uber) calling on Khan to reverse the decision quickly reached 200,000 signatures on Friday.
However, rivals claim the US cab-hailing app’s fares are artificially low, that its “surge pricing” – increasing fares in line with demand – shows a more accurate picture of what an Uber monopoly could look like. Uber says prices are not due to subsidy but the efficiency and scale of its system.
The technology itself has not proved difficult for rivals to emulate, simply the scale of its business. If the rapid global spread of its brand made it appear unstoppable, it could yet prove the MySpace of taxi apps, with competitors emerging worldwide.
In the wake of London verdict, Google searches for Hailo, a similar app using black cabs, and Addison Lee, the largest single private-hire fleet in London, rocketed. Uber has already prompted traditional minicab firms to up their game, with many now likewise providing detail to customers on time of arrival, fare, driver’s name, car type and registration.
TfL is adamant that the licence decision is not about Uber’s technology, despite past courtroom tussles over the app’s workings. Instead, the issues are Uber’s conduct and approach – noises that chime with global concerns right up to its Silicon Valley head office, where allegations of a culture of sexism and bullying led to co-founder Travis Kalanick stepping down as chief executive.
Some have voiced suspicions of political grandstanding by Khan on the eve of the Labour party conference. TfL’s view is that Uber’s time is up for quick fixes, after a four-month extension to their licence granted in May. Khan had the unanimous backing of the London Assembly in June to reject Uber unless it reviewed its practices.
The charge sheet against the company covers medical and background checks on drivers and reporting serious criminal offences, all of which are now likely to be argued out in court. Authorities have also been grappling with the growing headache of congestion, with thousands more private-hire vehicles on the capital’s roads, and also increasing complaints about “cross-border” drivers licensed in London plying for trade around the country.
Uber has a fight on its hands, at a time when its close connections in British politics are diminished. Although it has faced suspensions and bans in a host of European countries, to be forced out of a major global city would be a serious reversal for a firm whose near-$70bn (£52bn) valuation of 2016 now looks ever more dubious.