FILE PHOTO: A photo illustration shows the Uber app and a bus in London, Britain, June 25, 2018. REUTERS/Henry Nicholls/Illustration/File Photo
TfL finds no fault with the idea of a technology platform that joins drivers with passengers. What TfL does take issue with is Uber's safety © Henry Nicholls/Reuters
Experimental feature

Listen to this article

00:00
00:00
Experimental feature

The days of Londoners being able to hail cheap rides home from nights out using Uber may soon be numbered. Transport for London, the public body in charge of the capital’s transport, on Monday stripped the company of its licence to operate for the second time. It cited continuing concerns over passenger safety and the security of the ride-sharing app. Uber, it ruled in a damning assessment, was not a “fit and proper” company to operate in the city.

The decision will be deeply unpopular with the thousands of Londoners who have come to rely on Uber as a low-cost and easy mode of transport. Dara Khosrowshahi, the company’s chief executive, condemned it as “just wrong”. Business groups as well as leading entrepreneurs queued up to criticise the decision, accusing TfL of bowing to pressure from entrenched interests opposed to Uber, notably London’s black cab drivers, and of stifling technology innovation. The CBI, the main business lobby group, called on both sides to “continue the dialogue to determine what changes are required” to enable Uber customers to enjoy the service in the long-term.

TfL should stick to its guns. Its decision — arrived at only after it gave Uber a two-month grace period to find answers to queries — shows it has no objection to the company’s business model. It finds no fault with the idea of a technology platform that joins drivers with passengers. What TfL does take issue with is safety, notably two flaws in the Uber system that allowed non-accredited drivers to assume accredited drivers’ identities, and in some cases allowed drivers to operate without insurance. It estimated that 14,000 rides were carried out by 43 drivers who exploited a loophole in its systems that allowed them to upload their photos to another driver’s account.

Uber says its drivers make millions of journeys each week in London so that number needs to be seen in the wider context. But as the child abuse scandals involving minicab drivers in cities including Rotherham and Rochdale demonstrated, the safety of passengers should be paramount. Uber needs to protect its passengers, and TfL is right to reject its licence if Uber is not able to do so.

The San Francisco-based company’s achievements as a disrupter should not be underestimated. Since its launch on May 31, 2010, Uber has upended transport systems in cities around the world. In the UK, it is used in more than 40 towns. The stakes, however, are high. London, with 3.5m riders and 45,000 licensed drivers, ranks as one of Uber’s top five cities globally. HSBC estimates that gross bookings could be close to $3bn.

Uber deserves credit for a new approach under Mr Khosrowshahi. He has tried hard to change the company’s rule-resistant culture as well as introduce a greater focus on safety processes since the ousting of Travis Kalanick, its abrasive founder. The incidents, however, raise questions whether the same loopholes might exist in other countries. Uber on Monday said it has implemented “a series of technical and operational fixes, which have been changed globally”.

This is the second time that Uber has been found wanting and had its London licence revoked. The latest incident underlines the challenges for a global technology company having to adapt to local regulations. It has 21 days to appeal, but in reality it is unlikely to be heard before Christmas. Mr Khosrowshahi should use the intervening time to show that Uber is willing to listen to local problems, and use its undoubted technological prowess to respond to them.

Get alerts on Uber Technologies Inc when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article