Uber wins court battle to keep operating in London

Uber has been given a 15-month probationary license to operate in London by a Judge after the ride-sharing service worked out most of its differences with regulators. The 15-month reprieve is far less than the five-year private hire license the company had previously received. Still, this is being considered “a big victory” for the company. 

What is the good news for Uber?

Uber will be able to continue operating in London, after a court decided the ride-hailing firm should be awarded a new 15-month probationary license, after being told of sweeping changes to its practices. The ride-hailing firm’s future in one of its biggest global markets had been in jeopardy after Transport for London (TfL), the authority that regulates transport in London, ruled last September that it was not “fit and proper” to hold a private hire vehicle operator license.

At the start of a two-day hearing, Uber admitted that London’s original decision not to renew its five-year license had been correct. TfL cited concerns about public safety and security, including a failure to report crimes or alleged crimes to the police and to conduct proper background checks on drivers. But Uber’s lawyers convinced Westminster magistrates’ court that it had since cleaned up its act while continuing to operate in the capital pending its appeal.

Changes include proactive reporting of serious incidents and ensuring drivers only operate in areas where they are licensed. TfL argued that Uber’s steps needed to be seen in the context of its past conduct, demanding a shorter license than previously awarded.

Lawyers for black-cab drivers had argued against licensing Uber. Gerald Gouriet QC, representing the Licensed Taxi Drivers Association, warned that an “Uber in sheep’s clothing” had appeared before the court. Uber says it has around 3.6 million passengers regularly using its service in London, with 45,000 drivers. Speaking after the verdict, Tom Elvidge, general manager of Uber in the UK, said: “We are pleased with today’s decision. We will continue to work with TfL to address their concerns and earn their trust while providing the best possible service for our customers.”

The mayor of London, Sadiq Khan, said: “I believe everyone must play by the same rules, no matter how big or powerful they are. After years of operating poorly in London, Uber has now accepted that TfL’s action in refusing to renew their license was totally justified. Today our stance has been vindicated by the court. “Uber has been put on probation – their 15-month license has a clear set of conditions that TfL will thoroughly monitor and enforce. “As a result of us standing up for Londoners, Uber has been forced to overhaul the way it operates not just in London but across the world.”

The chair of the London assembly’s transport committee, Caroline Pidgeon, said TfL would need to strongly enforce conditions, adding: “The safety of Londoners must come first and we will be keeping a close eye on the way Uber operates.”

The San Francisco-based firm attempted to draw a line under past controversies with the appointment of a new chief executive, Dara Khosrowshahi, last August, who said the company needed to change. Aside from the issues in London, Uber had been drawn into scandals including conduct in its head office, the treatment of staff, and allegations of using its software to evade regulators in other cities. Beyond compliance with London’s regulations, Uber has also offered some improved conditions for UK drivers, including limited insurance, limits on working hours and a 24-hour phone line for support. But it has continued to fight employment tribunal rulings giving rights to its so-called “partners”, leading to accusations of whitewashing rather than substantive change.

Why was it banned in the first place?

The decision in September 2017 came after years of controversy surrounding the app since it launched in London in 2012. TfL ruled that Uber was “not fit and proper” to hold a private hire license and had shown a “lack of corporate responsibility” in relation to public safety.

Safety: In the ruling, TfL raised concerns over Uber’s approach to reporting serious criminal offenses and how it obtained enhanced criminal records checks for drivers. Earlier this month MPs on the all-parliamentary group on taxis claimed the US firm was not a “fit and proper operator” following a string of alleged sex attacks by drivers. In August the firm was accused by police of allowing a driver who allegedly sexually assaulted a passenger to strike again by not reporting the incident.

Vetting process: Weeks later the vetting process for thousands of drivers offering the under-fire service was declared invalid after TfL decided minicab firms had to use its chosen contractor to apply for a DBS check. Mayor of London Sadiq Khan previously said he did not let his teenage daughters use the app. Enhanced DBS checks are British background checks — an issue on which cities across the world have criticized Uber for falling short.

Driver licenses and pay: Uber also came under fire for the way in which drivers were treated amid calls to pay them minimum wage. Uber does not class drivers who use the app as employees but as self-employed, meaning they are not legally entitled to the minimum wage, sick pay or holiday pay. In April, the firm announced plans to offer sick pay but it later emerged those interested would have to pay £2 a week for basic cover.

Greyball: Uber is under fire for using the software that could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties.

London’s iconic black cab’s opposition: Black cab drivers across the capital have also taken issue with Uber. They have previously accused the firm of dominating their trade since the app launched in London in 2012. Hundreds of the city’s cabbies have held protests at Whitehall and outside Uber’s HQ over “deregulation” of the trade, highlighting the threat to passenger safety. In February, a fresh row erupted when the company offered cabbies a year’s free trial of the app to attract more customers. Uber argues that instead of restrictions on its business, “unnecessary burdens” on black cabs should be cut.

Where else has Uber faced problems?

Bulgaria: Uber suspended services after being accused of “unfair trade practices”. The chairperson of the transport committee, Grozdan Karadzhov said that if Uber wants to return to the Bulgarian market, it will have to meet the minimum requirements of legislation and register as a taxi service.

Denmark: Taxi meters have been made mandatory for Danish taxi drivers, meaning Uber was forced to pull out of the market this year after operating there since 2014.

Italy: Uber will soon be completely banned from the country after its business practices were found to “constitute unfair competition”. Uber's services have been blocked, and it is not allowed to advertise. The company is permitted to continue operating until a final court ruling is made, but that time will soon run out.

Hungary: The Hungarian government passed legislation saying that Uber drivers “breached regulations other taxi firms must adhere to” after allowing them to operate for two and a half years. The new law permits the Hungarian national communications authority to block Internet access to "illegal dispatcher services".

Europe: Uber has also faced suspensions in Finland, France, Spain and the Netherlands, primarily over its UberPOP service. Barcelona’s main taxi operator accused the company of running an illegal taxi service and is currently awaiting a ruling from the European Court of Justice.

Austin, Texas: The company pulled operations from the Texas city after being told to fingerprint and background check all prospective and current drivers, which it said did nothing to improve safety and penalized minorities.

Alaska: Uber operated for six months in the state, before pulling out over a dispute as to whether drivers were independent contractors or registered taxi drivers – which would mean they are entitled to workers' compensation insurance. Uber paid a $77,925 fine to the Alaska Department of Labor and Workforce Development over the dispute, before abandoning the Alaskan market. New legislation could change that, but for now, the state remains Uber-less.

Vancouver, British Columbia: Rideshare apps are not legal in Vancouver. The Liberal Party promised earlier in 2017 to move forward with legalization and make Uber possible in the city by Christmas. Transport Minister Todd Stone said: “We think we are striking a balance between what the vast majority of British Columbians want…all the while…respecting the industry that’s been there for so many generations and get this right to protect the jobs that already exist.”

Taiwan: Services were suspended after Uber faced millions of dollars' worth of fines by the government. However, it has reached an agreement to use rental car agencies on the ground under the Uber brand, but the service remains limited.

Northern Territory, Australia: The territory has completely banned Uber after refusing to change the law to accommodate the app's legality. It will allegedly re-evaluate this at a later date but, for now, Uber remains out in the cold.

How careful should Uber be?

Just a few weeks after Dara Khosrowshahi inherited an already scandal-ridden company, Uber’s new CEO was thrust into a regulatory gauntlet with London lawmakers. The agency that oversaw the ride-hail and taxi industries had chosen not to renew Uber’s license to operate, effectively instating a ban on the company in the city.

Fast-forward to today, about 10 months into Khosrowshahi tenure as CEO, and the new Uber he built has won the right to continue to operate in London — at least for 15 months. The logic: It was the old, win-at-all-costs company that London banned, and it’s the new, friendly, do-the-right-thing company that Uber is purporting to be that a court has granted a license.

Uber 2.0 scored a big win in its biggest market in Europe, but now it has to prove that it will maintain its commitment to being the refurbished company it’s pitching itself as — not just to London but also to the public in all the markets it operates in.

The London court has crafted its license to ensure just that. As a condition of its 15-month probational license, Uber will be audited every six months. London Mayor Sadiq Khan warned that the city would be watching Uber very closely. The 15-month probational license was already a concession for Uber — originally the company sought a five-year license.

Now, every six months, Uber will also be held accountable to its commitment to do things like proactively reporting serious incidents that happened on the Uber platform to police — which the company says it has already begun to do.

Uber will be producing an assurance report every six months, and it will be reviewed independently by a third party — though it hasn’t been determined who that party will be. If it fails to meet the city’s requirements, the company could be forced to re-litigate its ability to operate in London and tarnish the image of a refurbished company it has worked so hard to cultivate.