TFL announced last week that Uber will not be issued with a new private hire licence. The decision was taken primarily on the grounds of “public safety and security implications”. This has left some 3.5 million London Uber customers as well as 40 000 drivers particularly bereft. Meanwhile the anti-Uber lobby have hailed this moment as a breakthrough in the “gig-economy” fightback. Mayor of London Sadiq Khan entered the debate on the same day to reassure all sides of a reasonable solution.
This controversy is the latest in a long line of high profile scandals for Uber, the last being CEO Kalanick quitting earlier this year with allegations of sexism and malpractice within the company. The multinational taxi app made an astonishing $6.5 bn in 2016 after just eight years in business. The success of Uber is reflected in the death of competition for the company, with its only serious rival Lyft far behind in terms of size.
The announcement in London has highlighted the rift between pro and anti-Uber factions within the country. Supporters of Uber argue that the app embodies an exciting improvement in the taxi market which provides a far more affordable option to the traditional black cab alternative. Uber allows passengers to find taxi drivers through an app platform which nullifies the need for expensive offices and administrative expenses. However, critics of Uber argue that the lower prices have also been achieved through tax and regulation evasion.
So important is the TfL decision not to renew Uber’s licence, that new CEO Dara Khosrowshahi is expected to make a trip to the UK capital to meet with regulators. When considering that London is Uber’s largest European venture this may come as slightly less of a surprise. Uber’s experience in London so far has been far from an easy ride, with numerous protests staged by traditional black cab drivers and regulatory tension from the start. Uber supporters believe such protests are bitter ramblings of an outdated class of workers who have had their infamous ‘Knowledge’ test rendered useless by technological improvements in SATnavs.
On top of this, the pro-Uber lobby argue that Uber has revolutionised the taxi market through the use of modern application technology which allows greater competition and of course, lower prices. Uber drivers can set up their business with little more than a car and smartphone allowing for a proliferation of drivers which lowers the market price. Customers are welcomed to the app with significant discounts on top of offers for friends who join the app as well. Drivers and customers then rate each other after each trip to be given a score out of five. Many argue that Uber has actually improved safety by allowing a whole class of people who previously could not afford taxis, to be able to do so and as such get home more safely at night.
Mayor of London Sadiq Kahn fully supported TfL’s decision, arguing that the regulator’s findings highlighted key holes in the safety procedures Uber should legally abide by. Primarily this concerned Uber’s responsibility to report serious criminal offences and carry out detailed checks upon its drivers. The Mayor made particular efforts to ensure it didn’t look like he was promoting an anti-Uber agenda. This was reflected in his choice of wording which chose to focus more upon ensuring Uber “play by the same rules” rather than a swiping statement on Uber purposefully employing irresponsible corporate tactics. Indeed, such a conciliatory tone has been expanded further in Kahn’s latest offer for talks.
This challenge may be important to Kahn’s much talked about project, “London is open” which has been supported by a huge media campaign promoting the city to tourists and investors. Indeed, denying the business of one of the biggest technology companies in the world does not exactly appeal to Kahn’s plans of London as one of the world’s technology hubs. Uber supporters have responded by starting a petition with almost a million signatories supporting the licence to be renewed.
However, the anti-Uber lobby argue that the Mayor’s statements don’t go anywhere near far enough in condemning what they see as a ruthless corporation’s efforts to rip-off staff and customers. This is supported by the fact that Uber has avoided significant corporation taxes and denied sick and holiday pay to their drivers. Uber is able to do this by claiming that their workers are self employed as they can technically work whenever. Of course in reality nearly all Uber drivers work for the company as if it were a full time job. Critics argue this is mere corporate exploitation in the digital age. On top of this, Uber opponents point out that Uber’s business model is based upon securing monopoly ownership of the taxi market which will lead to consumers paying higher prices in the long term.
Uber’s current turmoil in London is unlikely to result in the loss of its private hire licence. More likely an appeal will be made wherein Uber is forced to accept considerable reform to its safety procedures in return for a renewed licence. This conclusion is unlikely to satisfy either side of the debate, with supporters possibly facing higher prices from increased regulation, and opponents witnessing a reborn Uber juggernaut. It may however point towards a better middle ground and a step towards greater harmony in the London taxi market.