TfL Drives Uber Out of London

By Gerald Bannon

In 2012, just before the Olympics arrived in London, England, Uber received a private-hire license to run its ride-hailing operation in and around the city. In the five years since, to say that Uber has faced its fair share of controversy would be an understatement. From strict regulations telling drivers where they can and cannot pick up passengers to disputes with black-cab drivers claiming that Uber is hurting their business, the company has spent the better part of its time in London proving to regulators why its license should not be revoked. Unfortunately, just days ago Uber lost this battle as Transport for London (TfL, the main regulator of transportation within the city) voted not to renew Uber’s private-hire license that expired on September 30th.

TfL cited numerous reasons for deciding not to renew Uber’s license, including the company’s approach to reporting criminal offenses between drivers and riders, its failure to conduct background checks on drivers, and its use of “Greyball” software to evade authorities and selectively choose passengers. Uber claims that it “follows the rules” in regard to reporting offenses, but admits that it “has gotten things wrong” and apologized “for the mistakes [it has] made.” London’s mayor and Chair of TfL Sadiq Khan announced his support for the decision, stating that “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.”

Uber is also facing questions over its payment and tax structure in the United Kingdom. Uber fares in London do not include a value added tax (VAT), a tax that is placed on many goods and services within the U.K. Uber accomplishes this by booking all of its rides in London through a Dutch subsidiary, thereby skirting VAT regulations. Although this is a matter handled by HMRC (Her Majesty’s Revenue and Customs), a few TfL board members did raise it as a concern when discussing the company’s license renewal. Ultimately, because this is a matter outside of TfL’s purview, it was not cited as a factor in the board’s decision not to renew the company’s private-hire license, but there is no telling whether it may have weighed on the minds of the regulators when making their decision.

A statement from Uber claimed that by failing to renew the license, TfL was actively “restricting consumer choice” in terms of the transportation options that are available to Londoners. This decision takes a step back from encouraging competition and consumer interests rather than just protecting established businesses. Critics also feel as though this decision sends a message that Britain will use regulation to keep new companies and services out of its markets, contradicting Theresa May’s recent message that Brexit can only be successful if the country becomes more welcoming to competition.

At a time when more and more people are choosing not to own cars, Uber has made it safer for people to get around London, because they no longer need to walk up and down the street waiting for an available black cab. With the Uber app, riders can request a ride right from their location and follow their car’s progress as it approaches. Critics of this decision believe that by banning Uber the number of unlicensed mini-cab drivers trying to skirt TfL regulations will increase, leading to unknown safety risks for passengers.

In response to TfL’s decision, an online petition was started and receiving about 1,000 signatures each minute from those who wished to keep Uber on London’s streets. Many of these signatures come from the approximately 3.5 million active Uber users in London, as well as its nearly 40,000 drivers.

Uber has plans to challenge TfL’s decision in court, but such an appeal is expected to take months to yield any results. As long as the company files its appeal within 21 days, the 40,000 Uber drivers in London will continue to operate as usual until the appeal is decided.

Will TfL be successful in driving Uber out of London? Only time will tell.

References

Helena Horton, Hundreds of Thousands Sign Petition to ‘Save Uber’ as up to 40,000 Drivers Face Unemployment, THE TELEGRAPH (Sept. 22, 2017), available at http://www.telegraph.co.uk/news/2017/09/22/petition-save-uber-goes-viral-hits-16000-signatures-less-hour/ (last visited Sept. 30, 2017).

Rohan Silva, London’s Uber Ban Hurts Passengers, Drivers and the Whole British Economy, THE SUNDAY TIMES (Sept. 24, 2017), available at https://www.thetimes.co.uk/article/londons-uber-ban-hurts-passengers-drivers-and-the-whole-british-economy-63z5qp9kh (last visited Sept. 30, 2017).

Julia Kollewe & Gwyn Topham, Uber Apologises After London Ban and Admits ‘We Got Things Wrong’, THE GUARDIAN (Sept. 25, 2017), available at https://www.theguardian.com/business/2017/sep/25/uber-tfl-concerns-vows-keep-operating-london-licence (last visited Sept. 30, 2017).

Leslie Hook, Uber Chief Weighs Trip to London to Lobby Against Ban, FINANCIAL TIMES (Sept. 26, 2017), available at https://www.ft.com/content/c281123a-a257-11e7-9e4f-7f5e6a7c98a2 (last visited Sept. 30, 2017).

Connor Sullivan & Leslie Hook, Transport for London Board Member Raised Questions on Uber and Tax, FINANCIAL TIMES (Sept. 27, 2017), available at https://www.ft.com/content/1c4e11ea-a35d-11e7-b797-b61809486fe2 (last visited Sept. 30, 2017).

Aliya Ram, New Car-Hailing App Banned in London, FINANCIAL TIMES (Sept. 8, 2017), available at https://www.ft.com/content/f0ad1362-92d4-11e7-a9e6-11d2f0ebb7f0 (last visited Sept. 30, 2017).