Uber’s application for a new London operating licence has been turned down after at least 14,000 trips were made with drivers who were not the ones shown on the popular app.
The ride-hailing firm will not be given a new private hire operator’s licence, said Transport for London (TfL), due to “several breaches that placed passengers and their safety at risk”.
The decision was described as “extraordinary and wrong” by Uber’s CEO in a tweet, while the company pledged to “continue to operate as normal” while it launches an appeal against the decision.
“Uber have 21 days to appeal, and they are doing so, so now we are probably looking at 18 months to two years – certainly an extended period of time – while that could possibly go through to court action,” said Al Jazeera’s Paul Brennan, reporting from London.
“In the meantime, they’re going to have to firefight this legal action, though in the short-term what we’re looking at is Uber continuing to operate on the streets of London, even though TfL are trying to stop them.”
TfL found that a change to Uber’s systems allowed unauthorised people to upload their photographs to legitimate driver accounts, enabling them to pick up passengers.
This happened for at least 14,000 trips in late 2018 and early 2019, which put “safety and security at risk”, the transport body warned.
All of these journeys were uninsured and some took place with unlicensed drivers – including ones who had previously had their licence revoked.
Another failure allowed Uber drivers who were dismissed or suspended to create a new account with the firm and continue carrying passengers.
TfL accepted that Uber had taken steps to prevent fraudulent activity, but expressed concern that the company’s systems were “easily manipulated”.
“While we recognise Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured,” said Helen Chapman, the transport body’s director of licensing, regulation and charging.
“It is clearly concerning that these issues arose, but it is also concerning that we cannot be confident that similar issues won’t happen again in future.”
London Mayor Sadiq Khan, who chairs TfL, acknowledged that the decision “may be unpopular with Uber users” but insisted that “their safety is the paramount concern”.
He went on: “Regulations are there to keep Londoners safe, and fully complying with TfL’s strict standards is essential if private hire operators want a licence to operate in London.”
Uber said it had audited each of its 45,000 drivers in London over the past two months, and had robust systems in place to confirm the identity of drivers.
“We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong,” said Chief Executive Officer Dara Khosrowshahi.
“Over the last two years, we have fundamentally changed how we operate in London. We have come very far and we will keep going, for the millions of drivers and riders who rely on us.”
Uber’s licence expires at 11.59pm on Monday, but it is allowed to continue to operate until the appeal process is completed.
TfL pledged to “closely scrutinise” the firm during this period.
The transport body first refused to renew the company’s licence in September 2017 amid safety fears.
After the firm appealed against the decision, it was handed a 15-month licence by a judge in June 2018.
When this expired in September, it was granted a two-month licence by TfL.
Uber, which says it has 3.5 million customers in London, has disrupted taxi operators in many cities worldwide – including drivers of London’s famed “black cabs” – with its app-based ordering and demand-linked pricing structure, said its systems were robust and that it would also introduce a new facial matching process.
Uber’s shares listed in Frankfurt were down more than 3 percent at 13:30 GMT.
The terrible price of Transport for London’s inability to run a stable regulatory regime and Uber’s refusal to play by the rules will be paid for by the most vulnerable workforce in London
JAMES FARRAR, IWGB UNION
The Silicon Valley company has run into regulatory barriers and a backlash in several markets, forcing it to withdraw completely from places such as Copenhagen and Hungary.
In London, black cab drivers who see Uber as a threat to their hard-won livelihoods have in the past blocked streets in protest, arguing that they are being unfairly undercut by an inferior service.
The more than 22,000 “cabbies” are required to memorise the thousands of streets and landmarks within a six-mile radius of central London and pass a legendary test known as The Knowledge in order to be licensed to pick up passengers on the street.
A requirement since 1865, the process can be costly and takes on average three to four years to complete.
Drivers for Uber and smaller rivals such as Kapten and Bolt, helped nowadays by satellite navigation apps, face no such stipulation.
It’s important that giant multinational companies like Uber are not allowed to flout the rules and put passengers at risk
ANDU MCDONALD, SHADOW TRANSPORT SECRETARY
Shanker Singham, director of trade and competition at free-market think-tank the Institute of Economic Affairs, said it was “a dark day for competition and progress in the UK”.
“Uber and other platforms like it give consumers real alternatives to the monopoly enjoyed by London’s black cab industry.
“As with any regulatory crackdown on new entrants, this action will harm London’s consumers, particularly damaging the least well-off who cannot afford the high cost of black cabs.”
Confederation of British Industry Chief UK Policy Director Matthew Fell said: “Uber’s popularity shows that customers value the service and choice that their innovative technologies offer.
“TfL, of course, have to be confident around safety issues, so we’d encourage both sides to continue the dialogue to determine what changes are required in order that Uber’s customers can continue to enjoy the service in the long term.
James Farrar, chairman of the United Private Hire Drivers branch of the IWGB union, warned that TfL’s stance would “come as a hammer blow” to its drivers.
“Many will now face the distress of facing not only unemployment but also crippling debt as they struggle to meet car lease payments,” he said.
“The terrible price of Transport for London’s inability to run a stable regulatory regime and Uber’s refusal to play by the rules will be paid for by the most vulnerable workforce in London.”
Steve Garelick, regional officer at the GMB union, claimed that Uber had “pulled more stunts than a Hollywood movie” and claimed it was “time for them to accept their responsibilities”.
Labour’s shadow transport secretary, Andy McDonald said: “Innovative technologies have an important role to play in our transport networks, but endangering passengers, tax avoidance and a crisis of low pay is not a price worth paying.
“It’s important that giant multinational companies like Uber are not allowed to flout the rules and put passengers at risk.”