The non-renewal of Uber’s licence is the first step in what is bound to be a long legal battle and has come as something of a surprise. Transport for London has long been accused of being supine in relation to Uber, ignoring its numerous contraventions of the regulations and complaining that its hands were tied.
However, Uber sloppiness and light touch oversight of its drivers has now proved too much even for TfL’s relaxed regulators. The most publicised Uber failing was its reluctance to report criminal offences by its drivers, something which attracted criticism from the Metropolitan Police. The company seemed to be ready to report minor misdemeanours while ignoring assaults on female passengers.
However, it was Uber’s attempt to dodge TfL’s attempts to discover whether the company was keeping within the law which actually got its goat. It used a software programme called Greyball to block users, who had been identified as mystery shoppers working for tfl, from obtaining a ride. The revelation of this practice, in March, incensed TfL as it demonstrated that Uber is a company that is out of control and unwilling to submit itself to normal regulatory practices.
It is, too, perhaps no coincidence that this licence decision has occurred just after the departure of Leon Daniels from his post as managing director of surface transport. Daniels who left his post this month has long been criticised by the unions for his failure to take action against Uber.
The decision not to renew the licence has not, however, been taken in response to the key problem created by Uber, which is to have flooded the streets with a supposed 40,000 drivers who are exempt from the congestion charge. This has led to a slowdown in central London speeds and much loss of revenue from the capital’s highly regulated black cab trade.
Nor has it addressed the issue of Uber’s business model which is fundamentally flawed. Uber currently subsidises every ride, charging around 20-30 per cent less than a breakeven fare, in order to drive competitors out of business.
These are the long term problems with Uber which this decision, taken for administrative reasons, fails to address. The more fundamental questions around the introduction of Uber therefore remain unanswered, such as how to control this behemoth which seems to have endless funding from Goldman Sachs and various high tech investors benefitting that have access to monopoly profits from flooding London’s streets and wrecking its cherished cab trade. Watch, meanwhile, for a long drawn out legal case and a war of words.