London Revokes Uber's License for the Second Time Citing a ‘Pattern of Failure' Over Rider Safety
Uber's massive global expansive was a result of an aggressive push into cities, often bypassing local regulators in a winner take all approach in disrupting the aging taxi model. For those customers looking for a conveintant ride without having to deal with often unreliable taxi services, Uber's ride-hailing service was welcomed. However, for cities that tightly regulate their taxi and limousine services, Uber's push into cities was met with resistance, especially in London.
The regulator Transport for London (TfL), citing a "pattern of failure" with rider safety and security, has revoked the ride-hailing giant's license for the second time in under two years in Both were issues that Uber failed to address as promised after first time Uber's license was revoked.
London is one of Uber's largest global market and the company has around 45,000 drivers serving around 3.5 million passengers per year.
Uber said it would immediately appeal the decision, allowing its drivers to continue to pick up passengers despite the license expiring on Monday.
"Over the last two years we have fundamentally changed how we operate in London," tweeted CEO Dara Khosrowshahi today. Khosrowshahi took over as the company's new CEO just weeks before Uber's London license was suspended for the first time.
Among the more serious safety concerns in London was that unauthorized drivers were able to upload their own photos to others drivers' accounts. On at least 14,000 ride-hailing trips, a driver other than the advertised one picked up passengers, the TfL said.
TfL said it had "identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk", and that some journeys had been uninsured.
"TfL does not have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time."
Uber was first stipped of its London license in 2017
Uber was stripped of its licence for the first time in Sept 2017. At the time, TfL citied "public security and safety implications" following numerous complaints the company was failing to properly screen its drivers.
As with Monday's decision, Uber appealed its first suspension. The company was permitted to continue operating as usual throughout the appeals process, which began in December, 2017.
Uber won its first appeal and in June 2018, Uber told the court that it "fully accepts that [TfL's] decision was justified" and said the company has "since acknowledged and apologized for their past mistakes and made far-reaching changes to address them."
Uber recognized that changes were necessary and "started to embark on a program of cultural and governance change, led by the appointment of a new global CEO, Dara Khosrowshahi."
After Uber's new initiatives to address TfL concerns, the Westminster Magistrates' Court found that the company was "fit and proper" to hold the licence, and granted the firm's appeal after it agreed to an audit.
In June 2018, Uber requested an 18-month licence but was granted a probationary 15-month licence instead. Uber previously sought a 5-year license to pick up passengers in London. The ride-hailing company also agreed to pay TfL's costs of £425,500 ($548,700).
In September 2019, TfL granted Uber a two-month extension, which expired on Monday, leading to Uber's second suspension.
Uber Met with Resistance from London's Cab Drivers
Uber, app-based ride-hailing service and dynamic pricing based on real-time demand have disrupted the traditional taxi model in cities worldwide.
However in London, the city's traditional "black cab" drivers fought back hard and view Uber as a threat to their livelihoods. Since 2014, cab drivers have blocking streets in protest, arguing that they are being unfairly undercut by an inferior service.
London's black cab drivers are held to high standards. Unlike Uber's relatively simple onboarding process, each black cab driver in London must pass a series of tests known as "the knowledge" before being granted a license to operate in the capital city.
Black cab drivers must know some 320 routes and 25,000 streets without using GPS. They also memorize roughly 20,000 local landmarks and places of public interest, including popular tourist destinations to museums, parks, churches, theatres and schools. The process typically takes between 2 to 4 four years to complete.
Uber's regulatory classes are not just in London. The San Francisco-based ride-hailing company has run into regulatory barriers and a pushback in several markets, forcing it to withdraw from cities such as Copenhagen, Hungary and large parts of Germany.
In the U.S., Uber ceased operations in Austin, Texas after the city required Uber drivers to be fingerprinted in order to work in the city. After the fingerprint law passed, Uber decided not to comply with it and pulled out of Austin entirely. Uber has since returned to the Texas city.
In New York City, Uber as well as other ride-hailing firms, are being blamed for an increase in traffic in the city, as thousands of ride-sharing vehicles clog NYC streets causing gridlock, especially during peak times. In 2018, New York City officials imposed a limit on the number of Uber drivers that can operate in the city and paused the issuing of new license for Uber driver for at least one year.
Uber fought the cap and filed a lawsuit with the city of New York saying the city has exceeded its authority to regulate its drivers. However, New York State Supreme Court Judge Lyle Frank disagreed with Uber's argument and dismissed the lawsuit last month.
Despite Uber's dispute with London regulators, residents of London find its ride-hailing service convenient, as do many others around the world.
"I know this decision may be unpopular with Uber users, but their safety is the paramount concern," London mayor Sadiq Khan said on Monday.
Ahead of the latest decision, Uber said it would improve drivers' safety training and provide a direct connection to emergency services. Although it looks as though those moves are too late to appease London's regulators.
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