Why is London banning Uber?

Caleb Holden

On September 22nd, Greater London’s municipal transport authority, Transport for London (TfL), announced that it would not renew Uber’s five-year operating licence beyond its September 30th expiration date, highlighting the ride-sharing company’s “lack of corporate responsibility” as an important factor in their decision.

Should the decision stand, it will have a major impact on ride-sharing in London, given the 40,000 drivers and 3.5 million customers currently using Uber’s services in the UK’s largest city.

Uber’s response has been inconsistent thus far. The company immediately announced it would appeal the decision, allowing it to continue to operate during what could be a months-long legal battle. Two days later, newly appointed CEO Dara Khosrowshahi apologized on the company’s behalf, clarifying that the appeal comes “with the knowledge that we must change.”

TfL’s Decision

 TfL’s press release outlined four key areas that led to their conclusion that Uber “is not fit and proper to hold a private hire operator licence.” These items include:

“[Uber’s] approach to reporting serious criminal offences”:

For years, Uber has faced severe criticism over its handling of sexual assault accusations against its drivers or in its vehicles. Freedom of information data obtained by the Daily Mail listed 48 separate allegations of sexual assault reported to the London Metropolitan Police Service (MPS) between February 2016 and February 2017.

This issue has garnered significant press attention in the UK this year, particularly after another freedom of information request yielded a letter from the head of the MPS’s Taxi and Private Hire Unit to TfL expressing concerns that Uber was selectively reporting crimes in its vehicles, choosing only to disclose matters that would be “less damaging to [their] reputation.”

Several offences, including sexual assaults, assault, and public order offences, were not disclosed to police. In one particularly serious case, Uber withheld knowledge of a sexual assault committed by a driver on January 30th, 2016. The same driver then “committed a more serious sexual assault against a different passenger” on May 10th, 2016. MPS only learned of these incidents through London Taxi and Private Hiring Licensing after Uber reported the driver’s May 13th dismissal to the latter agency.

These reports pushed an All Party Parliamentary Group made up of London MPs to author a  letter on September 12th, 2017 urging TfL not to re-licence Uber.

“Approach to how Enhanced Disclosure and Barring Service (DBS)…[and] medical service checks are obtained”:

Concerns over driver screening and background checks have grown in tandem with Uber’s reluctance to address criminal issues like those described above.

Last October, news broke of Uber encouraging new drivers to seek online medical checks to expedite the licencing process. A small group of London doctors were also identified as faking Uber drivers’ medical certificates, fabricating blood pressure and eyesight test results in exchange for cash payments.

The background check issue has quickly become more complicated. Earlier this month, TfL informed Uber that background checks for 13,000 drivers would have to be resubmitted as the agency was no longer allowing approvals completed by third parties.

Supporters of Uber have fired back, claiming that since criminal and medical checks are both prerequisites for a final licencing approval by TfL, ultimate responsibility rests with the regulator. This is likely to be a significant point of contention during the appeals process.

“Approach to Explaining the Use of Greyball in London”:

Greyball refers to a software tool that Uber used between 2014 and 2017. Uber maintains the program was introduced to identify and deny service to individuals the company holds to be in violation of its term of service. In practice, the feature used social media, credit card information, and location data to evade regulators by flagging their accounts for drivers, hiding vehicles, or generating cars in the app that did not exist in real life.

TfL’s wording here is carefully chosen to avoid directly accusing Uber of evading regulators within London. Initial reporting on the Greyball issue cited specific examples in the United States and alluded to use in parts of Europe and Asia, but Uber has repeatedly denied its use in the UK. While Uber announced it would end the program back in March, it has yet to provide TfL with a sufficient explanation of how it may have affected their UK operations during the 2012-2017 licencing period.

Other Issues to Watch: UK Context

 Employment Rights: The elephant in the room whenever Uber makes headlines is the precarious employment relationship between the company and its drivers. Since its inception, Uber has maintained that its drivers are independent contractors using the app as an intermediary service, a point they claim justifies their unwillingness to provide minimum wages and benefits like sick pay and pensions.

Last October, a London Employment Tribunal rejected this argument, ordering the company to provide these essential rights to its employees. Uber has vowed to appeal the decision even as subsequent criticism from labour groups and MPs has mounted.

Demographic Issues: Infighting between London’s black cab drivers and private hire start-ups has been intense since ride-sharing platforms arrived in the UK. Demographic data released by the TfL suggests that racial differences may add an additional level of complexity to the debate.

According to TfL’s 2017 statistics, 71% of all licenced cab drivers in the London and the suburban area identified as “White” (British, Irish, or white other).  Amongst Private Hire Vehicle operators, this number drops to 18%.

This division has prompted reports that an outright ban on Uber could be in breach of equality legislation if it creates undue financial hardship for Uber drivers. Speaking on September 23rd, the former chairman of the Department and Work and Pensions Ethnic Minority Advisory Group expressed concern that the ban may violate TfL’s legal duty not to discriminate against minority groups.

14396565721_7c657b634c_bWhat’s Next

 Going forward, very little is clear about Uber’s future in London. Dara Khosrowshahi will travel to the UK to meet with TfL officials in London on October 3rd at Mayor Sadiq Khan’s request. Meanwhile, a petition started by the company calling on the Mayor to reverse the decision has now garnered over 830,000 signatures. Prime Minister Theresa May has also recently criticized the ban as a “disproportionate response” to Uber’s misdeeds.

Whatever else, TfL’s decision is a message to the controversial ride-sharing leader that ongoing malfeasance will have consequences as policymakers continue to construct a regulatory architecture for the gig economy. Whether the two sides reach a settlement or the matter is decided in court, the result promises to have lasting international impacts on contemporary municipal governance.

Caleb Holden is a second year MPP candidate and a Junior Fellow at Massey College, currently studying abroad in Paris. His research interests include Canadian energy policy, the place of cities and Indigenous governments in contemporary federalism, and the changing role of the media in Canadian society. Originally from Winnipeg, he’s on a quest to make the Prairies relevant to everyone he encounters during his stay in The Centre of the Universe.