Ride hailing service Uber’s license will expire in 21 days and London regulator refused to renew it. The transit authority claim that Uber breached many laws that put passengers safety at risk. But the San Francisco based company said they are committed to fight this and will appeal the decision.
According to the authority, more than 14,000 trips were made with more than 40 drivers who had fake identity on the Uber app. Uber cars will not disappear from London immediately after this decision, as the firm has promised to appeal in court. They can continue to operate after the expiry of license during the proceedings, but they will have to make official appeal during next 21 days. It is relevant to mention here that Uber’s license was canceled previously in September 2017 as well, but after the appeal process, judges gave the firm 15 months more to operate in the city.
The transport authority renewed Uber’s license for two months in September this year but, according to the city’s authority, still found that the firm showed a “pattern of failures”, London officials said. The company tried to address the security risks, but it failed. For example, drivers who were not allowed to drive an Uber were able to use other drivers identity while using their own photo in app. There were other blunders as well where suspended drivers were able to create new accounts with their real identity and pick up passengers.
Wall Street is not happy with this news as Uber’s stock price nosedived losing 6% of its value.
London is one of the most important cities for the firm. According to Uber, more than 3.5 million residents use the ride hailing service regularly and there are more than 45,000 drivers living in the capital whose livelihood could be impacted by the authority’s decision to not renew the license.
My statement on TfL's Uber decision. pic.twitter.com/uMDjoIlqOW— Mayor of London (@MayorofLondon) November 25, 2019
Sadiq Khan (Mayor of London), also backed the regular’s decision. He said in a statement; “I know this decision may be unpopular with Uber users but their safety is the paramount concern.” He also said; “Regulations are there to keep Londoners safe, and fully complying with TfL’s strict standards is essential if private hire operators want a license to operate in London.”
The firm is increasingly facing criticism from its drivers who demand more worker rights, and on other hand regulators are scrutinizing Uber around the world including multiple cities in US. Uber is being dragged into sea of conflicts around the world while company is still unprofitable, how long can this last?
Uber’s CEO Dara Khosrowshahi spoke out against TfL’s decision.
We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last 2 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.— dara khosrowshahi (@dkhos) November 25, 2019
‘Unite the Union’, a British and Irish trade union welcomed the news. They believe Uber has unfairly taken business from black cab drivers. According to Jim Kelly (chairman of Unite London) “Uber’s DNA is about driving down standards and creating a race to the bottom which is not in the best interests of professional drivers or customers.”
In 2017, the EU’s top court ruled that Uber should be classified as a transport service, therefore it be regulated like any other taxi operator. The case was filed by professional taxi drivers’ association in Barcelona. The association claimed that Uber’s activities in Spain promotes unfair competition with Uber’s use of unprofessional drivers.