Well. Here we go again. Two years and two months ago, Transport for London (TfL) told Uber – the minicab firm that has bafflingly managed to convince the world that it’s a tech company – that it was not a fit and proper company to provide private car services in London. Uber squawked, right-leaning commentators railed against Sadiq Khan for being anti-business, users fretted that they were about to be deprived of a service they found useful…
…and then, so far as the average Londoner was concerned, nothing happened. Despite its threats to take its ball away, Uber ultimately didn’t do anything of the sort. Instead, it appealed the decision, quietly improved its performance in those areas in which TfL said it had been lacking, and then kept its licence. Uber never disappeared from the streets of London. The company, in short, blinked.
And now history is repeating. The company was granted two extensions to its licence, the most recent of which expired yesterday. But once again, TfL has ruled that Uber is not a fit and proper company to operate minicabs, pointing to a “pattern of failures” which place passengers at risk, and has said it will not be renewing its licence.
The company can now appeal the decision, and keep operating cabs while it does so. What does all this mean? Some thoughts.
1. The problems now are not the problems then
In September 2017, TfL’s statement credited its decision to revoke Uber’s licence to three factors: how the company reported criminal offences by its drivers; how it conducted medical and other checks on them; and how it used a piece of software called Greyball to prevent officials from accessing its data.
None of those feature in the list of problems cited by TfL today. Instead, it points to a problem in which Uber’s system allowed unauthorised drivers to upload their photos to other drivers’ accounts. This had led to 14,000 trips conducted by unlicenced drivers, which meant they were uninsured. At least one of these drivers had previously had their licenced revoked by TfL. Other problems concerned vehicles without the correct insurance, or the ability of “dismisssed otr suspended drivers” to simply create a new account and keep Uber-ing. (The whiny tweet from CEO Dara Khosrowshahi about how unfair this all is doesn’t even acknowledge any of these very, very bad problems.)
So: even though Uber has acted to address earlier problems, new ones have reared their heads.
2. …but the song remains the same
But, as in 2017, those problems reflect two big themes: passenger safety, and an apparent lack of respect for TfL’s role as regulator.
And this is, to be blunt, exactly what happened before. TfL is using its regulatory muscle to tell Uber it either needs to raise its game or get out of town. Uber has said it will appeal.
Last time, the courts pretty much took TfL’s side, and put Uber on probation while it worked to correct the problems. Its possible things will play out differently this time – but whatever happens…
3. Londoners won’t notice any change
Check the Uber app on your phone right now. There are still cabs there, aren’t there? For all the noise, if you use the firm’s cabs, the odds are you’ll still be able to use them while the firm appeals the decision.
In fact, you’ll probably be able to keep using them for a long time beyond that, because…
4. Uber will not want to withdraw from London
The company has pulled out of other cities before, in protest at the fact regulators and municipal governments had the gall to imagine it was in some way answerable to them. Some of those markets – like Austin, Texas, in 2016 – were relatively small. Some of them – like Barcelona, last January – were much bigger.
But London, with apologies to readers in the rest of the country, is different. Documents filed with the US Securities & Exchange Commission last April showed that nearly a quarter of the firm’s business happened in just five cities: New York, Los Angeles, San Francisco, London, and São Paulo. That tallies with long-standing rumours that London is one of the few places where the firm is actually profitable, rather than just burning through investors’ money while it tries to build a dominant market share.
So: my instinct is that even if the courts again side with TfL, Uber will simply grumble and do what it’s told, rather than actually pull out.
5. The right is still wrong – or at least looking at this the wrong way
Another way in which history is repeating: right-leaning commentators are in a flap that this shows that Sadiq Khan hates private enterprise, London is closed for business, and a load of other annoying nonsense.
It’s rubbish, sorry: this is exactly how regulation should work. An operator isn’t safe enough, so the regulator has revoked its licence. If the operator improves, it can keep its licence. Great! If the operator doesn’t improve, we’re better off without it. Fantastic! Either way, the consumer wins. This decision isn’t about being against business: it’s about being anti-bad business.
6. “But minicabs are often unsafe!” is not a killer argument
Sure, minicab firms are often not great on the driver safety front either. My own personal horror story: the one that had been driving me to Heathrow for several minutes before I realised he was watching the cricket on his iPad rather than, for example, the M4.
But that is an argument for regulating minicabs more, not one for regulating Uber less. One of the advantages of Uber swallowing a big share of the private hire market is that it makes it easier to improve safety through regulation. We should embrace that, not whinge about it.
7. This decision is London’s gift to the planet
Not many cities are in a position to force Uber into anything: just ask Austin or Barcelona.
But London is. And an Uber that is less blasé about passenger safety and less high-handed with regulators will make things better in cities all over the planet.
This is not an emotion one often has a chance to feel, but – I’m oddly proud of my city’s transport regulator today.
Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.
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