London's Uber ban - turning the city's back on innovation and the 'gig economy'?

Profile picture for user slauchlan By Stuart Lauchlan September 21, 2017
Summary:
Uber is banned from the streets of London. What does this say about the UK capital's pre-Brexit attitude to innovation and the role of the 'gig economy' at a time when it's trying to attract tech inward investment?

uber and taxi
London’s transport authorities just landed a hefty blow to the ‘gig economy’, deciding that Uber will lose its license to operate in the UK capital at the end of this month.

The ruling means, acccording to Tom Elvidge, General Manager of Uber London, that the capital is turning its back on innovation:

This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.

Transport for London decided that the firm is:

not fit and proper to hold a private hire operator licence. TfL considers that Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safetly and security implications.

TfL cited Uber’s approach to reporting serious criminal offences; its approach to obtaining medical certificates and its approach to Enhanced Disclosure and Barring Service (DBS) background checks.

The regulator also took exception to Uber’s use of Greyball software which it argued could be used to block TfL from gaining full access to the app and prevent officials from carrying out their regulatory duties.

Uber now has 21 days to appeal the decision and Elvidge confirmed that this would happen:

3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision.  By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice.

If this decision stands, it will put more than 40,000 licensed drivers out of work and deprive Londoners of a convenient and affordable form of transport. To defend the livelihoods of all those drivers, and the consumer choice of millions of Londoners who use our app, we intend to immediately challenge this in the courts.

Until that period is up, Uber can continue to operate even though its current license runs out on 30 September. Uber also rejects the accusations from TfL that formed the basis of its decision:

Drivers who use Uber are licensed by Transport for London and have been through the same enhanced DBS background checks as black cab drivers. Our pioneering technology has gone further to enhance safety with every trip tracked and recorded by GPS. We have always followed TfL rules on reporting serious incidents and have a dedicated team who work closely with the Metropolitan Police.

Victory for some

With an appeal pending, TfL now takes a vow silence. Not so Sadiq Khan, Mahor of London, who chipped in his view that:

I want London to be at the forefront of innovation and new technology and to be a natural home for exciting new companies that help Londoners by providing a better and more affordable service.

However, all companies in London must play by the rules and adhere to the high standard we expect – particularly when it comes to the safety of customers. Providing an innovative service must not be at the expense of customer safety and security.

I fully support TfL’s decision - it would be wrong if TfL continued to licence Uber if there is any way that this could pose a threat to Londoners’ safety and security. Any operators or private hire services in London need to play by the rules.

Steve McNamara, General Secretary of the Licensed Taxi Drivers’ Association, which funded Khan’s election campaign, said:

The Mayor has made the right call not to relicense Uber.  Since it first came onto our streets Uber has broken the law, exploited its drivers and refused to take responsibility for the safety of passengers.  We expect Uber will again embark on a spurious legal challenge against the Mayor and TfL, and we will urge the court to uphold this decision. This immoral company has no place on London’s streets.

For trade union GMB, the TfL ruling is a major victory. Earlier this year, an employment tribunal ruled that the company should treat two drivers as workers and pay them the minimum wage and holiday pay.  Legal Director Maria Ludkin said:

This historic decision is a victory for GMB’s campaign to ensure drivers are given the rights they are entitled to – and that the public, drivers and passengers are kept safe. As a result of sustained pressure from drivers and the public, Uber has suffered yet another defeat – losing its license to operate in London.

It’s about time the company faced up to the huge consequences of GMB’s landmark employment tribunal victory – and changed its ways. No company can be behave like it’s above the law, and that includes Uber. No doubt other major cities will be looking at this decision and considering Uber’s future on their own streets.

The ruling has come as a major shock this morning (Friday 22 September), but the tensions around Uber’s London operation have been building to a head for a number of years. Just last month Uber was accused by police of not reporting the attack a driver who sexually assaulted a passenger, allowing him to repeat offend.

London joins Barcelona, Dusseldorf, Frankfurt and Hamburg as European cities where Uber is banned, as well as the whole of Denmark.

My take

There’s no doubt that Uber’s corporate behavior is open to question on a number of fronts and the allegations around not reporting criminal actions on the part of its drivers are of course deeply alarming. But is it necessary to ban the firm rather than to enforce better practices and processes on it? Have all avenues really be exhausted on that front?

In terms of day-to-day life in London, this ruling will inconvenience many people. Personally, I’ve never used an Uber in my life, but our very own Derek du Preez describes himself as “Devastated!” this lunchtime! He won’t be alone in that view. It’s just sunk in to some on Twitter that this also means the end of Uber Eats! Mayor Khan may find himself facing up to something of an electoral backlash over this ruling yet.

On a wider note, this ruling does send out a very negative message around the UK capital’s attitude towards disruptive innovation at a hugely delicate pre-Brexit time when attracting tech inward investment is a major priority. Or as David Leam, of business campaign group London First, put it:

This will be seen as a Luddite decision by millions of Londoners and international visitors who use Uber, and will also hit London's reputation as a global tech hub. London needs to be open to new ideas, businesses and services.

We’ll return to the wider implications around the ‘gig economy’ once the initial shock and awe from the ruling dies down a bit.