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The subsidiary responsible for the ride-hailing app Uber has been told it isn’t considered “fit and proper” so won’t have its license renewed on 30 September.
While Uber London Limited can appeal the decision, if the ban goes ahead it will be one of the biggest blows to date for the global technology company, which in spite of its immense success has stood accused in recent years of poor work culture and ethics.
Transport for London released the public statement on Friday 22 September stating it has informed the London based company branch, “it will not be issued with a private hire operator licence after expiry of its current licence”.
That means in a little over a week, Uber won’t be permitted to operate within Greater London.
Uber first made waves in the commuting world after launching in San Francisco in 2011. Since then it has gone international, operating in more than 630 cities worldwide.
In principle, the company is little more than a digital application that connects independent drivers with clients while taking care of the transaction, slicing a profit for itself.
While it seems simple, the service blurs the lines between traditional roles of independent contractor, employee, and job agency.
Uber is far from alone in this shake-up, but it does stand out for its success in what is now referred to as a ‘gig’ economy – individuals using technology to facilitate paid tasks.
Last year the UK courts ruled that Uber drivers should be considered employees, forming a landmark decision that could have implications for other gig economy services.
As employees in various parts of the world, Uber would need to view drivers less as clients who use their app and more as workers with rights to various benefits.
In less of a philosophical debate, Uber has also stood accused of tolerating a sexist workplace culture, leading to an internal probe that resulted in multiple terminations.
London isn’t the first to ban Uber, which has challenged legislation and competition that has traditionally been the realm of taxis in many parts of the world.
But it is a major city, and the loss will not only affect the 40,000 drivers who use the service, not to mention those who have come to rely on them, it will almost certainly have wider reaching implications in other cities and for similar app-based services.
In this case, Transport for London has explicitly blamed Uber’s corporate conduct, detailing “a number of issues which have potential public safety and security implications.”
London is famous not only for its iconic black cabs, but its licensed ‘mini-cab‘ operators who drive private vehicles for hire.
Uber was given a five year license to operate under London’s Private Hire Vehicle’s Act, which will now expire without being reissued.
Of course, Uber isn’t going to slink off quietly.
“Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice,” Uber London General Manager Tom Elvidge has said in a statement.
“We intend to immediately challenge this in the courts.”
The company’s CEO, Dara Khosrowshahi had this to say on Twitter;
Dear London: we r far from perfect but we have 40k licensed drivers and 3.5mm Londoners depending on us. Pls work w/us to make things right
— dara khosrowshahi (@dkhos) September 22, 2017
Whatever the outcome, technology that facilitates gig-economics will continue to be a boon and a bust for communities, providing new opportunities for some while forcing legislators to consider how to protect those who could suffer its impact.
Even were the giant Uber should fall as a company, technology that exploits new economics are here to stay.