Uber ban by Transport for London may not be the last
Transport for London (TfL), which licenses all taxi and ride operators, has informed Uber London Limited that it will not be issued with a new private-hire operator's licence after the current licence expires on September 30.
In a statement, TfL says private hire operators must meet rigorous regulations and demonstrate to TfL that they do so in order to operate. TfL must also be satisfied that an operator is fit and proper to hold a licence.
Included in the list of infringements, TfL says Uber has not acted in the best interests of its clients in a number of cases. These include:
Its approach to reporting serious criminal offences.
Its approach to how medical certificates are obtained.
Its approach to how enhanced Disclosure and Barring Service (DBS) checks are obtained.
Its approach to explaining the use of Greyball in London – software that could be used to block regulatory bodies from gaining full access to the app and prevent officials from undertaking regulatory or law enforcement duties.
London has been reassessing Uber's licence since May. The American ride service was then given a four-month extension while TfL analysed the company and its operating procedures. Uber has been operating in London since 2012 and has around 40,000 drivers in the city.
Uber used its Greyball software for years to actively and purposefully deceive law enforcement officials in cities where its service violated regulations. When officials would try to call an Uber to test the service, they were greyballed or told there were no cars nearby.
Uber said it had stopped using the technology but it caused a headache for the company. Greyball used Uber's ability to track geolocation, credit card information, social media accounts and a host of other data in order to identify officials and bypass regulation.
The app was used in Boston, Oregon, Philadelphia, Portland and Las Vegas, and in countries around the world including China, South Korea, Italy, Australia and France. Initially, Uber claimed the software was used to protect its drivers and riders but then removed the app after pressure by authorities.
The company, which is valued at around $70bn, has lost its CEO Travis Kalanick and at least 20 other employees have been fired for a range of scandals.
In January, more than 200,000 customers mainly in the US deleted the app from their phones after Kalanick said he'd continue sitting on a board of businessmen and women set up by Donald Trump. The #DeleteUber movement eventually led to Kalanick's decision to resign from that board.
His brash style was supposed to symbolise a young energetic company but he was also filmed verbally abusing one of this own drivers in a video that went viral.
Uber has continued to grow globally, but its losses are mounting. It wrote off $2.6bn and lost its Chinese business, while it has failed to break even more than a decade after it began.
Its net revenue, excluding China, grew to $6.8bn for 2016.
Uber's growth continues to outpace its losses, despite those losses seeming fairly huge on the surface. The company lost $2.8bn in 2016, minus its misadventures in China – which is more than any start-up in history. This has led some industry analysts to predict that Uber will never break even and will eventually fizzle out. But the company also doubled its gross bookings to $20bn in 2016, and its net revenue (excluding China) was up to $6.8bn. In short, the company continues to grow despite all its failings.
Uber is not a publicly traded company so the full extent of its debt is unreported. However, it's likely to be between $4bn-$4.5bn and has yet to announce a listing plan.
It has not paid investors a dividend and continues to trade on the premise that the big payoff will happen at some point in the future.
Uber has not commented on the latest ban.
Since this article was written (September 22), Uber CEO Dara Khosrowshahi wrote in an open letter on Monday, September 25, that "while Uber has revolutionised the way people move in cities around the world, it's equally true we’ve got things wrong along the way. On behalf of everyone at Uber globally, I’d like to apologise for the mistakes we’ve made." But he insisted: "We will appeal [against] this decision [not to renew the private-hire operator's licence] on behalf of millions of Londoners, but we do so with the knowledge that we must also change."