Uber loses London licence
Uber has been refused a new licence to operate in London after Transport for London identified what it described as a “pattern of failures” that put passenger safety at risk. The decision affects one of the capital's largest private hire operators and tens of thousands of drivers, although Uber will be allowed to continue operating while it appeals.
One of the biggest names in London's private hire industry is facing another battle to remain on the capital's streets.
Transport for London has decided not to renew Uber London's private hire operator licence, citing concerns over passenger safety and weaknesses in the company's systems.
The decision follows months of scrutiny and comes just two years after TfL previously refused to renew Uber's licence.
But passengers opening the Uber app today will not suddenly find the service unavailable.
Uber has confirmed that it intends to appeal.
Under the licensing process, the company can continue operating while that appeal is considered.
At the centre of TfL's decision are concerns about who was actually driving passengers booked through the Uber platform.
TfL said a change to Uber's systems allowed unauthorised drivers to upload their photographs to accounts belonging to other drivers.
That created a serious problem.
A passenger requesting a vehicle through the app might believe that the person arriving was the properly licensed and approved driver shown on the account.
But another individual could potentially be behind the wheel.
According to TfL, this vulnerability resulted in at least 14,000 trips involving drivers who were not the drivers associated with those accounts during late 2018 and early 2019.
Knowing who is actually carrying a passenger is one of the foundations of private hire licensing.
London private hire drivers have to be licensed by Transport for London.
The licensing system exists partly so that checks can be carried out before someone is permitted to transport members of the public professionally.
A private hire operator also needs to maintain appropriate booking records.
If a system allows one person to operate using another driver's account, those safeguards can potentially be undermined.
This is why TfL viewed the issue as considerably more serious than a simple technical problem with an app.
TfL also identified another weakness.
It said drivers who had previously been dismissed or suspended from the Uber platform had been able to create new accounts and carry passengers.
Again, the issue goes directly to passenger safety.
Removing someone from a platform has limited value if that person can simply establish another account and begin working again.
TfL concluded that these problems demonstrated weaknesses in Uber's systems that it could not overlook when considering whether the company remained fit and proper to hold a London private hire operator licence.
Uber strongly disputes the decision.
The company says it has made significant changes to its systems and argues that TfL's decision not to renew the licence is unjustified.
Uber intends to appeal, meaning the dispute will now continue through the legal process.
That is important for passengers and drivers.
Uber has not been immediately banned from London's streets.
The company has 21 days to lodge its appeal and can continue operating during the process.
The scale of Uber's London operation makes the dispute particularly significant.
At the time of TfL's decision, Uber had around 45,000 drivers operating in London.
For many, driving through the platform represents an important source of income.
The eventual outcome therefore matters to considerably more people than Uber's management and shareholders.
Thousands of drivers will be watching the appeal closely.
So will passengers who have become accustomed to booking journeys through their smartphones.
Uber and Transport for London have been here before.
In September 2017, TfL refused to renew Uber's private hire operator licence.
That decision triggered a major dispute over the company's future in London.
Uber appealed.
In June 2018, Westminster Magistrates' Court subsequently granted the company a 15-month probationary licence, subject to conditions.
When that period expired in September 2019, TfL granted Uber a further two-month licence while it continued examining the company and its systems.
That short extension expired on 24 November 2019.
TfL has now decided that the issues it identified are serious enough that another licence should not be granted.
Private hire operators in London must satisfy TfL that they are fit and proper to hold an operator licence.
This isn't simply about whether an app works or whether customers like the service.
An operator is responsible for a regulated transport service carrying members of the public.
That means TfL considers issues such as passenger safety, regulatory compliance and the systems used to manage bookings and drivers.
Technology may have changed how passengers order a vehicle.
The underlying licensing responsibilities have not disappeared.
Whatever happens next, Uber has already had a profound effect on transportation in London.
Before app-based services became widespread, booking a minicab generally involved telephoning a local private hire office or making an advance arrangement.
Smartphones changed that.
A passenger could open an app.
Enter a destination.
See vehicles nearby.
Receive information about the assigned driver.
Follow the vehicle's approach on a map.
And pay electronically.
Those features rapidly changed passenger expectations.
Today, customers increasingly expect real-time information from transport providers.
The current dispute demonstrates the other side of that transformation.
Technology can make booking extremely efficient.
But it also creates new regulatory challenges.
If thousands of journeys are being allocated automatically through software, the systems controlling driver identity and eligibility need to be reliable.
A traditional private hire operator may manually allocate a booking to a known driver.
A large digital platform may process enormous numbers of journeys through automated systems.
The scale is different.
But the legal principle remains the same: the operator needs to know who is carrying the passenger.
The Uber story also creates an opportunity to clarify a frequently misunderstood part of London's transport industry.
A London taxi and a private hire vehicle are not the same thing.
London's traditional black cabs are taxis.
They can be hailed in the street and can collect passengers from authorised taxi ranks.
Their drivers undertake London's famous Knowledge examination and taxi fares are regulated through the relevant TfL tariff.
Private hire vehicles operate differently.
A private hire journey must be booked through a licensed private hire operator.
The driver cannot simply cruise the streets independently looking for passengers to pick up.
Uber operates within London's private hire system.
The smartphone may make the booking appear almost instantaneous, but legally there is still an operator between the passenger and driver.
This is particularly important when something goes wrong.
The private hire operator isn't merely an advertising service introducing two strangers.
It performs a regulated role within the booking process.
The operator accepts the booking and maintains the required records associated with it.
That makes operator licensing a fundamental part of London's private hire system.
A passenger needs confidence that the vehicle and driver assigned to their booking meet the applicable licensing requirements.
TfL's concerns about Uber therefore go to the heart of how a private hire operation is supposed to function.
For the moment, passengers can continue using Uber in London.
There is no immediate shutdown.
The company's appeal means operations can continue while the case progresses.
Passengers therefore do not need to assume that journeys already planned for the coming days have automatically been cancelled simply because today's licensing decision has been announced.
The longer-term situation is less certain.
Much will depend on Uber's appeal and whether regulators and the company can resolve the outstanding issues.
If Uber were ultimately unable to continue operating, it would undoubtedly be a significant change.
But it would not leave London without private hire services.
The capital had a large private hire industry long before Uber arrived.
Other app-based operators are also competing for passengers.
Traditional minicab operators continue to serve local and specialist markets.
London's black cab trade provides another separate option.
And specialist companies provide services ranging from executive travel to airport transfers.
Uber changed the market enormously.
It did not create London's entire private hire industry.
One lasting effect of app-based private hire has been increased pressure on operators to modernise.
Passengers increasingly expect clear pricing, electronic booking, card payment, driver information, booking confirmations and updates about their journey.
Those expectations extend beyond app-only businesses.
A passenger booking an airport transfer, for example, may now expect confirmation before travelling and clear information about how the driver will meet them.
Competition therefore influences the wider industry even when companies operate very different business models.
Airport transportation is one area where advance booking remains particularly valuable.
A passenger landing at Heathrow or Gatwick is dealing with uncertainties that don't exist during an ordinary journey across London.
Flights can be delayed.
Immigration queues vary.
Baggage may take time to arrive.
The passenger may have several large suitcases.
Families may require larger vehicles.
Groups may need multiple vehicles.
And passengers arriving from overseas may have no local knowledge of the airport.
For those journeys, arranging transport before travelling can remove considerable uncertainty.
Suppose a passenger's flight is scheduled to land at Heathrow at 15:00.
That does not mean they will meet their driver at 15:05.
The aircraft has to taxi to its stand.
Passengers disembark.
Those arriving from international destinations may pass through immigration.
Checked luggage has to reach the baggage carousel.
The passenger then passes through customs and enters the arrivals hall.
A professional airport-transfer booking therefore has to account for more than the published flight time.
The Uber licensing dispute also highlights something particularly relevant at airports: passengers need to know who their driver is.
Major airports are busy environments.
Hundreds of people may be leaving arrivals simultaneously.
Numerous taxi and private hire drivers may be waiting nearby.
Clear booking information and driver identification reduce confusion.
Passengers should know how their collection will work before getting into a vehicle.
This is especially important for international visitors unfamiliar with London.
Passengers should also understand an important safety distinction.
A licensed private hire vehicle should be pre-booked through a licensed operator.
A driver independently approaching passengers and offering an immediate private hire journey without a booking is not operating in the same way as a legitimate pre-booked service.
At airports, passengers should either use the official taxi rank, use appropriately arranged airport transport, or meet the private hire driver associated with their confirmed booking.
They should not simply accept unsolicited offers from unknown drivers.
Private hire vehicles play an enormous role in London's airport transport network.
Heathrow, Gatwick, Stansted, Luton and London City collectively handle tens of millions of passengers.
Not all of those passengers live beside a railway station.
Not all travel during normal public transport hours.
Not all can easily carry their luggage on trains and buses.
And many international visitors simply prefer a direct journey from the terminal to their hotel or address.
Private hire therefore fills an important gap between mass public transport and traditional taxis.
The debate around Uber is sometimes presented as a simple contest between new technology and traditional taxis.
London's transport market is considerably more complicated than that.
Different passengers need different services.
A commuter might use the Underground.
A tourist may hail a black cab.
Someone going home after dinner might use an app.
A family with four suitcases may pre-book an airport vehicle.
A business traveller may arrange an executive car.
These services overlap, but they are not identical.
The important issue is that whichever service passengers choose operates safely and within the applicable licensing rules.
Perhaps the biggest lesson from today's decision is that innovation does not remove regulatory responsibility.
A company can use sophisticated software.
It can process bookings instantly.
It can track vehicles using GPS.
It can handle payments electronically.
But if it operates private hire services in London, it still needs to satisfy the regulator.
TfL's decision demonstrates that the technology behind a service may change dramatically while the fundamental expectations remain familiar: licensed drivers, licensed vehicles, proper booking records, passenger protection, and an operator capable of demonstrating that its systems are safe.
Uber now intends to challenge TfL's decision.
That means the company's future in London will not be decided today.
The appeal process could take time.
During that period, Uber can continue operating.
TfL will defend its decision.
Uber will argue that improvements it has made demonstrate that it should continue to hold a London operator licence.
Ultimately, the dispute will test whether those improvements are sufficient to address the regulator's concerns.
For passengers, little changes immediately.
For Uber's approximately 45,000 London drivers, however, the stakes are considerable.
Their ability to continue working through the platform depends on what happens next.
London's private hire industry has changed enormously during the past decade.
Smartphones have transformed booking.
GPS has transformed dispatch.
Electronic payments have transformed fares.
Apps have created enormous international transport platforms.
But today's decision demonstrates that one element remains as important as ever: trust.
Passengers need to trust that the vehicle arriving for them is legitimate.
They need to trust that the person behind the wheel is the driver who is supposed to be there.
And regulators need to trust that operators have systems capable of enforcing those requirements.
Uber has 21 days to begin challenging TfL's decision.
The app will continue operating while that process takes place.
The much bigger question is whether one of London's largest private hire operators can convince the authorities that the problems identified today will not happen again.
London's private hire market includes everything from immediate app-based journeys to airport transfers booked days or weeks in advance.
For airport passengers, advance booking can provide particular advantages because the operator knows the journey requirements before the passenger lands.
London Airport Transfer provides pre-booked private hire journeys to and from Heathrow, Gatwick, Stansted, Luton and London City Airport, as well as airport-to-airport transfers and journeys between London's airports, hotels and residential addresses.
Private hire vehicles differ from London black cabs in one particularly important respect: the journey must be booked through a licensed private hire operator.
Passengers arriving at an airport should therefore know which operator they booked with and how they are expected to meet their driver.
This is particularly important at busy arrivals terminals where numerous drivers and passengers may be trying to find one another.
Whatever technology is used to make the booking — website, telephone or smartphone — the fundamentals remain the same.
The correct passenger needs to meet the correct licensed driver in the correct vehicle.
Today's decision concerning Uber demonstrates just how seriously Transport for London treats that responsibility.
Written by London Airport Transfer for passengers travelling to and from London airports.