Uber Wins Back License to Operate in London After Yearslong Battle -- 2nd Update
28 September 2020 - 2:26PM
Dow Jones News
By Alistair MacDonald and Sam Schechner
LONDON -- Uber Technologies Inc. won an appeal over the
revocation of its operating license in the U.K. capital, securing
for now the ride-hailing company's operations in one of its biggest
global markets.
The ruling is a step forward for Uber as the company tries to
build trust with regulators after years of tussles in London and
elsewhere. Under co-founder and former Chief Executive Travis
Kalanick, who resigned as CEO in 2017 and left the board late last
year, Uber regularly tested the regulatory and legal envelope of
countries where it operated in order to speed growth.
The company's stock jumped almost 6% on premarket trading.
The ruling stemmed from the refusal by London regulators last
November to renew Uber's license to operate, after finding
widespread instances of unauthorized drivers using the app to pick
up customers.
Uber said at the time it had fixed the problem, but London
officials said they wanted to make sure there weren't other
software issues. Uber appealed the decision and was allowed to keep
its drivers on London's streets during the process.
On Monday, a London court found that Uber was now "fit and
proper" to hold a license, despite some continued breaches,
according to the verdict.
In a statement, Uber said it had been granted an 18-month
license that makes it subject to a bevy of new conditions. "This
decision is a recognition of Uber's commitment to safety," the
company said.
The ruling heads off -- at least for the next year and a half --
a long-running threat by Transport for London, the city's main
transportation operator and regulator, to prohibit Uber from
operating in the U.K. capital. Shortly after entering the London
market, city regulators began accusing the company of safety and
regulatory shortfalls, allegations that Uber fought vigorously at
first before taking a more conciliatory approach. Since taking over
in the summer of 2017, Chief Executive Dara Khosrowshahi has
acknowledged shortfalls.
London is one of Uber's biggest and most important markets
globally. Like in other cities, the company met stiff resistance
from taxi and licensed-cab drivers, but opposition from groups
representing London's ubiquitous black cabs was particularly
fierce. Like other urban centers, many residents have embraced Uber
as a middle ground between the city's extensive and relatively
cheap public transportation and pricier black cabs. The company has
said it has 3.5 million riders and 45,000 licensed drivers in
London.
The court listed a number of recent breaches of Uber's license
by drivers, including vehicles that didn't have certification that
they were roadworthy, but said the company had reduced the
occurrence of such offenses, according to a copy of the verdict.
The court also said Uber had increased board oversight of the
issues and improved communication with TfL, adding that there was
no evidence that the company had tried to conceal any of the
breaches.
Uber "does not have a perfect record but it has been an
improving picture," the court said.
In November last year, TfL revoked Uber's license, saying it had
found 14,000 instances in late 2018 and early 2019 in which
unauthorized drivers swapped their own photos with those of
authorized drivers on Uber's platform, allowing them to pick up
riders themselves. A TfL spokesman said at the time that in some
cases it believed drivers were using the loophole to allow people
they knew to use their own accounts to pick up riders.
It wasn't Uber's first skirmish with TfL. In 2017, the authority
rejected Uber's application for a long-term license because of
issues regarding safety and its corporate culture and governance.
It pointed to Uber's internal use of an app called Greyball, which
allowed it to evade surveillance by local authorities, as well as
problems with the company's reporting of crime to the police.
Uber appealed that decision and won a 15-month license, which
expired in September 2019. The regulator then gave Uber a two-month
license, which expired last November.
Write to Alistair MacDonald at alistair.macdonald@wsj.com and
Sam Schechner at sam.schechner@wsj.com
(END) Dow Jones Newswires
September 28, 2020 08:11 ET (12:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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