"All companies in London must play by the rules and adhere to the high standards we expect," London Mayor Sadiq Khan said in a statement. "Providing an innovative service must not be at the expense of customer safety and security."

Uber Technologies Inc. was struck with a stunning rebuke in London, where regulators revoked its license to operate and chastised its corporate culture, adding to the expansive list of controversies facing the beleaguered ride-hailing company.

London is one of Uber’s largest and most lucrative markets, with 40,000 drivers and 3.5 million people who use the app once every 90 days. The broadside is a striking pushback against the free-wheeling business practices that contributed to the ouster of former chief executive officer Travis Kalanik. The company is also grappling with allegations of sexual harassment, labor-rights abuses, skirting regulation, bribery of government officials, and a lawsuit accusing it of stealing self-driving car technology.

A demonstrator holds a placard during a protest by London black cab drivers against a new private taxi service ‘Uber’, a mobile phone app, in central London on June 11, 2014. Taxi drivers brought parts of London, Paris and other European cities to a standstill on June 11 as they protested against Uber. Photo Credit: Carl Court/AFP/Getty Images

Transportation authorities in London concluded Uber isn’t “fit and proper to hold a private hire operator license.” The agency cited a failure to do proper background checks on drivers, report crimes, and a program called “Greyball” used to avoid regulators.

The company has 21 days to appeal, and can continue to operate during the appeal process. “We intend to immediately challenge this in the courts,” said Tom Elvidge, general manager of Uber in London.

Uber has faced resistance in markets from Paris to the Philippines, but London’s ruling is one of the most aggressive to date. The decision pits the popularity of the company among millions of customers, against regulators and taxi drivers who want tighter controls.

The outcome also has financial implications for Uber at a time when its backers are in talks involving a potential $12 billion stake from SoftBank Group Corp. and other investors. Uber has been valued at about $70 billion.

As Uber has upended the global transportation industry, it has also invited controversy. Authorities faulted Uber earlier this year for allowing a London driver who had sexually assaulted a rider to get back on the road.

Uber’s “approach and conduct demonstrate a lack of corporate responsibility,” the regulator, Transport for London, said in a statement.

The decision was cheered by the city’s traditional black cab industry, which has been hurt by the proliferation of Uber drivers and has aggressively pushed for tighter regulation of the San Francisco-based ride-hailing service. Taxi drivers, many of whom now use the rival apps Gett and MyTaxi, must go through extensive testing before receiving a license, while Uber drivers have fewer requirements.

“All companies in London must play by the rules and adhere to the high standards we expect,” London Mayor Sadiq Khan said in a statement. “Providing an innovative service must not be at the expense of customer safety and security.”

Read the full story: Bloomberg.com

Michael Bailey
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