London to not renew Uber’s operating license

LONDON — Uber Technologies may have hit a London wall. The British capital has decided not to renew the ride-hailing app’s licence, citing an irresponsible approach to safety and security. Boardroom upheaval back in the United States makes it harder for Uber to address the concerns with much credibility. And a dented reputation could undermine Londoners’ enthusiasm to help Uber challenge the ruling.

Transport for London, the body tasked with managing the UK capital’s fleet of buses, trains and taxis, said on Friday that Uber’s five-year licence will not be reissued at the end of September. Concerns raised by UK police about the reporting of serious crime influenced the outcome, as did the tech group’s presumably inadequate explanations of the use of its controversial Greyball software, which can be used to evade regulatory scrutiny.

Those are legitimate worries, although it’s no secret that taxi and labour groups have also been lobbying hard against the U.S. interloper. As such, TfL’s decision is a serious blow in Uber’s biggest European market – one usually known for relatively light-touch regulation. It might even loom large enough to alarm SoftBank, which is mulling a $10 billion investment in the company according to the Wall Street Journal.

Uber looks unprepared for the fight. New Chief Executive Dara Khosrowshahi, who replaced ousted co-founder Travis Kalanick last month, is trying to impose discipline at the company, and the board is in need of new members, too. Those at the top are preoccupied with filling holes in the executive ranks, improving governance and managing the fallout from a string of controversies.

When then-Mayor Boris Johnson tried to crack down on Uber in London two years ago with proposals that would have seen passengers having to wait at least five minutes for a ride, the company was able to mobilise customers to sign a petition and see off Johnson’s threat. A similar appeal to riders and drivers is part of Uber’s response to TfL’s ruling. Along with promises that Uber will clean up its act, it could again be an effective tactic. But an image tarnished both in London and elsewhere may mean Uber can’t rely on its user base to back it wholeheartedly this time.

Context news

– Transport for London on Sept. 22 said that it had told the local unit of Uber Technologies that it will not be given a new private-hire operator licence for the UK capital after its current one runs out on Sept. 30.

– TfL cited concerns over Uber’s reporting of serious criminal offences, among other procedural matters, and over its explanations about so-called Greyball software, which can be used to block regulators’ access to the app.

– Uber is entitled to appeal the licensing decision within 21 days, and to continue to operate until the appeals process has been exhausted.

– Tom Elvidge, Uber’s general manager in London, said TfL had “caved into a small number of people” and that the company would “immediately” challenge the decision in the courts.

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