London wants to boot Uber, which will keep running as it fights move

LONDON — The message to Uber seems crystal clear: You're kicked out of one of your largest global markets.

But the reality is a bit more cloudy.

On Friday, London's taxi regulatory body, Transport for London, announced that it would not renew the ride-hailing company's permit to operate come September 30, stranding its 40,000 drivers and 3.5 million users.

Uber says it will appeal the decision and will continue operating during that process as per TfL rules.

The San Francisco-based ride-hailing company has been available in London for five years, despite the often vocal protests of the city's fabled cab drivers, who have to pass difficult exams to operate a black cab.

And the TfL's reason for denying the permit is based not on any particular incident, but rather a litany of complaints that include Uber's sullied corporate culture and some of its questionable business tactics, it said.

For example, TfL concluded that "Uber London Limited is not fit and proper to hold a private hire operator licence (sic)" because of its approach to reporting criminal offenses, obtaining medical certificates and checking driver backgrounds. It also cites Greyball — an Uber tactic that allowed Uber to deceive regulators — as a reason for declining to renew the permit.

But Uber officials note that its drivers have been through the same enhanced TfL background checks as those administered to cabbies, and that it never used Greyball on regulators in London. The practice was discontinued in March after a New York Times report outed the use of Greyball in Portland, Ore.

In suggesting there was a political motivation for the move, Uber's London general manager Tom Elvidge said in a statement that "by wanting to ban our app from the capital Transport for London and the Mayor (Sadiq Khan) have caved in to a small number of people who want to restrict consumer choice."

Uber operates in more than 600 cities around the world, including more than 40 towns and cities in the UK. "This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers," said Elvidge.

Regardless of how this matter is resolved, the ruling is nevertheless another setback for a company that has been rocked by corporate cultural issues, including allegations of sexism and aggressiveness that took down its CEO and co-founder Travis Kalanick. He was replaced earlier this month by former Expedia CEO Dara Khosrowshahi.

In Europe, the company has been forced to pull out of Bulgaria and Denmark and may soon exit Italy. It also faces restrictions in France, Spain and Hungary.

Uber's rapid growth from a 2009 San Francisco tech startup to global force — which led to a valuation of $70 billion — was largely due to its aggressive international expansion.

But even those efforts have taken hits of late. In China, a costly battle with rival Didi Chuxing resulted in Uber selling its business, while more recently it agreed to merge its Russian operations with local ride-hailing company Yandex.

Some analysts have suggested that Khosrowshahi's first business moves as CEO will include refocusing Uber on the U.S. market, where Lyft has been steadily making gains. A range of surveys indicate that Uber's once dominant 90% market share has slipped to around 75%.

Also on Khosrowshahi's to-do list is remaking Uber's corporate culture, which if left as is risks alienating existing employees and prospective hires.

© 2017 USATODAY.COM


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