2017-09-22 07:32:03
Uber Loses Its License to Operate in London

LONDON — London’s transportation agency dealt a huge blow to Uber on Friday, announcing that it would not renew the ride-hailing service’s license to operate in the British capital, the company’s largest market in Europe.

“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” the agency, Transport for London, said in a statement.

The license will expire on Sept. 30, but Uber has been given 21 days to appeal, during it may continue operating in London. The company immediately vowed to appeal.

The decision is the latest problem to confront a company that has upended public transportation across much of the world by using smartphones to connect drivers with waiting passengers. That success has helped it grow into a behemoth worth around $70 billion, operating in major cities across the globe.

But along the way, it has faced an array of controversies, from allegations of sexual discrimination to its use of software to evade the gaze of authorities. Those and other issues contributed to the removal of its founder, Travis Kalanick, as chief executive this year, leading to a search that culminated in the appointment in August of Dara Khosrowshahi, the former head of the online travel site Expedia, as its new leader.

Uber had hoped that new leadership would help it turn the corner on a turbulent period.

The decision by Transport for London, which is responsible for the city’s subways and buses, as well as regulating its taxicabs, illustrates the gravity and severity of the issues confronting Uber. And a ban on operating in one of its largest markets — a global city where it has 40,000 drivers and claims 3.5 million customers — would hit the company’s bottom line.

Transport for London said it had concluded that Uber was “not fit and proper to hold a private hire operator license.”

Among the issues it raised: how Uber deals with serious criminal offenses; how it conducts background checks on drivers; and its explanation for its use of a software program called Greyball that “could be used to block regulatory bodies from gaining full access to the app.”

Tom Elvidge, Uber’s general manager in London, said that the agency and London’s mayor, Sadiq Khan, had “caved in to a small number of people who want to restrict consumer choice.”

Uber conducted background checks using the same methods as those used for black-cab drivers, he said.

“Our pioneering technology has gone further to enhance safety with every trip tracked and recorded by GPS,” he said, adding that the company “have a dedicated team who work closely with the Metropolitan Police.”

He added that Greyball “has never been used or considered in the U.K. for the purposes cited by TfL,” or Transport for London.

Uber is used in more than 600 cities around the world, and in more than 40 cities and towns in Britain. “This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers,” Mr. Elvidge said.

John Colley, a professor at Warwick Business School, said the decision was the latest sign of an erosion in Uber’s corporate image.

“There is a very long list of businesses who have suffered for failing to uphold the level of values necessary,” he said. “Until Uber gets this message, then it will suffer lost trade as a result of its deteriorating reputation.”