LONDON — London's municipal transport authority took commuters by surprise Friday when it rejected Uber's application for a new license to operate in the sprawling megalopolis, ruling that the ride-hailing giant is not a "fit and proper" private car-hire operator.
The ubiquitous car service has experienced explosive growth in dense and sprawling London, where an estimated 40,000 Uber drivers prowl the streets waiting for hails from the 3.5 million residents who have downloaded the app.
Uber is especially popular because its rates are often far below London’s famous black cabs. A ride from Heathrow Airport to the city might cost more than $100 in a black cab but only $50 in an Uber vehicle.
Uber’s license expires at the end of September, but the company has 21 days to appeal and can continue to operate until there is another ruling.
Transport for London, the governing authority, said it rejected the application to renew the license because “Uber’s approach and conduct demonstrate a lack of corporate responsibility,” including not reporting serious criminal offenses and not obtaining medical certificates and background checks for the drivers.
Uber was defiant. Tom Elvidge, general manager of Uber in London, said the rejection shows the world that, “far from being open, London is closed to innovative companies.”
“To defend the livelihoods of all those drivers, and the consumer choice of millions of Londoners who use our app, we intend to immediately challenge this in the courts,” Elvidge vowed.
Uber has clashed with traditional taxi-driver markets around the world.
In some place, the ride-hailing app has been banned or suspended, or Uber has pulled out of the market. In Europe, Uber no longer operates in Denmark, Hungary or Bulgaria.
This is not the first time things haven’t gone Uber’s way in London. In October, a London employment tribunal ruled that Uber drivers were not self-employed and were entitled to minimum wage and holiday pay. Uber is appealing that decision.
The European Court of Justice is also weighing a case that could have widespread implications for whether Uber is regulated as a transport company or a digital services company.
London’s black-cab industry, which has taken a financial hit from its nemesis Uber, has long complained that the playing field is not level.
The London black-cab industry is highly regulated, with an estimated 22,000 vehicles in service. The boxy sedans, or “hackney carriages,” must all be wheelchair-accessible and able to turn on a dime. The vehicle cost is double that of a Toyota Prius, a car favored by Uber drivers in London.
London’s black-cab drivers also must pass the “Knowledge,” a grueling test of London topography that includes memorizing 25,000 streets and 20,000-plus landmarks. The coursework can take three years to complete.
As many a London cabbie has said: “I got Google Maps in my head.”
Demand to take the Knowledge exam has dipped considerably since Uber came to town. Its drivers rely on satellite navigation software such as Waze to guide them across London's twisting streets.
Steve McNamara, general secretary of the Licensed Taxi Drivers Association, a trade body for London’s black-cab industry, applauded the decision to give Uber the heave-ho.
In a statement, he said, “Since it first came onto our streets Uber has broken the law, exploited its drivers and refused to take responsibility for the safety of passengers.”
“This immoral company has no place on London’s streets,” he added.
In a few high-profile cases, Uber drivers in several countries have been charged with rape or assault and faced pushback from regulators. At the same time, Uber also continues to move into new cities.
Between February 2015 and February 2016, 154 allegations of sexual assault against taxi drivers were reported to London's Metropolitan Police Service. Of those, 32 cases involved Uber drivers; the rest were drivers of black cabs, mini-taxis and other private car hires. The figures were obtained following a freedom-of-information request by London's tabloid newspapers.
The capital was buzzing with the Uber news — moments after the ruling came down, the hashtags #Uber and #blackcab were trending on Twitter in Britain.
Uber supporters praise the service for its convenience and cost. Unionists say the company denies its workers — many of them immigrants — decent wages and benefits. Others say Uber needs to continue but be monitored more closely.
"This uber thing is worse than brexit," wrote @andatokhm.
London Mayor Sadiq Khan said he fully supported the decision to revoke.
“I want London to be at the forefront of innovation and new technology and to be a natural home for exciting new companies that help Londoners by providing a better and more affordable service,” the mayor said. “However, all companies in London must play by the rules and adhere to the high standards we expect — particularly when it comes to the safety of customers.”
Tom Tugendhat, a Tory member of Parliament, said Khan was a “Luddite” who wants to “switch off the Internet.”
“By banning Uber, Sadiq Khan is showing that socialism is about control when the Internet is pushing for freedom of choice,” he said.