Transport for London (TfL) has announced that the operating licence for Uber London UK will not be renewed when the Uber licence expires at the end of September 2017.
Dual licensing system:
There is a dual licensing system in the UK for Taxis and Minicabs. Only taxis (hackney carriages) may stand and ply for hire. Other vehicles, known as private hire vehicles (PHVs) or “minicabs”, in addition to being themselves licensed have to be booked through a licensed PHV operator.
Uber Licence: Background
TfL licensed Uber as a London PHV operator in 2012, and Uber used that licence to launch itself in London. Customers hire Uber drivers and vehicles via Smartphones, using Uber’s App. Icons on a map displayed on a User’s Smartphone show the location of drivers and vehicles available for immediate hire.
Ever since launch in 2012 Uber’s activities in London have been the source of increasing controversy. Uber initially provided only executive vehicles, but the cheaper “UberX” service – typically providing a Toyota Prius with driver – came on stream soon after. Journey prices were generally cheap, to the extent that they were sometimes believed to be subsidised by Uber. However, at times of high demand, Uber has applied “surge pricing”, with customers often not realising the effect of the multiple until they receive an invoice at the end of their journey.
Complaints against Uber
The number of PHV drivers in London has nearly doubled from 64,000 to 118,000 In the 5 years that Uber has been licensed. The London taxi trade has complained that PHVs on the Uber platform were essentially plying for hire (an activity restricted to London’s black cabs). Severe congestion, thought to be caused by Uber drivers, has been known to occur around places of high public resort, where taxis plying for hire would be likely to congregate – such as railway stations and airports. An automated queuing system has given rise to issues with Uber drivers waiting in villages outlying Heathrow. There has also been concern about over-reliance on SatNav navigation in the crowded streets of London; there are numerous reports of traffic infringements and accidents being caused by poor Uber drivers. In addition, and of perhaps the greatest concern, the Metropolitan Police’s taxi and private hire team have criticized Uber for delays and failures in reporting serious allegations made against drivers.
TfL failed to take external legal advice before granting the first Uber licence in 2012. As the ramifications of Uber’s launch became apparent, complaints were made about the legality of the model. A TfL internal review in 2014 declared the model lawful. In 2015 the taxi trade launched a legal challenge to the legality of the Driver App, alleging that it was a “taximeter” constituted a “taximeter” (which PHVs are not allowed to be equipped with): the challenge failed.
New TfL conditions for all PHVs
TfL then consulted on conditions proposed to be attached to PHV operating licences, with some of those conditions potentially causing Uber serious difficulties, such as that booking confirmations had to be provided at least 5 minutes before the commencement of a journey, compulsory pre-booking facilities, landline telephones to be in place, and Smartphone apps not to show vehicles as available for immediate hire. Uber ran a concerted PR campaign against these measures, with 205,000 people signing a petition in opposition. As a result, TfL proceeded on a more watered-down version of the conditions. It has since emerged that 10 Downing Street intervened in TfL’s review. Uber are currently appealing a decision of Mitting J in March 2017 (upholding conditions requiring PHV drivers to satisfy an English test) to the Court of Appeal.
The New York Times broke the story of Uber’s “Greyball” programme on the same day as Mitting J.’s decision was handed down. “Greyball” is a method of identifying regulatory staff using the Customer App. The identity of regulatory staff helps Uber to avoid regulatory control. Uber were initially in denial, and robustly defended the “Greyball” programme; but after 6 days Uber announced that the programme would be withdrawn. Greyball was the first in a series of bad-news stories for Uber, with its CEO Travis Kalanick being caught on camera shouting at a driver, and disclosures of a culture of sexual harassment within the company. Mr Kalanick eventually resigned as CEO, and a long search for a replacement has recently finished with the hiring of Dara Khosrowshahi.
Uber licence renewal: LTDA objection
Uber’s licence came up for renewal in May 2017. The Licensed Taxi Drivers Association (“LTDA”), and many others, objected to the licence being renewed. In a surprise decision, made shortly before the general election, TfL renewed the licence for a 4 month period only, stating that it was carrying out further investigations.
Those investigations evidently did not satisfy TfL, who have now refused to renew Uber’s operating licence on the ground that it does not consider Uber to be fit and proper to hold a licence. TfL have announced that Uber’s conduct demonstrated “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications”. Those issues included:
- its approach to reporting serious criminal offences
- its approach as to how medical certificates were obtained
- its approach as to how Enhanced Disclosure and Barring Service checkers were obtained.
- its approach to explaining the use of Greyball, software that could be used to block regulatory bodies from gaining full access to its App and preventing officials from undertaking regulatory or law enforcement activities.
The refusal to renew Uber’s licence is expected to have huge ramifications both nationally and internationally. TfL’s initial decision to license Uber is one on which provincial local authorities will have placed a certain amount of reliance: TfL’s decision not to renew the Uber licence, especially for the reasons given, may now have the opposite effect.
The current Uber licence remains in force pending appeal. There is a statutory avenue of appeal to the magistrates and from there to the Crown Court. Uber will doubtless be considering whether to go down that route or to seek a judicial review in the High court.
(Post adapted from an original article by Charles Holland: cholland.com)
Gerald Gouriet QC and Charles Holland of FTB act for the LTDA in relation to its opposition to the renewal of ULL’s operating licence, instructed by John Luckhurst of Michael Demidecki & Co.