Transport for London not renewing Uber’s operating license

Uber will lose its license to operate in London.
Image: Uber

Uber just lost its license to operate in one of its biggest European markets. Transport for London announced that it will not be renewing Uber’s credentials at the end of its existing probation. The organization granted Uber an extension back in September to amend issues related to rider safety but appears to be unsatisfied with the company’s efforts.

The decision opens up another interesting chapter in the relationship between London and the world’s largest ride-hailing service. In 2017, Transport for London decided that Uber’s platform was not “fit and proper” for city residents. Uber made a series of sweeping changes, earning a 15-month probationary period during which the company could continue to operate. 

Drivers and riders will not experience any disruption for the time being. However, it appears Uber will have to appeal to remain in London long-term. Today, nearly 4 million Londoners regularly get rides from 45,000 Uber drivers.

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Uber’s Troubles in London

Transport for London did not renew Uber’s license back in 2017 after an initial five-year term, citing many issues. Two major ones were the company’s failure to perform background checks on drivers and report crimes to the police. At the time, Uber agreed with the decision and requested the opportunity to make amends. A year and a half later, the Bay Area firm has failed to make necessary improvements, according to Transport for London.

“I know this decision may be unpopular with Uber users, but their safety is the paramount concern,” said London’s mayor, Sadiq Khan. “Regulations are there to keep Londoners safe, and fully complying with TfL’s strict standards is essential if private hire operators want a license to operate in London.”

Authorities recently identified nearly 15,000 rides that were provided by 43 drivers with fake IDs. This took place despite Uber reportedly tightening the bolts on its overall operations. Unfortunately, it seems that the company has run out of chances with Transport for London.

This time around, Uber disagrees with its U.K. counterparts. CEO Dara Khosrowshahi recently tweeted, “We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last two years, we have fundamentally changed how we operate in London.”

An appeal is likely to follow.

Struggles Continue for Uber

Outside of London, Uber continues to fight legal battles, incur massive losses, and clog up roads around the world. A New York court recently dismissed Uber’s lawsuit against a ruling that limits the number of licenses the company can distribute. In Australia, taxi and charter drivers filed a class-action lawsuit against the ride-hailing behemoth. The list goes on and on.

Uber recently reported third-quarter losses to the tune of $1.1 billion. Since its IPO in May, the company’s stock has lost 33 percent of its value. On top of that, analysts don’t expect Uber Eats to turn a profit until 2024.

Yet, many remain optimistic about the company’s future, citing investments and non-core operating expenses as the primary reasons why Uber isn’t profitable today. CEO Khosrowshahi still proclaims that Uber is well-positioned to continue penetrating a $12 billion addressable market and start generating profits with its core service. We’ll see how long investors are willing to wait for things to turn around.