A London court on Tuesday gave ride-hailing firm Uber a shorter than usual licence to keep operating in the British capital, accepting the firm’s claim that it has changed its aggressive tactics and is now a more responsible corporate citizen.
But chief magistrate Emma Arbuthnot granted an operating licence lasting just 15 months, short of the five-year permit Uber had been seeking. That means the company will remain under scrutiny and serve a probation period of sorts in meeting the terms of regulators at Transport for London.
“The rapid and very recent changes undergone by [Uber] lead me to conclude that a shorter period will enable TFL to test out the new arrangements,” the judge wrote in her ruling.
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London transport officials had revoked Uber’s licence in September. They had objected, among other things, to the company’s failure to report serious criminal offences and its use of technology to allegedly evade law-enforcement officials.
In this week's appeal, the company admitted it had been wrong, and apologised.
That was an important factor to Ms Arbuthnot, who said Uber would be monitored by London transport authorities and ordered Uber to pay £425,000 (Dh2.1m) in court costs.
London's mayor, Sadiq Khan, said that TFL’s actions had been vindicated, proving the regulator was correct in rejecting the licence last year.
“Uber has been forced to overhaul the way it operates not just in London but across the world, including completely changing its global governance structures and implementing new systems for reporting alleged crimes,” he said. “As mayor, I’m working to ensure that London continues to be at the forefront of innovation and a natural home for new and exciting companies. But no matter how powerful and how big you are, you must play by the rules.”
San Francisco-based Uber has expanded rapidly around the world by offering an alternative to traditional taxis through a smartphone app that links people in need of rides with drivers of private cars. That has drawn protests from taxi drivers who say Uber drivers don’t have to comply with the same licensing standards as London’s traditional black cab drivers, giving the ride-hailing service an unfair advantage and placing the public at risk.
The company insists it is changing under new chief executive Dara Khosrowshahi, who tried to shift the company from its combative stance with municipal officials soon after London pulled its licence.
Just hours after London’s rebuke in September, Mr Khosrowshahi took to Twitter. “Dear London: We r far from perfect,” he wrote. “Pls work w/us to make things right.” An online petition which quickly gathered thousands of signatures also served to remind London’s officials of the company’s immense popularity.
Mr Khosrowshahi has also apologised for past mistakes. Uber, with some 45,000 drivers and 3.6 million customers in London, challenged the decision with the understanding that things have gone wrong and must change. The company insists it has made a clean break with the past.
“We will continue to work with [Transport for London] to address their concerns and earn their trust, while providing the best possible service for our customers,” said Tom Elvidge, general manager of Uber in the UK.
But Gerald Gouriet, representing the Licensed Taxi Drivers Association, warned an “Uber in sheep’s clothing” had appeared before the court.
The ruling came as no surprise to experts monitoring the company, such as John Colley of Warwick Business School. He said Mr Khosrowshahi had been at pains to put the years under former chief executive Travis Kalanick behind the company and focus on Europe and North America.
He said that Uber has already withdrawn from Russia, China and South East Asia, and are believed to be negotiating an exit from India to curtail the loss of cash in markets where they feel they can’t win.
“Ultimately, Khosrowshahi needs London,” said Mr Colley. “If he loses it, then many other UK cities may feel confident enough to kick out the disrupter.”