Uber has lost its operating licence in London after a shock ruling by the capital’s transport body.
The ride-hailing app will no longer be able to offer services in their current form within the M25, despite the firm claiming 3.5 million Londoners regularly use it.
Transport for London (TfL) announced its decision on Friday with a strong statement, saying: “TfL has concluded that Uber London Limited is not fit and proper to hold a private hire operator licence.”
As many as 40,000 Uber drivers will potentially be forced off the city’s streets.
Uber is the subject of fierce opposition from the GMB trade union and the Licensed Taxi Drivers’ Association.
The firm has been beset by allegations of exploitation and poor worker protections, amid other claims of sexual assault by its drivers.
Friday’s decision will stun the global taxi tech firm which is still reeling from a series of PR blunders, allegations of sexism, and the departure of its embattled chief executive.
Uber is allowed to continue to operate during an appeals process, which the firm has confirmed it will now undertake.
The ruling states that Uber’s licence will otherwise expire on 30 September.
Private operating licences are awarded for a period of five years by TfL, after which operators must re-apply.
The US-based firm was granted a four-month extension in May 2017 while TfL assessed its re-application.
The ruling does not affect UberEats, the firm’s food delivery service.
‘Immediate challenge’
Uber said it would now challenge the decision, saying those who use the app would be “astounded” by the ruling.
Tom Elvidge, General Manager of Uber in London, said: “3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision.
“By wanting to ban our app from the capital Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice.
“If this decision stands, it will put more than 40,000 licensed drivers out of work and deprive Londoners of a convenient and affordable form of transport.
“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.
“This ban would show the world that, far from being open, London is closed to innovative companies who bring choice to consumers.”
The firm has also sent an email to its London customers asking them to lobby officials over the decision.
‘Operators need to play by the rules’
London Mayor Sadiq Khan said “operators in London need to play by the rules”.
Khan said: “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.
“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. Providing an innovative service must not be at the expense of customer saftey and security.
“I fully support TfL’s decision - it would be wrong if TfL continued to license Uber if there is any way that this could pose a threat to Londoners’ safety and security.
“Any operator of private hire services in London needs to play by the rules.”
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City Hall sources told HuffPost UK that Uber will continue to operate and won’t be shut down overnight as there is likely to be a ‘lengthy’ appeals process in the courts.
During the appeal, Uber can submit a new application that tries to meet all the demands on safety.
Meanwhile an Uber drivers’ union described the decision as a “devastating blow” for those who face losing their jobs.
‘Devastating blow’
James Farrar, chair of the Independent Workers’ Union of Great Britain’s United Private Hire Drivers branch said: “This is a devastating blow for 30,000 Londoners who now face losing their job and being saddled with unmanageable vehicle related debt.
“To strip Uber of it’s license after five years of laissez faire regulation is a testament to a systemic failure at TfL.
“Rather than banish Uber, TfL should have strengthened its regulatory oversight, curbed runaway licensing and protected the worker rights of drivers.
“The Mayor must call for an urgent independent review of TfL to identify the causes of failure and prevent something like this from ever happening again.”
‘Courageous decision’
Responding to the announcement, Wes Streeting, Labour MP for Ilford North and Chair of the All Party Parliamentary Group on Taxis said: “This is a courageous decision by the Mayor and Transport for London, finally drawing a line in the sand to make it clear that no company, however big and powerful, will be allowed to flout our laws and regulations or jeopardise Londoner’s safety without facing serious consequences.
“Uber has not shown itself to be a fit and proper operator. It stands accused by the Police of failing to properly handle serious allegations of rape and sexual assault of passengers.
“It had to be dragged through the courts to recognise its responsibility to provide even the most basic rights and protections to Uber drivers. Its business model is based on saturating London’s taxi and private hire market to drive its competition off the road.
“That’s why major cities across North America and Europe have already banned Uber from operating on their roads.
“Competition and innovation is welcome and encouraged, but everyone must abide by the rules.
“If Uber want to operate on the streets of London again, they should clean up their act by putting passenger safety first, paying their drivers fairly by recognising their rights as employees and adhering to the same rules as everyone else.
“Sadiq Khan gave fair warning when he stood for election that he would take action if Uber, or any other operator, failed to play by the rules. Today’s decision shows that the Mayor keeps his word and is prepared to stand up to powerful vested interests to keep Londoners safe.”
Steve McNamara, General Secretary of the Licensed Taxi Drivers’ Association said: “The Mayor has made the right call not to relicense Uber. 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.
“We expect Uber will again embark on a spurious legal challenge against the Mayor and TfL, and we will urge the court to uphold this decision. This immoral company has no place on London’s streets.”
Frances O’Grady of the Trades Union Congress said the ruling should act as a “cautionary tale” for so-called ‘gig economy’ employers.
Chair of the Commons Work and Pensions committee, Labour MP Frank Field, said: “This could be a game changer for the gig economy.
“Uber must now respond to TfL’s decision by totally resetting its business model.
“This new model will need to be built upon two foundations: a safe and reliable service for every passenger; and a living wage and fairer conditions for every driver who makes themselves available for work.”
But senior Conservatives slammed the ruling. Ex-Digital Economy Minister Ed Vaizey described it as “catastrophic”.
Former London mayoral candidate Zac Goldsmith said the decision will “backfire” on City Hall.
Uber isn’t the only app facing difficulties in London.
Taxify was also forced to suspend services only three days after launching earlier this month because it had partnered with a ride company that already had a license. Its application for its own license is still pending.
This breaking news story has been fully updated throughout.