By Sam Dumitriu, Research Director at The Entrepreneurs Network
Transport for London’s decision to strip Uber of its license to operate will have ramifications far beyond the private hire market. While Sadiq Khan protests that ‘London is open’ and ‘there is undoubtedly a place for innovative companies in London’, TfL is sending a signal that disruption isn’t welcome in the capital.
Uber has been in London for under ten years, yet it’s hard to imagine life without it. Let’s be clear, TfL has uncovered problems with Uber and forced Uber to make important changes. The latest discovery that 14,000 trips over a 5-month period took place with uninsured and wrongly identified drivers is troubling. But context is needed. While TfL concedes Uber has addressed the issue, its license was revoked on the grounds that TfL wasn’t convinced that Uber was a ‘fit and proper’ operator able to prevent future safety issues
There’s a whiff of double standards. As London Assembly Member Andrew Boff points out, Uber is operating under a level of scrutiny which doesn’t apply to other firms: “why shouldn’t all PHV operators, not just Uber, have to fill out “Assurance reports” for TfL and have regular reporting to the Police?” He notes that it was Uber that brought the information about the 43 fraudulent drivers to TfL’s attention.
I wouldn’t be surprised if other minicab firms, whether app-based or not, have similar safety issues. The right solution is to work with operators to uncover the issues as quickly as possible and ensure they are addressed in a transparent manner.
“If London and the UK is to be open to innovation and disruption in the future, then we need to reject this worrying precedent.”
On the whole, Uber’s entry, along with competition from other app-based ridesharing services has led to major safety improvements for Londoners. The direct safety benefits are clear. GPS tracking, 2-way ratings, and the ability to know who your driver is before they arrive were revolutionary. But they go beyond that too. Uber has cut wait-times and allowed people outside of central London to travel home with confidence.
As Evening Standard journalist Sophie Sleigh argues, this provides a real benefit compared to Black Cabs: “I’ve been put in undoubtedly “dangerous” situations by cab drivers who’ve thrown me out because they change their mind about going to east London etc. Meanwhile Uber is always reliable and able to pick me up at obscure times/places.”
The good news is that this isn’t 2017, Londoners won’t need to go back to black cabs. They’ll be able to choose between Kapten, Bolt, Kabbee and many more apps, if Uber can’t operate. However, it’s a worrying precedent. TfL’s move against Uber was undoubtedly driven by pressure from the influential taxi lobby, the LTDA. When a new market leader emerges, they’ll face similar pressure, which could chill investment and the deployment of new innovative services. If other regulators are seen to be pliant to special interest lobbying, this could economy-wide implications.
Consumers, innovators, and drivers need to push back against TfL’s overreach. If London and the UK is to be open to innovation and disruption in the future, then we need to reject this worrying precedent.