Uber Losing Battle in London After Regulator Revokes License

Uber was struck with a stunning rebuke in London, where regulators revoked its license to operate and chastised its corporate culture, adding to the expansive list of controversies facing the beleaguered ride-hailing company, according to Bloomberg.

London is one of Uber’s largest and most lucrative markets, with 40,000 drivers and 3.5 million people who use the app once every 90 days. Transportation authorities in London concluded Uber isn’t "fit and proper to hold a private hire operator license." The agency cited a failure to do proper background checks on drivers, report crimes, and a program called "Greyball" used to avoid regulators.

The company has 21 days to appeal, and can continue to operate during the appeal process. "We intend to immediately challenge this in the courts," said Tom Elvidge, general manager of Uber in London. The company has faced resistance in markets from Paris to the Philippines, but London’s ruling is one of the most aggressive to date. The decision pits the popularity of the company among millions of customers, against regulators and taxi drivers who want tighter controls.

The outcome also has financial implications for Uber at a time when its backers are in talks involving a potential $12 billion stake from SoftBank and other investors. Uber has been valued at about $70 billion. As Uber has upended the global transportation industry, it has also invited controversy.

Authorities faulted Uber earlier this year for allowing a London driver who had sexually assaulted a rider to get back on the road. Uber’s "approach and conduct demonstrate a lack of corporate responsibility," the regulator, Transport for London, said in a statement.

The decision was cheered by the city’s traditional black cab industry, which has been hurt by the proliferation of Uber drivers and has aggressively pushed for tighter regulation of the ride-hailing service. Taxi drivers, many of whom now use the rival apps Gett and MyTaxi, must go through extensive testing before receiving a license, while Uber drivers have fewer requirements.

“No company can behave like it’s above the law, and that includes Uber," said Maria Ludkin, Legal Director of GMB, the U.K.’s drivers union. "No doubt other major cities will be looking at this decision and considering Uber’s future on their own streets." Uber disputed the allegations made by regulators. The company said it conducts thorough background checks of drivers and had made several changes to improve safety. The company also said the Greyball program had never been in the U.K. "for the purposes cited by TfL.