London ride-hailing. Earlier this week Uber lost their licence to operate in London, its biggest single market, for the second time. As with the previous loss, they will be allowed to continue to operate for months if not a year or more while the decision is appealed. The net effect of Transport for London’s (TfL) two decisions is that Uber’s services have not been curtailed, although a significant degree of uncertainty and potentially acrimonious debate has been introduced, both in London and by association in to other UK Towns and Cities where Uber operates, or may be looking to operate.
There is speculation that if Uber doesn’t retain its licence its estimated 45k drivers and 3.5m customers in London will simply move to one of a number of competing platforms already operating, or who might see Uber’s problems as an opportunity to accelerate plans to join the London market. Whether TfL also has any issues with the operational manner and means of any or all of these other ride-hailing services is unclear.
Claim and counter claim rage. On one side Uber supporters (and there are a lot of them) say that the errors, omissions and system failures that lead to the original loss of licence have now been corrected and this is simply protectionism designed to support the traditional black taxi industry. At the other end of the scale, TfL believe that there are serious and ongoing causes for concern about the Uber model and business practices which combined make Uber “not fit and proper” to hold a licence in London. The rights and wrongs of this will again now be settled in court, presumably (hopefully) for the last time?
This is perhaps yet another good example of the dilemma faced by regulating bodies who have a legal responsibility to ensure that licenced or regulated activities are conducted correctly. If they don’t then they will be held to public account as much if not more for any future failing of those they are charged with overseeing. Meanwhile they are under increasing pressure to take a much more relaxed view on regulation, including apparently from some in Government, who remain keen to see disruptive technologies innovate and shakeup existing business models and established markets.
Before taking a view, it is worth looking at some of the issues that TfL have found in the Uber checks and balances and the potential customer safety issues that these have and, according to TfL at least, might still allow:
Lest any of us forget, the drivers of taxi and private hire vehicles are licenced precisely because this it is trade that has a history of issues and problems and one that is known to be open to misuse and abuse, some of it on the extreme end of the scale. Fundamentally changing how the business model works, has not fundamentally changed the opportunities for misuse of the system or, more importantly, altered the need to protect customers from abuse via rigorously applied checks on the suitability and character of the drivers employed. Nor has it removed the employer’s responsibility for supervising their employee’s behaviour and for reporting serious breaches to the appropriate authorities.
In the case of platform providers, like Uber, there is an added difficulty. They don’t necessarily wish to be regarded as employers, or the drivers as employees and will do pretty much everything they can to avoid that relationship and the raft of responsibilities attached to those responsibilities becoming legally established. When it comes to balancing the safety of paying customers, innovation, or the specific operating conditions needed for disruptive business models to flourish, I hope would hope you would all agree that public protection should be the first and primary priority.
Ride hailing and the environment. Also, in the news recently, whilst Uber and other similar providers claim that they are reducing car usage in major Towns and Cities and, thus, directly contributing to environmental improvement. There is growing evidence that their introduction and subsequent growth has directly contributed to a significant increasing number of cars in use, rather than reducing it. Currently the vast majority of those additional vehicles circulating in our major Towns and Cities are fossil fuelled. Until Uber and other platforms fully embrace the use of electric vehicles, some of all of their headline environmental claims and credentials will remain suspect.
The debate about environmental pros and cons of increased use of taxi cabs and private hire vehicles, as opposed, or in parallel to increased use of public transport has some considerable way to run. It is likely to become a specific sub set or subject area within the complex, local transport, carbon net zero debate. Whilst it remains subject to licencing, it is one at least that wider local authority and destination management interests have some reasonable hope of actually physically influencing.
Other taxi issues. A number of other licensing authorities outside London, where Uber operates or may seek to operate in future, will doubtless be looking at the TfL decision and the outcome of any appeal. Indeed, yesterday Manchester expressed a desire to speak to Uber, regarding, I understand, wider licencing issues outlined below.
There are increasing concerns about the general taxi and private hire licencing arrangements in England. Deregulation measures brought in some years ago that have allowed drivers to obtain a licence in one area and then operate in almost any other, have been called into question by the Transport Select Committee. The original aim was to encourage competition and make the processes both simpler and less expensive. The committee believe that the deregulated system is open to abuse that allow unsuitable individuals to obtain licences without due scrutiny; scrutiny that for good practical reason is often best undertaken locally. Manchester, for example, are concerned at the number of Uber drivers operating on licences issued by other authorities that are known to use far more relaxed standards than the City requires when issuing its licences.
Encouraging competition in the market for the issuing of licences is one thing, but in effect undermining local determination of the appropriate standards for the delivery of that licenced service, in the place that the service is then actually delivered is quite another.
A DfT review on the issues raised by the Select Committee, which was about to take place, has now been shelved due to the General Election. It is to be hoped that any new Government will decide to conduct a similar review or as the committee recommended a consultation without the need for a new Select Committee Inquiry or without further encouragement from within or without Parliament.
Interested parties would be well advised to watch out for developments post-election and act accordingly, as without a review or consultation, little or no change is likely. To date we have taken no active part in this debate. There are mixed views as to whether the issues are important enough to tourism, to destination management and therefore British Destinations members for us to take further action? Member’s views on this would be welcomed.
The Committees key finding and Government response to the 14 recommendation can be accessed at: