Uber granted 18-month London license as judge overturns ban

Uber won its legal fight to continue operating in London as a judge overturned a ban on the ride-hailing app by the city’s transport regulator and granted it a new 18-month license. In 2019, Transport for London (TfL) stripped Uber of its license for a second time. TfL first declined to renew Uber’s London license in 2017, citing a pattern of failures that had put passengers at risk.

A glitch in Uber’s systems allowed unauthorized drivers to upload their photos to other driver accounts and fraudulently pick up passengers in at least 14,000 journeys. Handing down his decision at the Westminster Magistrates’ Court, Judge Tan Ikram said he had sufficient confidence Uber no longer poses a risk to public safety. Despite Uber’s historical failings, Ikram finds the company now to be fit and proper to hold a London private hire vehicle (PHV) operator’s license.

Uber’s new London license will last 18 months and comes with several conditions jointly agreed by the company and TfL. Uber shares climbed 6% in premarket trading following the decision, but later settled to trade 3% higher. This decision is a recognition of Uber’s commitment to safety and the company will continue to work constructively with TfL. There is nothing more important than the safety of the people who use the Uber app as the company work together to keep London moving.

Uber had tried to allay the regulator’s passenger safety concerns, introducing a new system to verify drivers’ identities through a mix of facial recognition and human reviewers.

Despite losing its license, Uber was still able to operate in London as it appealed the ban. London is Uber’s largest market by far in Europe. Uber has racked up around 3.5 million users and 45,000 drivers in the United Kingdom capital since launching there in 2012. Uber is the city’s top ride-hailing player but faces heavy competition from several new operators including India’s Ola, Estonia’s Bolt, and Germany’s Free Now.

The process has sent a clear and impactful message to all operators, that cutting corners and potential endangerment of drivers and passengers will not be tolerated in London. The ruling removes a key source of regulatory uncertainty for Uber. But Uber still faces a number of legal battles around the world. In California, Uber is fighting a lawsuit that would see its drivers reclassified as employees.

Uber is also fighting a similar case in the United Kingdom’s Supreme Court, where drivers want to be treated as workers entitled to protections like a minimum wage and holiday pay. A loss for Uber would hold significant consequences for the so-called gig economy. A verdict is expected late 2020. The decision to restore Uber’s London license drew a fierce reaction from the city’s iconic black cab industry, which has frequently clashed with the company over regulation and competitive fares.

In August 2020, a California judge granted a preliminary injunction requiring Uber and Lyft to stop classifying their drivers as independent contractors pending further action by the court.

The order would take effect after 10 days, as the companies requested a brief stay during the appeals process. If upheld, the ruling could have serious implications for Uber and Lyft, both of which were not yet profitable and had seen their ride-hailing businesses suffer during the pandemic. By classifying their drivers as independent workers, rather than employees, the companies did not have to pay for costly benefits that came with a full-time staff.

California Attorney General Xavier Becerra requested the injunction as part of a lawsuit he brought along with city attorneys from San Francisco, Los Angeles, and San Diego. The suit, filed in San Francisco Superior Court, alleged Uber and Lyft violated the state’s new law known as Assembly Bill 5 (AB5), which was created as a way to classify gig workers as full employees and ensure benefits from their employers. Uber and Lyft were among a group of tech companies that had previously opposed the bill, arguing their workers enjoy the flexibility of creating their own schedules as contractors.

California officials sought an injunction on the alleged misclassification and restitution for workers and civil penalties worth up to hundreds of millions of dollars. Shares of Uber were down 1.3% and Lyft shares were down 2.1%. Both companies said they would appeal the ruling immediately. When over 3 million Californians were without a job, elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.

Drivers did not want to be employees, full stop.

Lyft would immediately appeal this ruling and continue to fight for its independence. Ultimately, Lyft believed this issue would be decided by California voters and that they would side with drivers. While this fight still had a long way to go, officials were pushing ahead to make sure the people of California got the workplace protections they deserved.

Californian state and workers should not have to foot the bill when big businesses try to skip out on their responsibilities. Khosrowshahi argued there should be a way for workers to gain protections without sacrificing the flexibility of contract work. The Court did not take lightly Defendants’ showing that a preliminary injunction might also have an adverse effect on some of their drivers, many of whom desired the flexibility to continue working as they had in the past, and might have commitments that made it difficult if not impossible for them to become full-time employees.

Defendants might not evade legislative mandates merely because their businesses were so large that they affected the lives of many thousands of people. Now, when Defendants’ ridership is at an all-time low, might be the best time for Defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers. If this reasoning to be accepted, the rapidly expanding majority of industries that rely heavily on technology could, with impunity, deprive legions of workers of the basic protections afforded to employees by state labor and employment laws.

California’s Labor Commissioner announced lawsuits against the companies alleging wage theft due to misclassification.

The commission sought to recover wages it believed were owed to drivers currently classified as contractors. The suits were filed in Alameda County Superior Court.