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Uber Shares Up on Winning 18-Month London License Extension

Uber Technologies’ UBER shares gained 3.2% at the close of business on Sep 28, following a court ruling, which granted the company an 18-month license extension to continue operating in London.

Last November, Transport for London (TfL) revoked Uber’s license to operate in the U.K. capital, citing a “pattern of failures” which put passengers at risk. The TfL said that due to a glitch in Uber’s system, unauthorized drivers were able to upload their photos to other driver accounts and pick up passengers illegally in at least 14,000 trips. This was the second time that the company was denied a new license to operate in the city, the first being in 2017 on similar safety-related issues.

Although TfL revoked Uber’s license in November 2019, the company was allowed to continue operations in London while the appeal process was ongoing. As part of its efforts to win back its London license, Uber enhanced safety measures in April by introducing new features such as facial recognition and human reviewers for driver verification.

Granting Uber permission to continue operations in London, judge Tan Ikram stated that he had “sufficient confidence” Uber “no longer poses a risk to public safety.” He also said, “Despite their historical failings, I find (Uber), now, to be a fit and proper person to hold a London PHV (private hire vehicle) operator’s license.”

21 Conditions for License Extension

The license extension comes with several conditions agreed upon by both Uber and TfL. Most of these 21 conditions are associated with driver-photo identification and insurance fraud. Uber’s previous permit had 14 conditions attached. TfL’s lawyer Marie Demetriou “considers it important to retain a close eye on Uber” given “the serious historical breaches.”

Anna McCaffrey, a lawyer at Taylor Wessing, stated that it “demonstrates that Uber will have to work hard to continue to prove to TfL and the court that it has really changed.” McCaffrey further added “If not, Uber is likely to find itself back in court.”

Ruling Draws Flak From Black Cab Industry

London’s black cab industry, which has often been at loggerheads with Uber over regulation and competitive fares, highly criticized the decision to extend Uber’s license. Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association regarded the decision as a “disaster for London”. In a statement McNamara said, “Uber has demonstrated time and time again that it simply can’t be trusted to put the safety of Londoners, its drivers and other road users above profit. Sadly, it seems that Uber is too big to regulate effectively, but too big to fail.”

Uber Embroiled in Several Other Legal Battles

Uber’s win in the recent court battle represents a major victory, allowing the company to continue operations in one of its most important international markets with roughly 45,000 drivers. However, it’s not the end of troubles for Uber. The company still has a number of lawsuits to fight.

In the United Kingdom itself, the company is fighting a case where drivers want to be treated as workers with employment protections such as a minimum wage and holiday pay. Uber, which classifies drivers as independent contractors, has been appealing the case for years. A ruling on this is expected this year. Additionally, in its home state of California, Uber is appealing a similar driver-classification case. In the event of a negative ruling, the company will have to change its business model of hiring workers as contractors. In such as case, the company’s costs would inevitably increase.

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