Why London’s Uber Ban is a Disaster for Britain

Uber is still operating in London, but their license to continue to do so expires at the end of the month and it’s been announced that it will not be renewed.

To be clear Uber can appeal, and the regulatory decision spells out concerns that Uber will no doubt offer to placate, but the process wasn’t to judiciously negotiate with Uber it was to dramatically drop the hammer.

Need I mention as Tyler Cowen does that London’s Uber ban refutes the argument for Brexit “that European Union regulation was horribly restrictive, and British business would blossom under a reign of newfound freedom”?

And no matter what you think of Uber and its myriad problems this sends a signal that regulation of disruptive businesses will be swift and harsh, and London will protect entrenched interests. What will that do for the UK’s attempt to attract capital and tech businesses going forward?

Uber is a transfer of billions of dollars from investors to drivers and consumers. Moreover withdrawing Uber from the market hurts poorer Londoners most as Cowen notes,

Over time, let’s say Uber would continue to encroach upon the cab business. It then becomes harder to hail cabs, as arguably is already the case. Uber fares might be lower, but the average quality of the ride would be lower too. That’s a better deal for poorer people, and an inferior deal for the well-off. Wealthy people are just fine with paying more and getting the better service.

..Keep in mind the London Tube is not 24/7, and cabs are often more reluctant to pick up customers from dicier neighborhoods.

Uber has its share of challenges, which is why the company’s CEO was ousted. But this is a story about the UK’s regulatory processes, its institutions, and the signals those send to tech startups and investors around the world about what Britain will be like after its impulses are no longer held somewhat in check by the EU.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I noticed last trip to London, that nearly all of our Uber drivers were immigrants of some sort who were RENTING a Prius to do the job. Now imagine all those predominantly young men thrown out of work, scrabbling for another way to pay bills. I expect side effects.

    Our relatives there, and other locals seem to use Uber more than I expected. The Tube is great, but it’s not the solution to every transport problem.

  2. Or maybe there will just be some other company that has better ethics to swoop in and take the business. I use Uber, but at SOME point their continued illegal actions have to catch up to them. They have a renewable licence, and they don’t qualify for renewal. Sometimes the do first, ask for forgiveness later mentality loses you wars.

  3. “..Keep in mind the London Tube is not 24/7”

    has he been hiding under a rock ? Night Tube has been operational for quite some time.

  4. Uber didn’t really provide anything new in London other than an app that allowed the hailing of licensed private hire vehicles (minicabs). Yes it stimulated the industry and tilted the balance away from black cabs but it wasn’t providing much new.

    Without Uber there will still be a bunch of ways of getting a minicab in London, they won’t go away, there won’t be hordes of out of work minicab drivers.

    Uber have lost their license because they are not a fit a proper organisation to operate a licensed private hire organisation thanks to their dubious business practices. If you ever went to a minicab office at 2am in the old pre-app era, you’d know what a damning indictment that was.

  5. Lol. Poor people can use public transport. London have busses besides the tube. Very stupid and weak argument. Lol

  6. @henry LAX A quote from TFL for you:

    “The Night Tube is running Fridays and Saturdays on the Victoria, Jubilee, and most of the Central, Northern and Piccadilly lines.”

    Here’s a thought: How about you check your facts before you jump in with criticism? Or is that asking too much?

  7. I’m thrilled. Couldn’t have happened to a nicer company.

    What TfL requires of Uber and any other operator is very clear. Plenty of rideshare operators manage to satisfy the regulations in London. It’s only fair that Uber should do so too. To not ask this of the industry leader is to give them an advantage that will leave London with a single operator and an uncompetitive market in a few years time.

    Uber has a cultural resistance to local government (apparently due to being run by Libertarian bro cranks, but the reason doesn’t really matter). It has failed to satisfy these regulations despite being given an unambiguous warning this was coming earlier this year. Turns out TfL wans’t kidding.

  8. “And no matter what you think of Uber and its myriad problems…”?!

    It couldn’t matter more what you think of Uber and it’s myriad problems. That’s literally the point.

  9. This is not a story about “process”. Or if it is, your post fails to acknowledge that the process as open and clear, and Uber had ample warning when, four months ago, it was granted a temporary license and told to change the way it does business (https://www.theguardian.com/technology/2017/may/26/ubers-london-licence-renewed-for-only-four-months).

    It’s a story about the regulations, and the fact that Uber is in continual violation of them. If you think this is the wrong decision, you need to explain which of those regulations (which are designed to ensure competition and safety) are worth turning a blind eye to in the interests of ensuring Britain stays in the good graces of America’s Executive Platinum blazer and khakis crowd, and sociopathic entrepreneurs such as the ex-Uber CEO.

  10. I guess Brexit Brits are as stupid as their American trump deplorables counterpart…

    Just like they continue to support the scumbag who manufactures all his products in China and claims to want to make America great again, across the pond few will question how this correlates to the Brexit claims.

  11. Uber went from my first choice to my last choice once the drivers started playing games with ratings, tips, not showing up, taking other riders after confirming, calling to ask about destinations, etc. When it was seamless it was great, but now I usually get more reliable service from taxis.

  12. @Joelfreak – it’s important to uber’s business to be in london, of course he’ll bow and scrape, which entirely misses the point about what signal this sends that won’t help the UK

  13. Gary. I couldn’t agree with you more. I actively plan trips around whether there will be Uber, as I find trips with Uber are more time efficient than those without.

    And to those who say: “that’s absurd, how could you refuse to visit YVR or BCN based on such a small thing” I say, of course I’ll visit them eventually… when they get around to legalizing Uber (YVR already on the way)

  14. Uber is finally obeying the laws and ordinances of a jurisdiction? I guess London is powerful enough to back them down. Baby steps…

  15. Gary I concur 100% with everything but let’s not pretend this is about regulation. This is about a powerful monopoly (taxi cabs) fighting back as they have done for years all over the world and the politics of appeasing the taxi drivers and their friends in Labour vs. the less politically connected immigrants and consumers who rarely have a seat at the table. Uber has a lot of flaws but IME in the UK, France and all over the USA Uber provides a much better product at a much better price. Uber should be given a chance to correct its way (as is the case with most companies cited for regulatory violations) rather than given the death penalty like Arthur Andersen.

  16. Uber’s new CEO:
    “Dear London: we r far from perfect but we have 40k licensed drivers and 3.5mm Londoners depending on us. Pls work w/us to make things right”

    In reply, Susan Fowler, the engineer who was harassed and abused for the year she worked there (and set in motion the previous CEO’s ouster):
    “Not off to a great start
    I have some advice: how about…try following the law?”

  17. Jeff: concern trolling about “process”, and how this will be perceived by people who don’t live in London and don’t share its values, is missing the point.

    The point is, while your post didn’t discuss this, there are very simple, straightforward, consistently applied rules about running a taxi service in London. They ensure the safety of Londoners and their consistent application will ensure a fair playing field as rideshare services grow. Uber’s competitors in London follows these rules (and I don’t just mean the black cabs: Uber has direct competitors in London.) Uber was warned about this four months ago. When it demonstrates it intends to follow these rules like everyone else, and perhaps throws in a few good faith gestures that don’t read like the breathtaking arrogance of “please work w/ us”, maybe they’ll be back.

    In the short term, you’re probably right that this will inconvenience people, and perhaps even cost London money. In the long term, however, a corporation learning that it doesn’t get to say “please work w/ us” to democratic institutions, and this is not a negotiation, will be good for competition and service.

  18. I always recommend Uber to families or small groups who will be staying in London for just a couple of days. The Tube can be a real ripoff to tourists who don’t jump through the Oyster card hoops, and taxis are considerably more expensive. Uber is a real time and moneysaver for many tourists.

  19. Black (taxi) cabs have never been a monopoly in London do that argument doesn’t appply. There has always been a thriving private hire industry there. The only thing Iber reallly brought was an app and a willingness to endanger customers with sharp business practices. In the London context Uber was far less ‘disruptive’ than in other markets. The disruption happened years before and sensible regulation was put in place to deal with it.

    There’s an interesting story about how London was the last jurisdiction in the Uk to license the minicab trade due to the lack of a London government between the dissolution of the GLC and the establishment of the GLA. When I was growing up getting into a minicab was basically putting your life in the hands of a frenquently uninsured and probably unlicensed driver and definitely something a solo women ought to think twice about. The regulations that Uber is flouting we’re put in place to manage this dangerous free for all and it’s not innovative to flagrantly flout them.

  20. If you want to point to the real innovator in the London can market it was Addison Lee in the 90s who built a business on safe clean mini cabs with well turned out drivers in the 90s. (Even if their CEO would give Travis Kalanick a run for his money in the arsehole stakes)

  21. Getting around when you’re traveling in a different country can be a little scary for traveling newbies. Uber makes that a little easier, so hopefully this will all work itself out. Thank for the info.
    Cheers,
    Rhonda

  22. London had two types of cabs for many years, black cabs and minicabs, both heavily regulated to ensure the safety of passengers. Uber had some impact on black cabs’ business but really decimated the existing minicab market. Black cabs have felt hard done by over Uber and have complained bitterly for years. If Uber does leave the London market, black cabs will be pleased with themselves but the other minicab firms will be delighted to get all that business back again. Uber is convenient but I don’t think it will be all that missed.

  23. Never used Uber, don’t know if I ever will, however taking away consumer’s choice is never a good thing. The commies running London are determined to destroy it, one way or another. Uber is just another component of that goal.

  24. “Uber fares might be lower, but the average quality of the ride would be lower too.”
    BS. I used uber many times on my last two trips to London, along with some black cab rides. Every uber ride was better, with better service and friendlier drivers. The many factors that led to the Uber ban can be debated, but personal experience trumps all (especially when it comes to choosing a service).

  25. Ever tried catching a Black Cab at around 11:30pm in London? If you’re not going in the direction where the cabbie lives you’re out of luck and they’ll flat out refuse to take you.

    I’ve never had a London Uber driver refuse to pick me up because he wasn’t “going that way” – I’ve lost count of the number of times a Black Cab driver has said that to me…..and that’s mostly from Black Cabs sitting at cab ranks in the middle of London!

  26. @Mike doesn’t matter, my point is that’s the narrative that is being broadcast and that has consequences no matter how much you’d like it not to be perceived that way

  27. Your encouraging other people to worry about “the narrative” is the dictionary definition of concern trolling.

    If you’re not interested in the reason why their license hasn’t been renewed, which is covered in detail in that link, then you’re not debating in good faith.

    Nevertheless, I take my hat off to you for juicing your page impressions.

  28. @Mike — the entire POINT of the post is that the very public ban announcement is a disaster for Britain.

    And I’m well familiar with the reasons given for the ban. The article you link to really does make my point. The rube goldberg scheme Uber has needed to operate under in order to exist there is mind boggling.

    By treating it as fact that one entity needs to be a minicab operator makes the point that it’s the regulations that are out of date and inhibiting innovation, and that puts other entrepreneurs and tech companies on worldwide notice that the UK isn’t a place to do business in a post-Brexit world.

  29. The people who try and claim “Uber wasn’t doing anything for London so good riddance” are morons.

    If a business isn’t doing anything in a free market, it will go out of business. As it turns out, all of those tens of thongs of rides occurring all the time we’re being purchased by consumers who were aware of their alternatives and chose Uber instead.

    Losing Uber is a horrible thing.

  30. I understand that the supposed point of your post is to raise concerns about the way this move will be perceived. If you insist that’s really what you’re interested in, and this isn’t concern trolling, then it seems worth looking at the kind of terrible PR this decision is generating:

    “By defying regulation, Uber has forced the regulated industry to stop resting on its laurels and move with the times, especially with respect to digital convenience and digital payment. Fine, that’s happened now. But whether such added qualities justify a private monopoly being granted to Uber, on terms that are different to everyone else in the market, is another matter entirely — especially given the controversy over whether they really cater to everyone’s interests in this game fairly and over whether they’ve really added value in terms of the sort of innovation that grows the pie for everyone.”

    This is from the FT, that bastion of protectionist leftist propaganda, by the way.

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