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29 September 2017

London’s Uber ban: are some big tech firms too popular to control?

Even many on the left have bemoaned the potential loss of a cheap ride.

By Rosamund Urwin

Uber’s bosses want you to see the company not as a rule-breaking, tax-avoiding multinational minicab empire, but as a scrappy, lovable tech start-up. That explains why Uber’s first public move after Transport for London (TfL) revoked its private hire licence on 22 September was to start a petition – ordinarily the recourse of the otherwise impotent. “Save your Uber in London,” it declared, as though it were a local library imperilled by austerity, not a global business worth $60bn.

Some 787,000 people have signed that petition. Right-wing commentators in the Spectator and the Daily Mail accused TfL and the Mayor of London, Sadiq Khan, of protectionism, while even many on the left bemoaned the potential loss of a cheap ride. This was the reaction for an operator that the regulator declared was not “fit and proper” to hold a licence. In the years preceding the financial crisis, banks became too big to fail. Now Silicon Valley has given us tech firms too popular to proscribe.

This has injected arrogance into Uber’s corporate culture. It took the new chief executive, Dara Khosrowshahi – perhaps struggling to locate contrition on his emotional map – three days to apologise. He accepted that Uber had made “mistakes” in London but, behind the scenes, the firm was accusing transport officials of not giving it a chance to fix its problems.

Uber’s attraction lies in the cost (it’s usually much cheaper than a black cab) and the convenience. It stopped the rush for the last train at parties; it brought innovation and competition to the market; in 2015, it introduced UberPool, which enables passengers to share cars with strangers – a cheaper, greener journey than a taxi ride. It has also encouraged black cabs to improve their service. More now accept card payments since Uber eliminated the need to carry cash.

But Uber has long flouted the rules. It is currently acting as though it were the owner of a restaurant that the food standards inspector closed after finding a lone rat in the kitchen. That is disingenuous. In May, Uber was given only a four-month extension on its licence to operate after a series of controversies about its working practices. There were a lot of rats in that kitchen.

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At the Labour party conference in Brighton, the Ilford North MP, Wes Streeting, told me that Uber had adopted an “ostrich strategy, pretending everything was fine”. A mayoral aide added that the company’s usual approach – now softened by the removal of its licence – was an “aggressive combination of refusing to talk to TfL when asked for information and demanding TfL go through lawyers”.

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The worst of the company’s alleged sins emerged in a letter written in April, in which the Met claimed that Uber had failed to handle criminal complaints adequately. Examples included a “road-rage” incident, in which a driver allegedly pulled out pepper spray during an altercation with another motorist, and sexual assaults. The police accused Uber of allowing a driver who had sexually assaulted a passenger to stay on the company’s books, leading to an attack on another woman. The transport authority also raised concerns about Uber’s possible use of “Greyball” – software that it had employed in the US to thwart government regulators (the firm denies that it has been used for that reason here).

There are other grounds to criticise the company. Uber refused to classify its drivers as employees – denying them the workplace protection that most people enjoy. A report by the Labour MP Frank Field accused Uber of treating its drivers as “sweated labour” and claimed that some took home less than the minimum wage. Its policy of allowing passengers to rate drivers on a five-star scale – if they slip too low, they can be deactivated – is so pernicious that Charlie Brooker extrapolated it for an episode of Black Mirror.

Then there’s the masterclass in misogyny that its corporate culture offers. Susan Fowler, an engineer who worked for Uber in California, wrote an account of the sexual harassment and discrimination she suffered there that was so damning that the resulting investigation led 20 staff to be sacked. Other female employees later came forward, putting pressure on the then CEO, Travis Kalanick, to resign. The company then provided the headline of the year, in the Washington Post: “Uber’s search for a female CEO has been narrowed down to three men”.

And yet 3.5 million Londoners use Uber. During the 2016 presidential election campaign, Donald Trump said he could shoot someone in the middle of Fifth Avenue and he wouldn’t lose any voters. Uber seems like his corporate equivalent – what would it have to do to lose significant support?

What’s strange is that some of those who use Uber are the type of people who buy fair-trade bananas and criticise tax-avoiding companies. They feel entitled to cheap cabs in the same way that people buy sweat-shop clothes unquestioningly. Perhaps some customers have also been misled about what sparked the current battle with TfL. Uber has framed this as an attack on the app. It isn’t. The app is run by a separate, Netherlands-based company; TfL’s fight is with Uber London, which dispatches the cars. It’s not unreasonable to think that there’s a vital role for regulation in ensuring passenger safety.

I imagine that TfL and Uber will eventually reach a deal. Sadiq Khan will push for this, aware that so many of his voters are Uber customers. Yet the controversy surrounding the company is unlikely to disappear. Uber’s pricing model is unsustainable. It is running up huge losses – $645m in the second quarter of this year – that help it offer the cheap fares that endanger its rivals. Prices will eventually have to rise. When they do, even Uber loyalists may feel that they’ve been taken for a ride.