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27 June 2018

Transport for London’s game of bluff with Uber worked – now it has to play by the rules

Uber, the minicab firm for the smartphone age, has been given a reprieve. 

By Jonn Elledge

Uber, the minicab firm for the smartphone age, has been given a reprieve. Following a two-day court battle, it’s been granted a licence to continue operating in London.

This is obviously good news for Uber, and also for anyone who uses its services without suffering from the guilty suspicion that by doing so they’re helping to shred the social contract. Back in September, you’ll recall, Transport for London, the capital’s transport authority, told the firm it wouldn’t be renewing its private operator licence on the grounds it was not satisfied that Uber was a fit and proper company to hold such a licence. Now it gets its licence back. Huzzah.

So, Uber has won, right? Well, that’s almost certainly how this will be framed, both by the company and by breathless tech reporters. The company got what it wanted: a licence to continue operating in one of its biggest and most profitable markets.

But I’m not convinced this is the right way of looking at this story. I think TfL just won, too.

For one thing, to get this far Uber has had to pour a lot of effort into convincing TfL, and the courts, that it had addressed TfL’s concerns: those observing the case have said that the core of Uber’s argument has been (I paraphrase) “Please take me back, I’ve changed.”

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More than that, its new licence lasts only 15 months, which will take us to September 2019. To keep going beyond that, it’ll have to show it can keep changing. At time of writing, the story is still developing (code for “journalists are still frantically hammering out their reports”) – but Business Insider says that that licence is dependent on an independently verified audit every six months; better reporting of complaints and data breaches; and better training for drivers.

At the time TfL cancelled Uber’s licence, I speculated that the whole affair was a negotiating tactic. My theory was that TfL wasn’t seriously trying to rid the firm from the streets of the capital – simply to accept its right and responsibilities to regulate it.

Whether I was right about that or not (I’ve heard mixed reports), that is how things have worked out. When other cities, such as Austin, Texas, have tried to regulate Uber, the company has simply pulled out. But London was too big and too profitable. By threatening its licence, TfL was able to force Uber to raise its game.

And it worked. Uber has addressed TfL’s concerns, and will have to keep addressing them to stay in business.

Uber has won, in that it can keep running cabs in the capital. But its days of doing what it likes on the unregulated fringes of capitalism are over. Now it has to play by the rules.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as Jonn Elledge Writes.