On 22 September 2017 Transport for London said it will not grant Uber a new operator licence because it does not consider it fit and proper. Uber can appeal and keeps operating meanwhile. What is known and what it means for other platforms.
On 22 September 2017 Transport for London (TfL), the body that regulates transport in the British capital, told Uber London Limited that it will not be granted a private hire operator licence when its current one expires on 30 September. TfL concluded that the company is “not fit and proper” to hold that licence. It had granted the first licence in 2012 and, on 26 May 2017, had granted a four-month licence while it considered a five-year one.
The four grounds
TfL pointed to four issues of corporate responsibility with potential public safety and security implications: how the company reports serious criminal offences to the authorities; how it obtains drivers’ medical certificates; how it obtains Enhanced Disclosure and Barring Service (DBS) checks; and its explanation of “Greyball”, software that could be used to block regulators from gaining full access to the app.
Uber replied that the decision would put more than 40,000 licensed drivers out of work and that 3.5 million Londoners use the app. It said it would challenge the decision “immediately” in the courts and that an independent review had concluded that Greyball has never been used or considered in the UK for the purposes cited by TfL. The Mayor of London, Sadiq Khan, said he fully supports TfL’s decision and that all companies must play by the rules.
The appeal and what comes next
Under the London Private Hire Vehicles Act 1998, Uber can appeal within 21 days of being notified and can keep operating until all appeals have been exhausted. TfL will make no further comment while an appeal is pending.
The fit and proper test is not about a vehicle or a driver but about the conduct of the operating company: how it handles safety information, the checks on its drivers and its relationship with the regulator. It is an examination of the company as a whole.
Barcelona has a file of its own. The Court of Justice of the European Union (CJEU) has to decide, following a question referred to it by Commercial Court No 3 of Barcelona in a case brought by the taxi drivers’ association Elite Taxi against Uber Systems Spain over the UberPop service, whether Uber is a transport service or an information society service (Case C-434/15). On 11 May 2017 Advocate General Maciej Szpunar gave the opinion that the platform falls within the field of transport and can be required to obtain the licences and authorisations provided for by national law. His opinion does not bind the Court, and judgment has not yet been delivered.
What to review
For a company that uses ride-hailing platforms for its staff or clients in London, the service remains available while the appeal lasts, but it is worth having alternatives in case the situation changes and checking what travel policies and insurance say about journeys in third-party vehicles.
And for any business that depends on an administrative licence, the lesson is that the regulator looks at the conduct of the whole company, not only at compliance with formal requirements.
The licence is not lost on the day of the announcement, but when the appeals run out.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
