How Uber's Tumultuous History in London Resulted in It Being Banned
Transport for London, the city’s transportation authority, on Friday effectively banned Uber in the capital after determining that Uber London Limited “is not fit and proper to hold a private hire operator license.” It was a stunning decision (one that Uber plans to appeal) and the latest twist in what’s been an especially rocky road even for the startup used to clashing with municipal authorities. Here’s a brief look at Uber’s history in London that led up to Friday’s shocking news.
July 2012: Uber launches operations in London, just before the city hosts the Summer Olympic Games. At a time when the U.K. is still recovering from the Great Recession, it is welcomed as a job-creator and as a way of letting people get more out of their squeezed incomes. “London is the gold standard,” CEO Travis Kalanick tells Gigaom at the time—a market it needed to crack or else give up pretensions of remaking the taxi business worldwide.
July 2013: Uber launches its premium UberX service, a development that will upend not only the black cab business, but also that of Addison Lee, an upmarket minicab service owned by private equity group Carlyle.
June 2014: Black cabs stage the first of a number of protests against Uber that bring central London to a standstill. Downloads of the Uber app spike by 850% as Uber scores a PR victory against what Kalanick called an “asshole named Taxi.”
December 2014: The London Assembly concludes that Transport for London’s policing of the private hire industry (not just Uber) is “not fit for purpose” and “woefully inadequate.”
Read More: Uber Just Lost Its License in London
May 2015: Uber hires Rachel Whetstone, a close friend of Prime Minister David Cameron and godmother to his late son, to head its public policy and communications unit in London. By now, Uber is attracting hundreds of new drivers every week with generous incentives.
July 2015: The London Private Hire Car Association calls on the European Union to investigate Uber’s tax practices. The company routes almost all of its international payments through the Netherlands, which means it pays no U.K. tax on the fees it receives through U.K. drivers. The Netherlands office operates a licensing deal with another offshore affiliate that protects almost all of its income from taxation (to find out how, read this).
August 2015: Within two years of launching, Uber has 15,000 drivers on the roads on London. Kalanick says he expects 42,000 by 2016, a figure he will miss by about 25%.
November 2015: Boris Johnson, then mayor of London, complains that David Cameron’s government is obstructing his plans for a cap on new licenses because it’s “absolutely besotted” by “Californian tech titans.” Johnson had complained that the burgeoning number of Uber drivers had led to traffic congestion, pollution and illegal parking throughout the city. Johnson’s efforts to regulate Uber more tightly are frustrated by Cameron and his then Treasury chief, George Osborne.
December 2015: Ten Uber drivers take the company to an employment tribunal, protesting against their treatment. They allege that they earn less than the minimum wage.
May 2016: Sadiq Khan, of the Labour Party, succeeds the Conservatives’ Boris Johnson as mayor of London. Carlyle, the owner of Addison Lee, forces its drivers to accept pay cuts as it tries to stay competitive with Uber.
September 2016: Khan proposes new rules for cab drivers including tougher driving tests and, controversially, an English-language test. The latter is seen as clamping down on Uber, which draws its drivers largely from immigrant communities, as opposed to the native Londoners who drive most of the fleet of black cabs. He also orders Uber drivers to obtain commercial auto insurance, a large operating cost that many had been avoiding.
October 2016: The U.K. High Court finds for the drivers in the employment tribunal case, saying they’re entitled to the minimum wage and statutory paid holiday. It pours scorn on Uber’s tortuous definition of itself as a technology company: “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous,” Judge Anthony Nelson wrote in the ruling.
June 2017 : A crowd-funded lawsuit claims that Uber should be collecting tax. At the time, Reuters estimated that Uber’s 40,000 U.K. drivers were generating over 1 billion pounds a year ($1.35 billion), indicating that it was avoiding up to 40 million pounds a year in VAT. In the same month, a shareholder revolt forces Kalanick to step down as CEO.
July 2017: The U.K. government releases a report into working practices in the gig economy: it calls for the creation of a new employment status to reflect the gig economy’s growth, including greater protection for people such as Uber drivers.
August 2017: After a lengthy and public search, Uber selects Dara Khosrowshahi, the CEO of travel site Expedia, as its new CEO.
September 2017: Early in the month, Transport for London bans Taxify, a rival app to Uber backed by China’s Didi Chuxing, only three days after it announces plans to start operating in London, thwarting its attempt to piggy-back on the license of a partner company. In mid-September, TfL says it will raise the cost of Uber’s license to 3 million pounds to reflect its scale and the increased cost of policing the sector. The number of private drivers in London has d0ubled to 116,000 in the five years since Uber launched. Finally on Friday, TfL says it won’t renew Uber’s license when it expires at the end of the month, saying the company is not a “fit and proper” owner and accusing it of inadequate background checks, failing to report criminal incidents to the police and using its ‘Greyball’ software to stop regulators from policing it effectively. The company says it will appeal the ruling.