Uber UK recently won its most significant battle in the European market after a judge handed back its license to operate in London.
According to the deputy chief magistrate Tan Ikram, Uber had done enough to satisfy the court that it was now “fit and proper” to hold a permit, despite its “historical failings.”
Those failings included safety concerns over account sharing, where drivers used the same account and car – meaning a person that picked up a passenger may not necessarily have matched the individual listed on the app.
Magistrate said he considered Uber’s efforts to improve oversight and tighten the identity checks. He said he did not find any evidence of a “cover-up” of the driver photo fraud problem.
“Uber doesn’t have a perfect record, but it has an improving picture,” Ikram said. “I am satisfied that they are doing what a reasonable business in their sector could be expected to do, perhaps even more.”
Bumpy Roads Ahead
Although Uber UK won the license case, the aggregated cab company has a long road to celebrate. In coming months, the company will need to face issues, including a lawsuit in its home state of California that could give drivers expanded employment rights – a move that could wreck its gig-economy business model.
On the one hand, it has to wait for the ruling from the UK Supreme Court over drivers’ worker rights, which will be given by October. On the other hand, outside the court, it is fighting to gain profit from its business model.
Uber posted a $1.8bn (£1.4bn) loss in the latest quarter as revenues dropped 29pc and ride bookings plummeted by 73pc because millions of people stayed home amid the pandemic.
This is certainly raising doubts of the company becoming profitable by 2021 because its share price has collapsed by 50pc since March.
However, the recent developments on winning back the license have given some sort of positivity.
“Right now this victory is pretty irrelevant because Uber is no longer a ride-hailing company, but a food delivery company and the short-term performance will be all about that,” says Richard Windsor, founder of research group Radio Free Mobile.
“We will need a vaccine to ride-hailing to come back to what it was. Hence until then it’s a food delivery company and will be judged on that basis.”
The recent ruling may hold some issues for the company in the coming months. The 18-month licence Uber received is relatively shorter than the five-year permit.
Moreover, TfL’s lawyer Marie Demetriou said it “considers it important to retain a close eye on Uber” given “the serious historical breaches.”
Other cab companies are not in favour of this ruling for Uber. Unite, which represents nearly 1,000 taxi cab drivers in the capital, described the order as “a sad day for the travelling public in London and another blow to the taxi drivers in the capital.”
Furthermore, Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, which represents some of the city’s black-cab drivers, called the ruling a “disaster for London.”