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Uber Controversies and their Operator Licence Renewal

Uber Controversies and their Operator Licence Renewal

Posted by Grant Georgiades on June 5, 2017.

TfL have renewed Uber’s private hire operator licence but only for an interim period. A licence of four months has been granted by London’s transport regulator instead of the usual 5 year term.

Many believe the short-term nature of the licence is effectively a “stay of execution” whilst the authorities decide whether to allow a full term renewal. The American firm have been embroiled in a string of controversies since May 2012 when they began trading as Uber London Limited.

Both the London Taxi Drivers Association (LTDA) and the Professional Drivers’ Branch of the GMB Union have threatened further legal action should TfL award a new licence.

 

The LTDA’s Objections

In March 2017, Black Cab drivers’ union the LTDA instructed solicitors Michael Demidecki & Co to write to TfL to outline their reasons why they believe the company’s application should be declined. The main basis of their argument is that “Uber’s model requires” for drivers to “unlawfully ply for hire”. The letter states that Uber operates under a “pretence” that it is complying “with the PHV legislation.” Doing so undermines the existing “two-tier system” and “causes unacceptable public nuisance and risks to public safety.”

To read the letter in full please click the pdf below.

PDF: LTDA-V-TfL-initial-letter-23rd-March-17

 

Uber Licencing Costs Massively Rise

Another possibility for the delay is TfL’s ongoing consultation into Operator Licence Fees. The regulator recently revealed that large private hire firms have had their enforcement costs subsidised by £500,000 a year.

It is estimated that the new licensing fee proposals could result in Uber’s licensing costs jumping from just under £3,000 to around the £2 million mark (depending on the number of drivers actually registered to their fleet.)

The consultation runs until June 16th. Until the outcome is determined, TfL announced that they will be “considering, on a case-by-case basis, whether private hire operator licences of a shorter duration should be issued.”

 

Contact Papers with pen

Uber UK Controversies – Why Wouldn’t Uber Have its Licence Renewed?

In the 5 years since their app-based model gained licensing approval, Uber have certainly been in the spotlight. We’ll have to wait until September to learn of TfL’s decision on their long term fate.

In the mean time, we’ve summarised below a number of high profile disputes, disruptions, clashes and controversies that the “tech firm” have been involved in since launching in the UK:

 

Metering

To the surprise of nearly the whole taxi trade, back in October 2015, the High Court found in Uber’s favour when it determined their drivers’ use of a mobile phone did not constitute a taximeter. Lord Justice Ouseley’s verdict said that, while the smartphone is essential for the calculation of fares, it did not make it a device “for” calculating fares, which would breach the taximeter prohibition. Outrage at the decision led to several large scale protests across the Capital by Black Cab drivers.

 

Political Scandal

Uber have been implicated in a controversial story in which former Prime Minister David Cameron and Treasurer at the time George Osborne allegedly instructed aides to lobby Ex London Mayor Boris Johnson against imposing restriction on Uber.

Rachel Whetstone, who has subsequently resigned as a senior vice-president at Uber, is known to be a personal friend of both Mr Cameron and Mr Osborne. Caroline Pidgeon, the Liberal Democrat chairman of the London Assembly’s transport committee described the episode as a “blatant cover-up by 10 Downing Street” which “must now lead to a formal inquiry.” Mr Osbourne has since acquired a £650,000 a year job working for one of Uber’s major investors.

 

Congestion

The Black Cab trade accuse Uber’s 25,000 plus drivers of bringing London to a stand-still. By using the app’s technology to effectively ply for hire, they congregate in densely populated areas and await a job. It’s alleged that this contributes to traffic on the Capital’s roads moving slower than a horse and cart.

 

Tax avoidance

The Good Law Project is suing Uber over the issue of VAT avoidance. The law firm thinks “Uber is undercharging VAT on the taxi services it offers. And we don’t have confidence that the tax man will collect that avoided tax. So we plan to sue Uber ourselves”.

Director at the company Jo Maugham QC wants,

“To understand whether HMRC treats these big US multinationals including Uber with kid gloves. Uber undoubtedly has arranged its business model to minimise its tax liability, to dodge taxes if you like, and to minimise the workers’ rights that it has to offer to its drivers.”

40,000 drivers work for Uber across Britain. Accounts filed with Companies House in 2015 showed it charged over £115 million in fares that year alone. If VAT at 20 per cent had been applied on top of this, then £23 million in revenue would be due to HMRC.

 

Employee’s Rights

A landmark employment tribunal in September 2016 found in favour of two Uber drivers. The outcome determine that the drivers are not self-employed and should potentially be entitled to sick pay as well as other employee benefits. Judges in the case were damning in regard to Uber’s counter arguments. The firm was accused of “resorting in its documentation to fictions, twisted language and even brand new terminology”.

 

Public Safety Concerns

The Daily Mail article in March of this year alleged that Police figures show that rape or assault claims were being made about Uber’s London drivers at a rate of one every 11 days. Though many within the Black Cab trade would also point to the popular Twitter hashtag #Ubered as a sign of poor driving standards. The accusation is that inexperienced, distracted drivers working for the app-based company via a sat-nav pose a serious danger to the general public.

 

Phone Line

Uber were defeated in March this year in a long running dispute over whether they should have a landline for passengers to contact them on.  The American firm argued that its app-based system removed the need for it to operate a call centre. However, a court ruling recognised a requirement for passengers to be able to reach a private hire company should an emergency arise.

 

Insurance

Back in June 2015, an investigation by The Guardian newspaper revealed that an Uber driver could collect a customer despite having uploaded fake insurance paperwork via its computerised system. The exposé led to Uber having to review its compliance systems as serious questions were raised regarding “the robustness of its approval procedures for driver documents”.

Uber subsequently defeated in court a TfL’s measure designed to try and tackle the ongoing issue of drivers operating without adequate insurance. TfL had insisted that drivers have private hire insurance in place for the entire duration of the vehicle’s PH licence but a judge ruled this was not legally enforceable.

 

Cross Border Hiring

The public and private hire industries are up in arms about the ability provided to drivers who are licensed in one area of the country to operate in another area via the Uber app. This in the trade is known as cross border hiring.

Not only does this practice lead to problems with supply and demand, with quieter areas of the country potentially being neglected, there are also issues relating to public safety. Often, drivers will be travelling long distances to work in a busier region for a weekend. They might have no accommodation and will possibly work extended hours as a result.

Also, drivers that have had their private hire licences revoked by one local council have been found to be operating in the same area but for Uber under a licence issued by TfL.

 

Operator Licence Renewal & Uber Controversies – Sources

Meet the Author Grant Georgiades

Marketing Mastermind with a love of dark chocolate, Grant is the youngest of the 3 Georgiades brothers. His industry experience is applied to writing blogs on all manner of topics….. but don’t ask him anything about engines.

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