Plan Insurance Blog

TfL Ban Uber Rival – Deeming App “Not Fit and Proper”

We recently discussed how Uber is under attack from an unscrupulous new rival. Though the American App firm have received some good news on the competitor front in the form of app operator OLA having their licence revoked and are banned from operating in London.

Transport for London (TfL) have banned the firm over ‘public safety’ failings. The India owned operator only launched in London in February. They now face a lengthy appeal process and potential court battles against the private hire regulator’s decision if they wish to continue trading there.

Ola’s media releases state that they have carried out more than 1bn trips for passengers around the world. They boast of 25,000 drivers using its platform in London and are also licensed to operate in a number of additional UK cities. However, London is by far the largest UK market for private hire. Economics would appear to dictate that any international firm with aspirations of making significant gains into Uber’s market share would need to have a presence in the capital.

Only months ago the firm released details of a partnership with its ride-hailing competitor Gett. The intention being to offer Gett’s  more corporate clientele access to Ola’s service in the Capital.  Ola’s UK managing director, Marc Rozendal, outlined the company’s lofty goals, “Partnering with Gett and its leading offering for corporates opens a large market for Ola’s platform as travel begins to resume in London, allowing us to further scale by meeting the clear demand from corporate users for consumer ride-hailing.”

Though those high ambitions will have to take a back seat as Ola is accused by TfL of not notifying them of operational failings. The regulator told media outlets that they include “breaches of its regime which led to unlicensed drivers and vehicles undertaking more than 1,000 passenger trips on the platform’s behalf.”

TfL is understood to have informed OLA last week that it was not “fit and proper” to hold a private hire operator’s licence. Ola, has serious financial clout in the form of the Japanese tech giant SoftBank’s Vision Fund. Therefore you would think cost implications of the legal process would not be a dissuasive factor in their decision whether to appeal or not. The company have 21 days to appeal against TfL’s decision.

Ola will be pinning their hopes on the successful legal challenge mounted by their American competitor. Uber were granted a renewed operator licence, despite similar regulatory breaches, following a High Court’s decision to take into account the improved operational processes that the company had put in place following the original decision to reject their license renewal. In the judge’s opinion, the new safeguarding systems provided satisfactory protection for the public. Ola states that it has been at the forefront of public safety in the industry and has delivered hygienic improvements during the current pandemic, such as mandatory cleaning and disinfecting of vehicles by drivers in between journeys.  However, they will no doubt have to demonstrate further safeguarding innovations to satisfy the courts that their appeal is warranted.

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