Plan Insurance Blog

Why would Uber only appeal for an 18 month licence?

In only a few days time, on the 25th June, Uber will be – once again – facing the Judges, this time in their appeal to get their London Licence renewed. In a surprise move, though, they applied for an 18 month licence last month, on the grounds that they wish to prove continuous improvement and monitoring… What can we expect to happen next week when the controversial ride hailing app faces TfL and the Court?

Where does Uber stand at present?

In the midst of all these troubles, though, they are still on the roads of the capital, and have announced a number of measures aimed at trying to solve some of the problems relating to their application. In February they introduced a new system connected to cross border hiring issues. Then in May, they announced that they would start sharing their data with TfL, and then offered a form of sick pay package to their European drivers. They also started reporting serious incidents to the Met Police, and introduced a 24/7 helpline for customers. They have also dropped their opposition to the English Language test for drivers.

On the 17th June, Uber also announced some incentives for their drivers to go purely electric in certain cities in the US and Canada – surely it is only a matter of time before they offer a similar scheme here and play up to TfL’s need to reduce “emissions”.

They certainly are on a massive charm offensive here, with their PR teams tackling the issues one after the other, an extensive advertising campaign running and even a documentary narrated by Dawn French.

At the beginning of the month, though, the website OpenDemocracy released allegations that the Evening Standard had offered 6 large companies (including Uber and Google), a package to costing £500,000 that would provide them with positive coverage over a number of months. While the paper has denied the allegations, they haven’t yet instigated legal proceedings against Open Democracy. It isn’t the first time that the paper’s editorial credibility in regards to Uber has been called question. The previous time being when Uber lost their licence in London and their editor, former British Chancellor of the Exchequer George Osborne, wrote an editorial criticizing the decision. He is also on the payroll of the fund management company Black Rock, who happen to be one of Uber’s major investors.

18 Months Extension in London

The company hinted that they may seek an extension back in April this year. However, it was only on the 31st May that they formally applied. The timing seems a little questionable, as it happened just a day after the high court delivered its ruling on TfLs Operators Fee Proposal. While Uber argues that this 18 month period is the most adequate timeframe to show they are making positive changes to the way they operate, one can only wonder why the decision came on that day. Had the Court found against TfL, a 5 years licence would have been much cheaper for them. So, the outcome on the new fee structure court case came with a £2.9m price tag for the American firm. Perhaps the timing of the application could raise a few questions about the way the business is structured? We must bear in mind that, with TfL’s new structure, if an operator’s vehicle numbers go up or down a tier within the 5 year period, they must update their licence. So, does Uber intend to change the number of cars they license drastically within the next five years?

What Happens on the 25th June?

The 25th June is the date of Uber’s appeal in London. We foresee three obvious options:

  • Uber’s licence to be revoked indefinitely – leading potentially to thousands of drivers out of a job or seeking alternative roles with Uber’s competitors or minicab firms;
  • Uber’s 18 month extension to be granted – raising the question: how much will they pay and can other companies from a similar, shorter application?
  • Uber’s licence renewed for five years – this would certainly need some guaranties that the concerns that formed the base of TfL’s initial decision will be addressed immediately.

Either way, the decision will certainly provoke a strong reaction from within the taxi and private hire industries, because there will be consequences. Whether it be large numbers of jobless PH drivers flooding the market, new hail-riding apps scrambling to feel the void, mini cab firms upscaling quickly, or Black Cab drivers protesting about unfair practices.