Flanked by Its Drivers, Uber Girds for a Battle in London Courts
(Bloomberg) -- In a TV ad currently airing in the U.K., a young woman leaves a bar alone and prepares to step into an Uber. “I know his license number and he's made 3,000 trips and speaks four languages,” she says to the camera. “He'll probably make me laugh and he'll be here in one minute.”
The global ride-sharing juggernaut Uber Inc. wants the citizens of one of its largest markets to know that its service is safe for riders and lucrative for drivers. But this week, its fate is in the hands of much smaller audience: a judge at Westminster Magistrates' Court in central London.
Uber’s long-awaited hearing in a U.K. court began Monday, where it’s arguing it’s “fit and proper” to hold a license in the English capital, after the city’s transit authority, Transport for London, said last September that it wasn’t, and refused to extend its operating permit.
As proceedings began, Uber found that TfL’s stance on the company’s license had softened in the intervening months. A lawyer for the company, Thomas de la Mare, said Monday that the regulator’s position has “moved to one of effective neutrality.” A fight from TfL over the appeal looks unlikely.
The September decision sent shockwaves through the offices of businesses, city regulators, lawyers, employment unions, and media outlets worldwide. Dara Khosrowshahi was just weeks into his new role as Uber’s chief executive officer when, following the license revelations, he flew to London and started the process of undoing what many onlookers saw as years of poor behavior on his company’s part.
Since then, Uber has been making efforts to appease the regulator, as well as concerned drivers, and the public at large. TfL’s list of concerns with Uber has more than halved to 11 from 25 after it committed to governance changes and apologized for setting up controversial software, a lawyer for the ride-hailing app said at a hearing in May.
But amid the storm of global debate about the legality of Uber and other internet-enabled transportation services, the company has one large and vocal group of advocates, at least in London: the drivers themselves.
Over the course of several weeks of journeys in and around London, drivers have told Bloomberg that the threat of a license revocation is just the latest in a string of worries they’ve had over the past two years. But almost all still defiantly support Uber and the flexibility it offers them. They’ve built their own support networks using Facebook Inc. and its WhatsApp messaging app. Some have even shunned offers to ditch the San Francisco-based company for rival apps, despite offers of more money.
“Before this we had the Brexit news,” said Eduardo Scardua, a Brazilian national who’s driven for Uber for about three years. “That was a disaster. I was very worried. I’ve lived in London for 14 years and only after I signed up with Uber could I afford to pay for a comfortable house for my family. If they lose the license, I’ll have to go back and share a house with people I don’t know.”
He said friends tell him they’re surprised he still works for Uber because of the risk it might lose its license. But Scardua, once a driver for a package delivery company, remains loyal to Uber because of the balance of flexibility and competitive pay. “It would be devastating for me and my family to be without Uber because right now I have the time to be with my daughter.”
Scardua’s sentiments were echoed by many other drivers speaking to Bloomberg, some of whom held lucrative day jobs but liked being able to pull in some money for vacations by driving in the evenings. Others described themselves as “family men,” able to support a working partner by earning in their Uber vehicle when childcare was available, or spending time at home with their children when it wasn’t.
"I've got four children,” said one driver, Afruz Miah, who believed there was no point leaving Uber for a competitor because “what's happening to Uber will happen to the other company too.”
Other Uber workers were pragmatists who saw it as an imperfect option, but the best available. Among their complaints were tales of difficulties accessing support from the company when incidents took place, the company's commission charges, the high cost of car rental, and trips automatically being canceled — something they blamed on glitches with the app. But most said they preferred Uber to their previous jobs, which often involved long and tiring shifts in restaurants, as package couriers, or as long-distance truck drivers.
Since September, Uber has created 24-hour telephone support hotlines, promised better contact with police and pledged to report any “serious incidents” that occur during a passenger’s journey, and now shares drivers’ license details with riders. It also began imposing limits on the number of hours workers could log before being required to take a break. More recently it announced it would offer financial insurance packages to drivers that cover loss of earnings due to sickness, injury, and other reasons.
But the so-called “gig economy” in which Uber’s drivers work hit another setback in June. The U.K.’s top judges ruled that Pimlico Plumbers Ltd. should’ve treated one of its tradesmen as a “worker,” giving the plumber the right to vacation pay and to sue the company in a decision that could have ramifications for other gig economy lawsuits. In November, Uber lost an appeal over whether it should pay overtime and give vacation time to its drivers.
The legal processes TfL and Uber are involved in mean even if the outcome of the June 25 hearing is unfavorable to the ride-hailing company, it isn’t likely to be removed from London’s streets any time soon — English law allows it to continue operating at least for the next stage in any challenge over the decision. The case could potentially go all the way to the Supreme Court, and Mayor of London Sadiq Khan said in November that the process could take years.
A TfL spokesman said it couldn't comment on Uber’s licensing case while it was ongoing, and a spokesman for Uber in the U.K. declined to comment.
While the endless legal drama means they may not have to consider alternate employment anytime soon, some drivers have started to ponder it. Many said they would return to the local private-hire companies they used to work at. Others said they’d appeal to the government for support.
Joining London’s iconic fleet of black cabs offers little attraction to most. One Uber driver, who didn’t wish to be named, said that more money could be made driving a black cab. But the London transport regulator’s famous “Knowledge” tests are too grueling to consider — and simply unnecessary in the age of GPS, he said.
The economic impact on London’s cabbies has been significant in some cases, too. One Uber driver, who also didn’t wish to be named, said a friend who used to earn about 70,000 pounds ($92,841) a year driving a black cab now earns closer to 50,000 pounds. According to data compiled by TfL, the number of London’s iconic black cabs has also fallen to 21,026, the lowest since at least 2009, the earliest year for which data is available.
Orhan Mezin, who worked for a private-hire minicab firm for about five years before moving to Uber, said “old friends and bosses keep telling me to come back.” But for many drivers, “coming back” to the minicab business is no longer an easy option. The number of such firms operating in the U.K. capital has fallen every year for the past six, with 2,373 remaining open last year, according to data compiled by TfL. That’s a 25 percent drop since 2012, the year Uber arrived in London.
With no news on whether Uber’s U.S. competitor Lyft Inc. is any closer on opening for business in London, almost every driver that spoke to Bloomberg talked about what they see as the only realistic alternative to Uber: ViaVan.
A joint venture between U.S. startup Via Transportation Inc. and Daimler AG’s Mercedes-Benz Vans, ViaVan debuted in New York in 2013. Users request a shared ride through an app, and an algorithm finds a suitable vehicle headed in the same direction, reducing detours, and allowing multiple people to share a vehicle. It began offering its service in Amsterdam in March this year, and a London launch followed in April.
With a private hire license already under their arms, a vehicle in their driveway, no need for TfL’s “Knowledge,” and potentially millions of passenger journeys to scoop up without Uber on the scene, many drivers said ViaVan is the right service launching at the right time. Nearly all of the Uber drivers who agreed to speak to Bloomberg said they’d either signed up to ViaVan, were considering it, or know someone who already had.
Without a direct competitor such as Lyft, and minicab work that would cost drivers the flexibility they’ve come to build their lives around, ViaVan looks to some like the quiet savior ready in the event that Uber’s 45,000 active London drivers find themselves too nervous to stay as loyal as they want to.
©2018 Bloomberg L.P.