Tech

Uber receives just a two-month London license with new safety conditions

Reuters with CNBC.com
A man checks his smartphone while standing among illuminated screens bearing the Uber logo.
Chris Ratcliffe | Bloomberg | Getty Images

Uber on Tuesday received only a two-month London operating license, failing to secure a maximum five-year term in a battle with the regulator which has previously stripped the app of its right to take rides.

Transport for London (TfL) rejected the Silicon Valley company's license renewal request in 2017 due to failings it said it found in its approach to reporting serious criminal offences and driver background checks, prompting legal action.

A judge in 2018 then granted Uber a probationary 15-month license, which expires on Sep. 25, after the firm had made several changes to its business model in London, its most important European market.

TfL said the new two-month license comes with "new conditions to ensure passenger safety" and it wanted more details from the company.

"Uber London Limited has been granted a two-month private hire operator license to allow for scrutiny of additional information that we are requesting ahead of consideration of any potential further licensing application," said a spokesman.

In an emailed statement, Jamie Heywood, Uber's regional general manager for northern and eastern Europe, told CNBC TfL recognized the company's "improved culture and governance," adding that Uber would continue working closely with the transport authority.

"Over the past two years, we've launched a range of new safety features in the app, introduced better protections for drivers and our Clean Air Plan is helping to tackle air pollution," he said. "We will keep listening, learning and improving to provide the best service while being a trusted partner to London."

The 2017 license loss came just weeks after Chief Executive Dara Khosrowshahi took over and became a test of his ability to assuage regulator concerns as the app faced disputes with rival firms and the authorities in different markets.

Drivers of the city's traditional black taxis have lobbied hard against a license renewal, having long cited safety issues, working standards and the undercutting of their business model.

Uber says its roughly 45,000 drivers in the city enjoy the flexibility of their work and that it has taken several steps to improve safety for its passengers.

The new conditions set by TfL cover ride-sharing, appropriate insurance and driver document checks by Uber.

Uber received a five-year license in 2012 but fellow ride-hailing service Ola gained just a 15-month right to operate earlier this year, in a possible sign that the regulator wants to have more power over new entrants.

Mayor Sadiq Khan, who is also the chairman of TfL, has long been critical of Uber, telling LBC radio last month that they need to play by the rules.

"You will know my track record which is standing up to the big boys, and they are boys, and make sure everyone plays by the rules," he told listeners to a phone-in. "I don't care how many lawyers you employ or how big your PR budget."