Uber begins a crucial court proceeding in London on Monday, hoping to successfully reverse last year’s suspension of its operating license by the city’s transportation authority, Transport for London. The case will be heard before the Westminster Magistrate’s Court, and is expected to last three to four days.
The outcome of this week’s hearing may not be conclusive. Several experts tell Wired UK that while Uber is unlikely to be outright banned in London, the appeals process could be dragged out for years, with Transport for London angling to extract as many concessions as possible from the company.
Uber, which continued operating in London during the appeal process, has already made significant efforts to reach a compromise with regulators, particularly on safety issues. Transport for London has already cut its list of concerns by more than half since September.
Nonetheless, Uber’s investors and management will be monitoring court proceedings closely, because the stakes are immense. According to the Financial Times, London’s 3.6 million users make the city Uber’s biggest European market. Moreover, at the time of last fall’s suspension, the Wall Street Journa l estimated that the city accounted for 5% of Uber’s total recurring user base. The market is also reportedly profitable, so a negative decision would immediately gouge even more red into the company’s blood-drenched balance sheet.
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But the real stakes are even bigger than that. Labor and commerce regulations in England are generally less stringent than in the rest of the E.U., but stricter than in the U.S. That makes this week’s hearing a potential bellwether for the regional future of the company, which under founding CEO Travis Kalanick seemed to take positive pleasure in bending or breaking the law. Both the U.K. And Europe are increasingly important after Uber’s departure from international markets including China and Southeast Asia.
That scofflaw legacy was central to London authorities’ initial decision to ban Uber. Transport for London declared the company “not fit and proper” to hold an operating license, citing weak driver background checks, the company’s failure to report crimes by its drivers, and its “Greyball” software, itself intended to stymie regulators.
Those embarrassments are now the burden of Dara Khosrowshahi, who replaced Kalanick as Uber’s CEO last year. Khrosrowshahi has made patching things up with London a major focus of his tenure so far, publicly pleading for compromise with regulators before taking initial steps to mollify them. So far, those steps have included creating more detailed driver profiles, building a 24-hour customer support hotline, and offering to share data with London city planners.
Even if its license is restored, Uber faces other serious hurdles in the U.K. And across Europe. Late last year, it lost an appeal in a U.K. Case denying its right to classify drivers as independent contractors. It has also faced continued scrutiny for elaborate corporate structures that have allowed it to minimize taxes both in the U.S. And around the world.
