Uber Crashes Into UK Regulators, Loses London License

Uber's UK business hit a surprise roadblock Friday after authorities in London said it would no longer be allowed to provide services in the UK capital because it was "not fit and proper to hold a private hire operator license."

Uber's existing license is due to expire on September 30, but the company has said it will appeal against the decision. It will be allowed to continue operating in London while that appeals process runs its course.

Besides blowing a hole in Uber's business, the ruling could have ramifications for thousands of drivers who work for the company as well as the millions of Londoners who have come to rely on its services.

Often cited as an example of the impact that digitalization is having on traditional industries, Uber is known internationally for its ride-hailing app technology, which connects smartphone users needing transport with drivers of privately owned vehicles.

The company is often described as the world's largest taxi firm, even though it owns no vehicles and counts none of its drivers as full-time employees.

Today's decision by Transport for London (TfL) is the latest setback for Uber, whose reputation has taken a series of knocks in the past few months.

Co-founder Travis Kalanick was recently forced to quit as CEO following allegations of sexism, reports that Uber had tried to mislead regulatory authorities and charges that it stole intellectual property from Google.

In a statement, TfL said that: "Uber's approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications."

The London transport authority reckons Uber has fallen short of requirements when it comes to reporting serious criminal offences and complying with healthcare regulations.

It also expressed concern about Uber's Greyball software -- the same issue that has already landed Uber in trouble with regulatory authorities in the US, Uber's domestic market.

TfL fears that Greyball could be used to prevent regulatory authorities from gaining full access to the Uber app, with consequences for officials trying to carry out "law enforcement duties."

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The UK move comes after the European Court of Justice said in May that Uber should be regulated as a transport company and not a technology one. It has already been forced to cease operations in European markets including Denmark and Hungary because of regulatory hostility.

Uber has lashed out at UK authorities in comments widely reported in the mainstream press.

"Far from being open, London is closed to innovative companies," it is reported to have said in a statement. "3.5 million Londoners who use our app, and more than 40,000 licensed drivers who rely on Uber to make a living, will be astounded by this decision … We intend to immediately challenge this in the courts."

While consumers and Uber drivers will be aghast, London's mini-cab drivers, who have lobbied aggressively against the Internet company, will be delighted at today's regulatory decision.

— Iain Morris, News Editor, Light Reading