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How Uber Stalled in London

Dan Kitwood/Getty Images
A London black-cab taxi driver at a protest against Uber, London, February 10, 2016

On September 22, Uber, the app-based ride-hailing company, hit a major roadblock in Britain. Transport for London, the capital’s main transportation agency, which regulates the taxi cab industry, refused to renew the license that allowed Uber to operate in the metropolitan area. In a statement, TfL said that Uber demonstrates “a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications.” These included the company’s approach to reporting serious criminal offenses, its use of Greyball technology that could, in theory, prevent regulators from gaining access to the Uber app, and the company’s method of acquiring drivers’ medical papers and criminal-record checks.

Uber is appealing the TfL decision—as well it might, since a ban in London represents a major setback for the company’s expansion in Europe. Already, Uber operates in twenty-one European Union states and, according to the firm, it has more than 120,000 active drivers in the region. But other European regulators, as well as employment courts, are moving against Uber. Italy has banned use of the company’s app; Spain has barred Uber entirely. In Denmark and Hungary, Uber has withdrawn service in the face of legislation placing restrictions on taxi drivers that Uber was unable to meet—Denmark, for instance, passed a law requiring taxis to be equipped with fare meters. Nor are Uber’s difficulties with licensing authorities limited to Europe, despite the stereotypes of strict European regulation. In the United States, Uber suspended operations in Austin, Texas, last year over criminal-record checks; and the company recently settled a lawsuit in California for $20 million after the Federal Trade Commission sued the company over misleading claims about how much drivers could earn.  

Until London’s regulatory pushback, Uber had thrived in Britain. The interests of the public, as consumers, were understood to be intrinsically bound together with those of this Silicon Valley disrupter in a struggle against restrictive business practices. Uber’s media cheerleaders have portrayed the company as a liberator in a battle of innovators in opposition to vested interests, tech-savvy creatives against stolid bureaucrats, the future versus the past. In the words of a columnist for The Spectator magazine, TfL’s decision to ban Uber represented a “pitiful howl against a changing economy.”

Yet the past now appears to be exacting its revenge. Or, to be more precise, the future may not look as laissez faire as Uber’s champions would have us believe.

For about three months this year, I drove an Uber taxi in London (as research for a book about the company). My entry into this world of casual employment was greeted by reams of pseudo-emancipatory rhetoric about my “autonomy,” “being my own boss,” and how I would be turning my car into a “money machine.”

Of course, the Uber driver soon discovers just how flimsy are the foundations on which these euphemisms rest. During my “onboarding” session, a brief classroom training for new drivers, an Uber employee informed me that as a driver I could not “pick and choose” which jobs I accepted. At the end of a typical week, I took home only a little more than the minimum wage of £7.50 an hour, and that was before deducting the inevitable expenses or loss of earnings that would result from illness or time off. I also learned that Uber would closely monitor my customer satisfaction rating. If it went too low, Uber would temporarily ban me from using the app.

None of these conditions would be particularly unusual in regular salaried employment. But Uber purports to simply facilitate the rider’s relationship with the taxi driver who provides the transportation. As our onboarding instructor put it, “Uber is a technology app, it’s not a private-hire company.” This is how the company attempts to distinguish itself from the private-hire companies whose so-called minicabs make up more than 75 percent of licensed taxis in London. But all taxis and taxi operators that are not black cabs—which are subject to more stringent licensing and regulation—need a private-hire operator’s license to work in London, including Uber. And Uber had one, until September 22.

Yet Uber is, in some respects, an improvement on what existed before. Many of my fellow Uber drivers had previously had a torrid time working for traditional minicab firms. All but one of those I met were first-generation migrants to the UK, and most had—initially, at least—seen Uber as a welcome opportunity. Some had indeed joined Uber precisely to escape traditional minicab companies’ penurious rates of pay and tyrannical human controllers, who assign rides to drivers and are often notorious for their favoritism. If nothing else, Uber’s algorithm was not going to prevent you from earning enough to eat because it didn’t like your face.

One unfortunate consequence of TfL’s ruling is that it will penalize a great many drivers from immigrant backgrounds who have not only been underpaid and discriminated against by private-hire companies, but have also been de facto excluded from London’s tight-knit black-cab industry. Uber’s own data suggests that around a third of its drivers in London come from neighborhoods with unemployment rates of more than 10 percent. Out on the road, the Uber driver already sits at the bottom of the pecking order. Black-cab drivers occasionally curse you and call you “a scab.” The Licensed Taxi Drivers Association, the trade body representing the capital’s black-cab drivers, has 11,000 members and considerable lobbying power with the mayor of London, Sadiq Khan, and TfL, whereas Uber drivers are represented mainly by the much smaller Independent Workers Union of Great Britain.

The trying experiences of drivers in the less regulated minicab industry point to a contradiction in the TfL decision: it’s not as though standards were exemplary before Uber arrived on the scene. Many cab companies, mostly small, independent operators, ran for years with similar employment practices to Uber. As James Farrar, head of the private-hire drivers’ branch of the IWGB union, told me when I spoke to him a few months ago, “This was a rotten trade before Uber ever came along and we mustn’t lose sight of that.… We need to clean up the whole trade.” With its innovative app and greater capacity to invest, Uber is simply better at doing what many traditional firms did. And by taking human controllers out of the game, Uber has arguably created more equality of opportunity among drivers.

During my onboarding session, Uber warned us that topics such as politics, religion, and sport were off limits for conversation with customers in our cars. (As anyone who has ridden in one of London’s black-cab taxis will know, their drivers observe no such restraint.) Yet last month, Uber made a U-turn of sorts. On the day of the TfL decision, I received an email from the company to all Uber drivers encouraging us to ask our passengers to sign Uber’s petition against the ban. Uber wanted its drivers to talk politics, after all.

By the end of that week, more than half a million people had signed. Uber is skilled at mobilizing popular support, at least from its customer base, but it can now also call on the large constituency of its laid-off workforce: the company’s tens of thousands of drivers, many of whom are stuck with eye-watering finance deals for leased cars.  

That Uber has become a whipping boy for the wider “gig economy” may in part explain the mayor’s support for TfL’s decision to withhold the company’s license, thereby making an example of the company. This is less a case of the regulator stepping up—it is, after all, TfL that carries out the safety checks and issues licenses to Uber drivers—and more an instance of it caving in to the powerful black-cab lobby. Last year, the Licensed Taxi Drivers Association launched an inflammatory poster campaign implying that passengers were at risk of being raped by an Uber driver. It is hard to get away from the feeling that Uber has also been singled out thanks to the scaremongering directed at its predominantly immigrant drivers.

The Times reported recently that 43 percent of Londoners questioned said the mayor of London was right to back the TfL decision to ban Uber; only 20 percent disagreed. Even if Uber were successful in its appeal against the TfL ruling, it still faces the prospect of an employment tribunal that may uphold the right of Uber drivers to claim holiday pay and a minimum wage. In that case, the company could extricate itself from TfL’s regulatory labyrinth only to be slapped with an enormous bill for drivers’ backdated claims.

The story of Uber in London was, in one telling, a story of bootstrapping entrepreneurship by some of the most marginalized workers in one of the wealthiest cities in the world. “They [are] immigrants,” Aman, an Uber driver originally from Eritrea, told me. “They were exploited before, as well, in their other jobs.” But many of his friends drove for the company, he said, because they “don’t really have any options.” The window of opportunity Uber provided may now be closed for good. If anything has undone Uber, it is the hubris of its claim to be a vehicle for freedom and prosperity—when, in fact, it only made more visible the precariousness of casual employment in Britain’s poorly regulated labor market. For that, it has been punished.