LONDON — Uber scored an important victory on Monday when a judge restored the company’s transportation license in London, one of its most important global markets, where regulators had threatened to ban its cars from the road over safety concerns.
A deputy chief magistrate, Tan Ikram, said Uber had met a “fit and proper” standard to receive a license. A ban would have been a major blow for the company whose ride-hailing service helped remake urban transportation but now faces growing financial and regulatory challenges around the globe. In London, Uber has 45,000 drivers on the road and provides millions of rides each month.
Uber “does not have a perfect record, but it has been an improving picture,” Mr. Ikram said in his decision. “I am satisfied that they are doing what a reasonable business in their sector could be expected to do, perhaps even more.”
Over the past three years, Uber has had its London operating license pulled twice over safety concerns, only to be allowed to continue operating during appeals.
The latest case dates from November 2019, when Transport for London, the city’s transportation regulator, revoked Uber’s taxi license after saying it did not meet a “fit and proper” standard needed to hold a taxi license. The authorities cited Uber’s pattern of misbehavior, including evidence of that unauthorized drivers had carried thousands of riders.
As it has done when reprimanded by the government in the past, Uber apologized for the misbehavior and said that it had made changes to fix the problems. The company said it had added safety features, including a new identification check for drivers.
Until the pandemic, Uber had enjoyed some of its greatest success in London. Its cars are ubiquitous around the city and a major mode of transport for many commuters. But its growth brought blowback, particularly from the city’s traditional black cabs whose business has been hurt the most by Uber. Some drivers for Uber have also criticized the company for poor pay and lack of benefits.
Uber was facing major financial losses even before the coronavirus led to a major decline in rides, but the pandemic has had a crippling effect on Uber’s business. In August, the company reported that revenue from its ride-hailing business had fallen 67 percent from a year earlier. The company posted a net loss of $1.8 billion. Its stock price still trades below what was sold at its initial public offering, a sign of investors’ lack of confidence in the company.
Dara Khosrowshahi, Uber’s chief executive, had taken steps to reduce costs by cutting thousands of jobs. And as Uber’s ride-hailing business has suffered, Mr. Khosrowshahi is focusing more on developing its food-delivery service, Uber Eats.
London is just one of the major regulatory challenges Uber is facing. In California, where Uber and rivals are under legal pressure to reclassify drivers as workers rather than independent contractors, the company has considered shifting to a franchise business model, or pulling out of the market altogether. In Britain, Uber is also facing a lawsuit that could force it to classify drivers as company employees, a costly change that would throw its business model into question.
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