As if Uber’s new CEO didn’t already have his work cut out for him, now he has to deal with losing one of the company’s biggest markets.
On Friday, London’s transport authority said Uber is not “fit and proper” to operate in the city. The city opted not to renew the company’s license — a decision partly based on some of the damning revelations that surfaced about Uber this year.
Still, London no longer wants to offer the ride-sharing service a license. Uber said 3.5 million people have used its platform since starting in London in 2012. It said 40,000 licensed drivers will be affected.
The company has 21 days to appeal the decision. Uber will turn, in part, to its users to advocate for the brand. So far, a Change.org petition to keep Uber running in London has earned over 740,000 signatures since Friday. “It’s a significant decision — not just because London is a big taxi market but also because it might set a precedent for other cities that are of two minds about Uber,” according to Kartik Hosanagar, professor at the Wharton School of the University of Pennsylvania.
Arun Sundararajan, a professor at New York University’s Stern School of Business, agreed. “It’s important that this not start some sort of domino effect across the rest of Europe,” said Sundararajan. “It wouldn’t surprise me if more cities start to push back heavily because they’re trying to preserve their power.”
It could also be time for Uber’s opponents to advance their own interests in the region. One thing is for sure: Uber’s CEO Dara Khosrowshahi has his fair share of fires to defuse.
Khosrowshahi, formerly head of Expedia, took over the embattled $68 billion company at the end of August.
In addition to now dealing with a crisis in London, Khosrowshahi must manage Uber’s escalating court battle with Google’s Waymo over allegedly stolen self-driving car technology. He also faces a Department of Justice investigation into the “Greyball” software. Not to mention, the company still has a lot of work to do to repair its internal work culture.
“It will be a testament to [Khosrowshahi’s] leadership skills if he can make this problem go away and strike a deal with the London government,” added Sundararajan. “It could be a pivotal moment for Uber.” In response to the London decision, Uber said it would “immediately challenge this [decision] in the courts. “Transport for London and the mayor have caved into a small number of people who want to restrict consumer choice,” the company said.
Khosrowshahi weighed in later on Friday, tweeting that Uber is “far from perfect,” but he asked that officials work with the company to “make things right.”
