Uber has suffered one of its greatest defeats ever, the ride-hailing service has been effectively thrown out of London. Transport for London yanked Uber’s license to operate in the British capital on 22 September 22, 2017, because the ride-hailing app is not a “fit and proper” company.
The move leaves 3.5 million riders and 50,000 Uber drivers in the metropolis high and dry, The Washington Post reported. It will also put a serious dent in Uber’s supposed $70 billion in valuations and reputation as the world’s most “valuable unicorn.”
The move came after U.S. media reported that Uber was under investigation by the FBI because of a variety of alleged misdeeds. It also calls Uber’s ability to survive as a company into serious doubt.
“Uber’s approach and conduct demonstrate a lack of corporate responsibility,” a Transport for London press release charged. The governing body cited Uber’s failure to conduct medical and criminal background checks on drivers as reasons for giving the company the boot.
Uber will definitely lose money as well as prestige because of this setback. London is one of its most visible cities and profitable markets where drivers can $50 to $100 for a short trip.
Uber thing is worse than Brexit
London’s taxi or black cab industry was elated by the move, but average Brits were not amused. A political backlash is sure to follow, especially among the working and middle-class people that rely on Uber to get around in a congested city with a terrible parking shortage.
“This Uber thing is worse than Brexit,” @andatokhm wrote on Twitter.
“[Losing] #Uber makes London more unsafe for young people, especially students who can’t afford the ridiculous rates of black cabs,” @powell6269 complained via Twitter.
Around 300,000 people had signed a petition that demanded Uber’s license be restored, CBS News reported on 22 September 2017. British politicians are sure to take notice of that and take action.
Frustration is likely to boil over fast and black cabs and their operators are likely to be targeted. One reason why people will become angry is that Uber’s two most visible rivals, Lyft and Didi do not operate in London.
Lyft is only available in the USA and Didi only operates in China. One has to wonder if Uber will survive this debacle or get sold off to investors like its defunct rival Sidecar was.
Who will Buy Uber?
Sidecar’s remains were sold to General Motors (NYSE: GM) which is developing its own rideshare solution called Maven. Since GM pulled out of the UK after selling Vauxhall it is unlikely to take Uber’s place in London.
News stories did not say how Uber’s new CEO Dara Khosrowshahi will react to the situation. Although he certainly has his work cut out for him, a major job for Khosrowshahi will be to figure out a way to get rid of former Uber CEO Travis Kalanick and his sleazy associates.
Uber survived failure in China, but the debacle in the UK might be too much. One thing is clear, Uber will no longer be the world’s most valuable unicorn.