Contrition wins the day for Uber in a big market

Contrition wins the day for Uber in a big market

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SECOND chances exist, after all. Last September Uber was sideswiped when Transport for London (TfL), the city’s transport regulator, revoked the ride-hailing giant’s licence to operate in the capital, citing concerns related to public safety and reporting of drivers’ criminal offences. The decision appeared to dent the prospects of the firm, which counts London as its largest European market and one of the most lucrative of its 600 cities. Uber continued to operate in London while appealing the decision, but a lot still hung in the balance.

Welcome news came on June 26th when a judge in London awarded the firm a licence for 15 months. In court Uber had taken a contrite and muted stance, promising to do more to provide support for riders and drivers, including launching a telephone hotline for passengers. The chief magistrate for the case, Emma Arbuthnot, decided that Uber had not acted in a sufficiently “fit and proper” manner previously, but that its new approach and leadership suggests it is ready to do so now.

TfL will still monitor it over the next 15 months, which will serve as a probationary period of sorts before its licence is again reviewed. Some doubt if Uber has really changed its rough-and-tumble ways. Gerald Gouriet, a lawyer representing the Licensed Taxi Drivers’ Association, said that an “Uber in sheep’s clothing” had appeared before the court.

Uber certainly has plenty to be sheepish about. It was Silicon Valley’s biggest star before it suffered a series of public-relations and legal scandals. One episode, which fuelled concerns in London, involved revelations that the ride-hailing firm had designed software, called Greyball, to hide information from regulators and law-enforcement officials. Another complaint involved Uber’s lack of timely reporting of attacks on passengers by drivers, suggesting the ride-hailing company prioritised profits over public safety.

Dara Khosrowshahi, who took over as chief executive last August, has been trying to win back trust. Uber is trying to change its image by undertaking a marketing campaign; it includes a national TV advert in America starring Mr Khosrowshahi, who almost seems to be running for political office as he pledges “new leadership and a new culture”. He has also invested more effort in improving the firm’s treatment of drivers; previously being “nice” was a hallmark of Uber’s American rival, Lyft. Uber now allows passengers to tip drivers in many markets.

He must also tend to the firm’s business. Earlier this year he raised money from SoftBank, a Japanese investor, which should tide it over until an initial public offering expected next year. In the first quarter of 2018 Uber claimed around $11.3bn in gross bookings, a huge sum; losses are narrowing. But it may be the more money the firm makes, the more concessions that regulators and drivers will feel they can extract from the firm.

Regulatory pressures remain heavy. In Britain Uber is appealing a ruling that it must count drivers as employees rather than contractors, entitling them to a minimum wage and holiday. Mr Khosrowshahi has so much to do that he is unlikely to get much time off himself this summer.

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