Rember when Uber broke onto the scene and swept everyone off their feet? It quickly became the trendy way to travel around the city or return home. Just pull up the app, add your credit card, and voila! Yet, despite the near-universal love of the service, the city of London recently banned Uber – for the second time! Read on to discover why this keeps happening and when the company might return to London…
More Controversy
As stated, London has banned the Uber service twice now. The first time around, back in 2017, Transport for London (TfL), the United Kingdom capital’s transport authority, banned the company for a lack of safety features. TfL cited the lack of background checks for drivers as the primary reason for suspending Uber’s license two years ago. To make matters worse, a few London Uber drivers ran into criminal issues just months before the 2017 decision. As a result, after a few months, the company enacted new policies and began working in London again.
This time around, however, TfL has a very different problem with Uber. The transport authority has now accused the company of serious operational and engineering failures. According to TfL, Uber cares more about profit than custom safety. They say they have uncovered security issues in Uber’s app that allows criminals to fake driver credentials and trick unsuspecting passengers.
Chief Executive Officer of Uber, Dara Khosrowshahi, immediately took to Twitter, calling the decision unfair. “We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong,” he wrote. “Over the last 2 years we have fundamentally changed how we operate in London. We have come very far — and we will keep going, for the millions of drivers and riders who rely on us.” Regardless of Khosrowshahi’s opinion, the news rocked investors, and the company’s stock fell by 34%.
The USA, China, And India Also Have Issues
Unfortunately, looking around the globe, things are not looking much better for Uber. Recently, the company faced massive controversies in both China and the United States, its two most significant markets. In the United States, two years ago, a woman entered a vehicle with an Uber sticker, and the driver took her to the unknown for her location. There he assaulted her and left her for dead. Then, when the woman tried to sue the company, the suit went nowhere, Uber noting that dangers were always present when taking any type of transportation. As one might imagine, this excuse did not go over well.
Something equally as terrifying occurred in China, further shaking customer’s trust in Uber. The story followed a nearly identical pattern, with a criminal using the company’s lack of background checks to earn a sticker and assault passengers. Once again, little to nothing came as a result of the crime. And things get even worse from there…
Terrible Workplace
What else could go wrong for Uber? Well, in addition to charges of a lack of passenger safety, the company allegedly also has a horrible environment. Many previous employees have complained about the conditions. Even worse, the state of New Jersey compiled a statement, saying that the company owes locals over $600 million for unpaid disability and unemployment insurance. As of today, Uber has paid over $3 billion in fines resulting from this and similar lawsuits.
“Uber may need to improve background checks on drivers and even the app itself. This won’t guarantee Uber a new license, and threatens to reduce margins in a city where increasing competition from companies such as Ola, ViaVan, and Bolt is adding to pressure on ride prices,” commented Aitor Ortiz, Bloomberg Intelligence Analyst.
There’s no new as to when Uber will return to London. However, investors seem to think it will return sooner rather than later, as the stock has already started to bounce back. We’ll check back in after the appeal process, which the company has started!
Sources: The Mirror, Finance101