Advertisement

Uber only has itself to blame for London license loss

Uber only has itself to blame for London license loss
From TechCrunch - September 23, 2017

The tech industrys over-processed supply of irony might not be enough to service all the ramifications of Uber being stripped of its London license by the citys transport regulator.

Uber advocates were immediately scrambling to bust out the reactionary clichspainting the regulator as anti-innovation and claiming London is now closed for digital business. (A point that might have more substance if they were talking about Brexit.)

Guys. Spare us. Please.

NB: A regulators job is literally to uphold a set of standards on behalf of the public, not to bow down before your shiny app.

The old Theyve caved to the taxi cartels and/or the unions! refrain was also wheeled out and waxed off. Harder to spot: Any mention of how much Uber spends on lobbying lawmakers to influence regulatory decisions in its commercial favor.

Nor how Ubermobilizes its app infrastructure to create thousands-strong lobbying armiesto apply pressure to city authorities at key moments of regulatory threat.

Soquelle surprise!theres already a petition with hundreds of thousands of signatures against TfLs decision. A petition set up and promoted by, er, Uber, of course

At the same time, some genuinely outraged London Uber users, who have become accustomed over the past five+ years to a VC-subsidized regime of unsustainably cheap cab rides, have taken to social media to cry that its simply not fair!

And to wonder aloud how theyll be able to go anywhere without Uber. This in a city that has one of the most extensive and accessible public transport networks in the worldnot to mention a large number of private hire vehicle companies other than Uber, some of which can also be summed by an app (such tech! much innovation! wow).

How will we get home safety now, fretted othersapparently untroubled by the fact that Londons Met Police had informed the regulator Uber was failing to report sex attacks by drivers on its platform. TfL cited Ubers approach to reporting serious criminal offenses as a contributing factor to its decision to withdraw licensing.

The deepest irony of all is that Uber can continue to operate in London while it appeals the regulators decision. Which will, at very least, take months. It could take years.

Being told youre not fit and proper to operate a service yet allowed to keep operating your service? Tell me again exactly how London is closed for digital business?

Uber for a laundry list of scandals

Corporate social responsibility? Ubers company fabric has demonstrably been cut from a very different kind of cloth. Thats why its new CEO is right now having to triage a laundry list of scandalsfrom dealing with an internal culture of sexism and bullying; to privacy and security failings so massive Uber just had to agree to two decades of oversight by a US regulator; to what appears to be a disturbing habit of building software tools that aim to blur the line of legalitysuch as by helping it evade regulators or slurp data from rivals.

Meanwhile Uber intones that TfLs decision will put more than 40,000 drivers out of work. And claims its going to court to defend the livelihoods of all those drivers.

Yes, this really is the same company that studiously avoids employing any of those thousands of platform dependentsrather it categorizes them as self-employed contractors. Being in work with Uber means accepting the risk and responsibility of being precariously managed by a technology entirely beyond your control.

Uber has even tried to monetize that insecurity by selling personal injury and illness insuranceto its drivers. How very innovative indeed! Such a shame it doesnt provide sick pay in exchange for sweating toil in the first place.

In a test case last year, a UK employment tribunal disagreed with Ubers classification of drivers as self-employed contractorsruling the company must pay the individuals in question the national minimum wage, as well as cover holiday pay and provide adequate work breaks.

Ubers business has of course been structured to try to avoid the expensive rights of millions and millions of workers landing on its balance sheet. Despite the fact that, without the labor (and possessions) of all those drivers it wouldnt be able to deliver its service.

Displaying a very black sense of humor, Uber calls its powerless platform precariat partners. Even as it routinely instructs its lawyers to appeal decisions seeking to expand drivers rights. And even though it fought for so long against adding a tips option to its platform.(It routinelychallenges any moves by citiestrying to raise safety standards for Uber users too.)

But politicians are waking up to gig economy regulation. As indeed are gig economy workers. That Uber employment tribunal ruling looks like both warning klaxon and tip of a titanic iceberg.

So if youre an entrepreneur, and circumventing employment regulation is your benchmark for innovation, its really time to get a new playbook.

In Europe, governments are as un-fond of seeing their tax bases shrinking as workers are their rights evaporating. While legal minds do appear to have grokked how a tech business which replaces human managers with an app that barks orders is still, er, managing workers.

Europe also appears to beapproaching a consensus legal view that a tech platform whose primary business is the delivery of transport services iswait for ita transportation company. And should therefore be regulated as a transportation company.

The legal mists Uber has exploited for so long look to be clearing.

And so if your innovative business model is intent on siphoning disruptive fuel from the tightly managed labor of thousands of people who you wont classify as workers, you might find VCs arent as elated by your pitch as you imagined.

Mark Tluszcz, CEO at VC firmMangroveCapital Partners, had this cautionary warning following the Uber decision: There are fundamental issues with the business models of many gig economy companies. While they offer great services and excellent value for money, they are often dependent on not paying salaries, taxes and insurance.

Oops!

But no matternone of that stuff is a barrier to Uber using the precarious livelihoods of its non-employees as an emotive cry for a brake on the TfL regulatory decision right now, and as the claimed justification for what could be years of legal action and uncertainty as it seeks to force the regulator into reverse.

Now dont get me wrong. TfL isnt perfect by any means. You can certainlyand people havecall out the regulator for letting Uber operate for more than five years in the face of mounting concerns. (Or, well, you could say it was demonstrating that London is open for digital business?)

Arguably it could and perhaps should have stepped in sooner to investigate issues being raised. Although it would surely have faced the same or an even more fierce cry of anti-innovation had it moved to strip Ubers license earlier.

The most biting response to TfLs decision came fromJames Farrar, co-claimant in the Uber employment tribunal decision, who described it as a devastating blow for 30,000 Londoners who now face losing their job and being saddled with unmanageable vehicle related debt.

Although his assessment does also underline exactly how precarious it is for anyone to put their faith in a rights less platform to be their forever reliable non-employer.

I mean, this is also a company that has publicly stated its ambition is to remove human drivers from its business equation entirelyand replace them with autonomous machines. So its partnership offer has always come with plenty of caveats.

But Farrars suggestion that TfL should have sought to strengthen its regulatory oversight earlier does have some merit. Specifically he says it should have curbed Ubers runaway licensing and sought to protect the worker rights of drivers.

Its the best critique Ive seen of TfLs ruling. However it does risk eliding the public safety issue.

As indeed do many of the male voices that have been so quickly raised to speak up for Uber and to brand TfL as anti-innovation.

The end of the road for antisocial?

Advertisement

Continue reading at TechCrunch »