Uber CEO Dara Khosrowshahi has faced one problem after another since his arrival at the company.
Uber’s new CEO Dara Khosrowshahi may be rethinking his decision to take the ride-sharing company’s top job after the latest blow: London has revoked its license to operate.
The Silicon Valley company is the world’s largest ride-sharing firm and the loss of London’s 3.5 million users is a severe blow. Transport for London, the city’s transport authority, determined that the company was “not fit and proper to hold a private vehicle hire license.”
“Uber’s approach and conduct demonstrate a lack of corporate responsibility in relation to a number of issues which have potential public safety and security implications,” the agency said. “TfL must also be satisfied that an operator is fit and proper to hold a license.”
The authority said as a result, it would not renew Uber’s license when it expires on Sept. 30. Uber said it would appeal the decision as its 40,000 drivers, which account for a third of the private vehicles hired, hold their breath.
(Uber facing several criminal probes. For the story, Click Here.)
“Transport for London and the Mayor have caved in to a small number of people who want to restrict consumer choice,” said Tom Elvidge, Uber’s general manager in London. “We intend to immediately challenge this in the courts.”
The agency’s biggest issue was Uber was its method for reporting serious criminal offenses, process for driver background checks and its uses of Greyball, a software that can block regulators from gaining complete access to information within the Uber app.
This is just the latest in a long and still growing list of problems the San Francisco-based company has faced in the 18 months, including charges of company-wide sexual harassment, a criminal case suggesting it stole proprietary information, allegations by drivers the company is looking to cut its pay and others.
The end result was the forced resignation of the company’s co-founder, Travis Kalanick, and the hiring of former Expedia chief Khosrowshahi last month.
(Click Here for the latest in the Waymo lawsuit against Uber.)
The loss of the license comes after a tumultuous few months for Uber, including a string of scandals involving allegations of sexism and bullying at the San Francisco-based start-up that forced out former CEO and co-founder Travis Kalanick.
Late last month Uber acknowledged it was facing a preliminary investigation by the U.S. Department of justice into the possible violation of bribery laws. The Wall Street Journal reported, Uber may have used software to illegally interfere with competitors, such as Lyft, while also causing problems for drivers who wanted to work for both services.
The latter investigation is the latest to focus on Uber’s apparent use of surreptitious software to cause problems for regulators, competitors and its own drivers. Known as “Hell,” the software allowed Uber to create fake accounts to track drivers that worked for Lyft, as well as monitoring what its rival was charging for rides.
The FBI is also looking at whether software was also used to encourage drivers to leave Lyft and work exclusively for Uber.
(To see more about the problems at Uber that led to Travis Kalanick’s departure, Click Here.)
Earlier this year, the New York Times revealed that the ride-sharing company had developed another surreptitious software program, dubbed Greyball, to track and avoid regulators who might try to monitor Uber’s services. The company subsequently confirmed the existence of the app, but insisted it was used “exceedingly sparingly” to protect drivers from dangerous riders.