Uber suffered a major blow on Monday after London transportation authorities made a surprise decision to not extend its taxi operating license because of persistent safety problems, throwing into question whether the company can continue operating in its most lucrative European market.
The decision will not immediately affect Uber’s presence on London streets. The ride-hailing company said it would appeal the decision, setting off what could be a long legal process. Uber can continue to operate throughout that time.
But the news adds to a difficult year for the company, which staged a disappointing initial public offering in May. Uber has since experienced executive turnover, had several rounds of layoffs and faces continued public scrutiny over the safety of its passengers.
Transport for London, which regulates taxi and private hire services in the city, said Uber did not meet the “fit and proper” standard needed to hold a taxi license. Regulators said Uber had a pattern of failures that placed passenger safety at risk, including vulnerabilities in Uber’s app that allowed unauthorized drivers to carry thousands of riders.
“It is clearly concerning that these issues arose, but it is also concerning that we cannot be confident that similar issues won’t happen again,” Helen Chapman, the director of licensing, regulation and charging at Transport for London, said in a statement.
Uber’s experience in London highlights its broader regulatory challenge. In Europe, the company has struggled to get a foothold in countries like Germany, Spain, Italy and Denmark, where tougher regulations have limited its availability.
London is one of Uber’s most lucrative markets, but also home to some of its most contentious struggles with government authorities. The company has been in a battle to retain its license in the British capital for years.
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SOURCE: The New York Times, Adam Satariano and Amie Tsang