By Alisha Haridasani
A London court on Tuesday renewed Uber’s operating license for 15 months, a significant victory for Uber that shows faith in the company’s turnaround plan led by new CEO Dara Khosrowshahi.
The court ruled that Uber had made “substantial changes” to its business practices and was now “fit and proper” to operate in the British capital.
But the 15-month license, which is far shorter than the five years usually awarded to private for-hire companies, comes with strings; authorities will closely monitor Uber in that time frame to see if it’s playing by the rules before deciding whether or not to grant it a longer-term license.
The city’s transport authority, Transport for London, rejected Uber’s application to renew its license in September, citing poor working conditions and lack of transparency around security incidents, such as sexual assaults, dealing the company a major setback in one of its largest markets. Uber has been allowed to continue operating in London as it appealed the decision.
Since the agency's decision, Khosrowshahi -- who took over from former CEO Travis Kalanick in August -- has been on a mission to revamp Uber’s tarnished reputation for ignoring rules and regulations in favor of its mission of unfettered growth around the world.
"The case over its license was kind of the first big test for Dara," said Aliya Ram, European tech correspondent for the Financial Times. "He flew down within weeks of taking over to meet with the TfL commissioner.... I think that created a general sense that Uber was both interested in and willing to make actual changes."
Uber’s presence in London challenged the city's local and usually more expensive black cabs that for decades had a stronghold over how Londoners got around during peak hours or at night, when the Underground is shut. As the ride-hailing company grew, so too did the frustration from black cab drivers who consistently held protests around the city.
When TfL announced its decision last year, Khosrowshahi tweeted that Uber is “far from perfect” but asked the city for a chance to “make things right,” pointing out that his company employed 40,000 drivers in the city and had 3.5 million users there.
In court this week, Uber again conceded its flaws and past operating methods but outlined specific company policy changes, such as new reporting tools for possible crimes by drivers.
"After years of operating poorly in London, Uber has now accepted that TfL's action in refusing to renew their was totally justified," said London Mayor and TfL chair Sadiq Khan in a statement about the ruling.
"As a result of us standing up for Londoners, Uber has been forced to overhaul the way it operates."
Those concrete actions rather than Uber's apologies helped convince the court, said Ram.
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