Uber decision shows London is behind the times

In light of Transport for London deciding not to renew Uber’s license to operate in the capital, there has been a wave of support for the ride-hailing service.

Future Cities Catapult is one of those organizations which is supporting Uber, not because it’s employees want cheap rides home, but because the use of technology to disrupt the status quo is what all digital entrepreneurs should be aiming for.

“Uber’s story has been so often told and it’s easy to get caught up in the intrigues of Uber’s office politics and the drama of Uber’s street politics with the cabbies,” said Rushi Rama, Strategy, Markets and Standards Team Lead at Future Cities Catapult. “But there is a bigger picture to consider.

“Uber’s aggressive expansion is what forced the rest of the sector to embrace the digital age for their customers. Uber represents the disruptive force of digital technology overturning entrenched business models. In the process, companies like Uber and Airbnb change their industries and life for millions.”

Rama has a point. Uber only begun because it spotted an opportunity to use technology in way which would make money and offer a useful service to customers. For everything wrong which Uber is accused of, there is one reason why its service (or one very similar) will continue; it offered customers something they wanted, at a price they could afford.

For those who lived in London prior to the Uber takeover, the scramble home was a nightmare after the pubs kicked out. More often than not, it was either a sprint to the nearest tube or enduring the ‘pleasures’ of the night bus. Cabs were either for those with expense accounts, in groups or had more money than sense. The taxi trade in the city centre made their own problems, either charging too much to get back out to Zone Three, or flat out refusing to go that far out of their way. Customer centric wasn’t a phrase which existed here.

Uber changed the game. It was cost effective, you could hail a cab when you waited in the pub and the number of taxis ensured the supply/demand didn’t exploit the customer. Uber embraced technological advances and created a service which was loved by the customer. Just ask the 787,810 people who have signed a petition to save the service (at the time of writing). It was a service created for the customer, not the cabbies. Yes, Uber made a load of cash, but they kept customers happy.

“The quickest and easiest response to this challenge is to slow the pace of change, or stop it outright,” said Rama. “And this looks to have been the case in cities and countries around the world. In most cases, as in London, the issue is safety, and there it is hard to argue that citizens should not be protected. But this could easily slip into protection of vested and monopolistic interests.”

Uber might have some questionable ethics and business processes, but those are the issues which need to be addressed. Banning the service, or at least attempting to, is not the right way to go about it. It is after all a service which benefits the customer; shouldn’t local governments and authorities be encouraging these ideas? Why not address the individual problems? If someone has a rash on their wrist, you treat it with ointment; you don’t amputate the entire arm.

Governments have always struggled to keep up with the pace of change. Perhaps the easiest way to address the challenge is to slow its progress? It is the simple solution which does not benefit the customer. And it certainly doesn’t shine the forward thinking light onto London; no wonder Silicon Roundabout is still a roundabout of mediocrity.

Why not undue the rest of the digital economy? Ban AirBnB because it is providing competition to mainstream hotels? Should we eradicate eBay and Amazon so the book stores can have a better chance? Or how about destroying the internet so traditional media channels can flourish again? Should other disruptors in the digital economy be afraid of progressing too quickly? Should Silicon Valley just down tools for the moment and wait for the boresome bureaucrats around the world to catch up?

“Perhaps a better approach to the challenge is to do the work ahead of time – if we can anticipate the issues that digital disruption will bring, then we can put in place strategies and regulatory frameworks appropriate for them,” said Rama.

TfL should investigate Uber, and the organization should be held accountable to standards which are deemed appropriate for the city. But banning disruptive technologies which offer a clear benefit to the general public is not the right answer. Transport for London should be slightly embarrassed by such actions, because it is essentially an omission of fault. It wasn’t ready to regulate new ideas like Uber, failed to catch up in the following years and the situation got away from its grasp.

A ban will give it a chance to get back into the game, but if this approach was taken with every technological breakthrough, would there be any such thing as progress?

Uber CEO promises to be good from now on

In a public letter to the whole of London Uber CEO Dara Khosrowshahi struck a conciliatory tone while vowing to appeal the recent decision not to renew its license.

Transport for London’s decision late last week sparked widespread response from petitions against the decision to applause for cutting the upstart internet company down to size. Uber’s initial response was defiant but Khosrowshahi, who let’s not forget recently replaced the founder of the company precisely because of the bad press he was generating, has tried to inject a dash of humility into his company’s public position.

You can read Khosrowshahi’s tweet and public letter below. While not explicitly detailing any measures he seems to be holding out the olive branch to TfL and asking what he can do to fix this. It’s hard to believe he hadn’t been made aware of TfL’s issues with Uber long before the decision was announced and last week’s announcement seems to have achieved what we presume was one of its desired outcomes – to get his attention.

Khosrowshahi has previously written a widely-leaked internal memo that you can also read below, in which he stressed that Uber needs to show greater humility and learn from past mistakes if it wants to move onwards and upwards.  

London Mayor Sadiq Khan recently did a radio interview in which he somewhat passive-aggressively accused Uber of being aggressive by threatening to take legal action. The interviewer quite rightly asked what’s aggressive about that but received no answer.

As we discussed in our recent podcast, the TfL move seemed to be a hard negotiating position and now Uber is quite rightly trying to take the heat out of the situation while simultaneously canvassing public support and banging on about how much it cares about London Uber drivers and passengers. Now that the posturing is out of the way hopefully that can all get together and do a deal to get Uber back in business on terms agreeable to London.