It is time to put the value back into values

22/09/2017

Emma Kane, Chief Executive

It is time to put the value back into values

Today’s announcement by Transport for London (TfL) that Uber London Limited is “not fit and proper to hold a private hire operator licence”, citing the lack of “corporate responsibility”, is a landmark moment. 

Despite the fact that 40,000 Uber drivers have been granted a licence in London since 2010 and, every week, 30,000 people download Uber to their phones and order a car for the first time, the need to demonstrate corporate responsibility matters – today’s decision has shown that Uber is not too big to fail.

At a valuation of around $62.5 billion, Uber is the world’s most highly-valued private technology business (as well as the most heavily lossmaking). But being highly valued in monetary terms means nothing if your lack of corporate values results in being precluded from operating.

Despite operating globally, the loss of its licence in London (if Uber’s appeal is unsuccessful), is likely to have a significant impact on its financials – last year Uber recorded losses of $2.8 billion based on net revenues of $6.5 billion; there is no doubt that other cities will be looking at today’s decision from TfL and considering the futures of Uber in their own jurisdictions. 

The attraction of Uber to consumers has been its simplicity and low cost. But whether investors will share this passion after today’s announcement, when the next fundraising round inevitably comes, is yet to be seen. Until today, Uber had seemed invincible - very few, relatively new businesses could survive the slew of negative revelations that have been thrown at Uber – from pay, to failure to report crime, to gender inequality. And yet, these apparently had little effect on its growth and popularity. Even the public backlash against the company’s affiliation with President Trump was swiftly handled without negative impact.

There is little doubt that there will be some very high-profile lobbying over the next 21 days – the period Uber has to appeal TfL’s decision; the term ‘Uber’ will be as popular on Twitter as it is on smartphones with the 40,000 drivers in London alone seeking to secure their futures, coupled with all the Londoners that have enjoyed fares promoted heavily as a cheaper and easier way of getting from A to B.

Meanwhile, those whose voices had apparently been drowned can now be heard cheering, such as wheelchair users, asthma sufferers/those worried about pollution, and black cab drivers.

For many wheelchair users, the idea that Uber drivers could have resulted in the extinction of the iconic London black cabbie was a scary prospect, given that every black cab is required to be fitted to accommodate wheelchairs, an investment that Uber drivers had not had to make. 

For those concerned about the pollution caused by the congestion on London’s streets, the decision will be welcome news. Since TfL granted Uber’s licence in 2010, London has moved from being the eighth most polluted city in Europe to the most polluted one, no doubt linked to the congestion caused by the additional 40,000 Uber drivers on London’s roads.

Meanwhile, black cab drivers, who invest approximately three years of their lives doing the knowledge to get their badges, and spend a fortune complying with requirements for their industry, will now be able to compete on an even playing field with the licensed mini-cab firms such as Addison Lee - the problem was never having competition for the black cabbies, it was unfair competition... the creation of a three-tier system where one group was able to avoid playing by the same rules.

It appears that Uber’s patchy record on corporate responsibility has finally caught up with them today. Disruptive technologies that lower cost, enhance user experience and increase accessibility for consumers are welcome but not at the expense of values. Today’s decision proves that corporate responsibility is not just an optional extra, it is fundamentally important to long-term corporate success and survival.


 

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