Uber embarks on legal battle to retain London license

[October 13, 2017]  By Costas Pitas

LONDON (Reuters) - Uber [UBER.UL] lodged a court appeal on Friday to overturn a decision by London's transport regulator that stripped the taxi app of its operating license in its most important European market, the first stop on what is set to be a long legal road.

Transport for London (TfL) shocked the Silicon Valley firm last month by deeming it unfit to run a taxi service and refusing to renew its license, citing its approach to reporting serious criminal offences and background checks on drivers.

The appeal marks the beginning of months of legal wrangling in a battle that had pitched one of the world's richest cities against a Silicon Valley giant known for forays into new markets across the globe that have stoked competition for established cab companies.

Uber, whose backers include Goldman Sachs and BlackRock, will defend its London business at a hearing most likely due on Dec. 11, a spokesman at Britain's Judicial Office told Reuters.

Uber, criticized by London Mayor Sadiq Khan for employing an "an army of PR experts and an army of lawyers", said that it hoped to keep talking to TfL to find a way forward.

"While we have today filed our appeal so that Londoners can continue using our app, we hope to continue having constructive discussions with Transport for London," an Uber spokesman said.

"As our new CEO has said, we are determined to make things right."

Only a month into the job, Chief Executive Dara Khosrowshahi met TfL Commissioner Mike Brown for talks earlier in October, which both sides said were constructive as the $70-billion firm tries to repair its relationship with the regulator.

Uber's license expired on Sep. 30 but its roughly 40,000 drivers in the British capital will be able to continue operating until the appeals process is exhausted.

Friday's appeal was submitted to Westminster Magistrates' Court in London as part of the first stage of a legal process which could take months or years to reach a conclusion.

The filing is a short notification of Uber's intention to appeal rather than the detailed grounds.

A photo illustration shows the Uber app on a mobile telephone, as it is held up for a posed photograph in central London, Britain September 22, 2017. REUTERS/Toby Melville/File Photo

DISRUPTIVE YEAR

London's decision is one of the most serious setbacks to the taxi app, which has been forced to quit several countries, including Denmark and Hungary, and faced regulatory battles in multiple U.S. states and around the world.

It comes after a tumultuous few months for the San Francisco start-up that led to former CEO and co-founder Travis Kalanick being forced out after a series of boardroom controversies.

Earlier this month, the firm's boss in Britain Jo Bertram said she would quit the taxi hailing app according to emails seen by Reuters.

The company is also embroiled in court action against two drivers who won a tribunal case last year entitling them to workers' rights such as the minimum wage and holiday entitlement, threatening its business model. Uber is appealing the verdict.

TfL said on Friday it would not comment before the licensing appeal hearing due later this year.

A spokesman at the Mayor of London's office said that Khan, a politician from the opposition Labour Party who is also chairman of TfL, continued to back the license decision and that all private hire firms must play by the rules.

He said during a monthly question time session on Thursday that the transport authority would defend its decision during the legal action.

"The courts now will consider the appeal from Uber and of course TfL will defend the decision they made," he said.

(Reporting by Costas Pitas; editing by Guy Faulconbridge/Keith Weir)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.