Uber loses license to operate in London, Uber stock fell

Uber, the US hailing company has lost its license to operate in London, the Britain Capital. Major cities in the United Kingdom where Uber operates include Glasgow, London, Manchester, York, Newcastle, Stock, London, Edinburg, Leeds, Cambridge, Leister and so on.

Uber losing their License came after Transport for London, known as TFL, discovered that some Uber drivers faked their identity. This led to the refusal of London Transit Authority to renew the operating license of Uber on Monday.

London is one of Uber's top market globally and has about 45,000 drivers in the city.

Transport for London cited "several breaches that placed passengers and their safety at risk," in a decision not to extend Uber's license which had expired midnight on Monday. The regulator said another reason why the license would not be renewed was that unauthorized drivers carried out thousand of rides. The regulator said these fraudulent drivers had conducted about 14,000 trips. All the trips were uninsured, and some of the unauthorized drivers had not been licensed at all by the regulator. In one instance, one fraudulent driver had had their license revoked. Transport for London said it also found drivers who had been suspended from Uber's platform were still able to create an account and start driving again. It also identified cases in which drivers didn't have the right insurance in place.

Helen Chapman, Director of Licensing and Regulation at Transport for London said, "While we recognize Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured".

Report has indicated that Uber has struggled to turn profitable and some investors are worried. The company posted a $1.16 billion loss in the latest quarter and CEO, Dara Khosrowshahi, forecasted that it would not make a profit until 2021. As a result, the shares of Uber fell by 1.5%.

In a counterstatement, Uber said that Transport for London had found it fit and proper in its most recent license renewal in September, saying it had audited every London driver over the past two months and will soon launch a new "facial matching process" for its Microsoft Power verification-system, which requires drivers to periodically take selfies for comparison with their account photos.

Wedbush Securities managing director, Dan Ives, has advised investors not to be under the impression that the phony photo issue is limited to London, and estimates that London represents 3% to 5% of Uber's business.

Jamie Heywood, Uber's London Operation Manager, says the firm will appeal the decision by the Transport for London.

 

Uber stock data as of today.