Uber’s London Hub Almost Doubled in Size Before BanBy
Ride-hailing app’s revenue in London jumped by 59% in 2016
Company continues to operate during appeal of London ban
Revenue for Uber London Ltd. rose to 36.9 million pounds ($49 million) in 2016, up 59 percent compared with the previous year, according to its latest U.K. company accounts. Profit before tax climbed 65 percent to 3 million pounds, while the average number of monthly employees grew to 199, up 90 percent.
Uber’s license was revoked last month by Transport for London, a decision Uber intends to appeal. The U.S. company is allowed to operate during the appeal process.
Its London operation appeared to be but a sliver of its global operation. The startup generated $1.75 billion in adjusted net revenue in the second quarter of this year, up 17 percent from the prior quarter. Uber narrowed losses by 9 percent to $645 million, based on financial results provided by the company.
However, it is difficult to gauge Uber’s true profitability in the U.K. capital. While Uber London is the operating company for the city, actual commissions from drivers are routed to a holding company in the Netherlands - Uber International BV.
Net sales for Uber International BV for the same period increased to $1.62 billion from $519.8 million, according to company documents filed in the Netherlands.
In London, Uber says it has more than 40,000 drivers and more than 3.5 million riders who use the app at least once every 90 days. Regulators criticized Uber for a poor record of reporting crimes and not conducting adequate background checks on drivers. Officials also said the company has actively tried to avoid government scrutiny through a program called "Greyball." Regulators concluded Uber didn’t pass the "fit and proper" test to operate in the city.
Chief Executive Officer Dara Khosrowshahi flew to London for a meeting Tuesday with Transport for London, and talks have been flagged to continue over the coming weeks.
In its results, Uber notes that the group has "exposure to numerous legal and regulatory risks," including ligation related to Uber’s classification of its drivers as independent contractors, rather than employees.
- Smartphones Are Killing Americans, But Nobody’s Counting
- Turns Out It Will Be Congress’s Fault When Stocks Crash
- Why a Pub in the Middle of Nowhere Was Named the World’s Best Restaurant
- Facebook and Google Helped Anti-Refugee Campaign in Swing States
- Ford to Take $267 Million Hit From Recall of F-Series Trucks