Uber’s New ‘Good Cop’ Tack Will Face Test in U.S. City TusslesBy
Ride-sharing app’s sharp elbows angered officials across U.S.
San Francisco, New York City loom as next key flashpoints
Uber is testing out a new conciliatory tone in London, where officials said they wouldn’t renew the ride-hailing service’s operating license. It’s going to have ample opportunity to see if that approach will work in the U.S.
San Francisco’s city attorney is investigating whether Uber Technologies Inc. is a public nuisance. In New York, officials are mulling ways to tighten controls on ride-hailing, including requiring a quarter of all trips come with wheelchair-accessible vehicles. And Seattle has passed an ordinance to make it easier for Uber drivers to unionize.
"Uber is at a turning point with big-city governments," Jon Orcutt, director of communications and advocacy for the TransitCenter, said of Uber and other ride-sharing companies. "London’s action to threaten to withdraw their license really could turn the corner in a more normal regulatory situation for Uber."
London officials said Friday the city would not renew Uber’s operating license, which is set to expire Sept. 30, because it isn’t “fit and proper to hold a private hire operator license.” The city cited a failure to do sufficient background checks on drivers, report crimes and a program called “Greyball” used to avoid regulators.
In response, newly minted Chief Executive Officer Dara Khosrowshahi released an open letter Monday apologizing "for the mistakes we’ve made" and acknowledging that the company "got things wrong along the way" during its rapid growth.
London is a critical global market for Uber, which could encourage the company to make regulatory concessions to remain on the streets, Orcutt said. That stands in contrast with the company’s sharp-elbowed approach under co-founder and former CEO Travis Kalanick.
Uber ruffled feathers in city halls in several major U.S. cities that struggled to corral the company during its growth. It raised the ire of local officials and incumbent taxi drivers by compiling a track record of skirting traditional taxi-industry regulations and refusing to share trip data and other records sought by city officials.
San Francisco City Attorney Dennis Herrera in July requested court orders for Uber and competitor Lyft Inc. to hand over years worth of records after the companies refused to comply with an earlier subpoena for the records. Herrera’s office is investigating whether the companies and their estimated 45,000 drivers in the city are creating a public nuisance, a finding that could subject the companies to civil monetary penalties and expose them to court injunctions restricting their operations in the city.
“The status quo is not working,” Herrera said in a July 21 statement. “There’s no question that Uber and Lyft offer convenience. But convenience for some cannot trump the rights of every San Francisco resident and visitor.”
Uber has also come under pressure to produce driver activity records from New York City. The New York City Taxi and Limousine Commission meanwhile proposed a new rule that wheelchair-accessible vehicles eventually account for 25 percent of all trips dispatched by for-hire vehicles, including Uber and Lyft. That would add a new regulatory burden on those companies, putting their costs more in line with traditional taxi companies.
That followed New York City Mayor Bill de Blasio’s failed bid in 2015 to cap the number of new drivers that could join ride-hailing companies each year out of concern that the companies were exacerbating road congestion. He ultimately backed down after an intense public backlash whipped up by the company.
But now the city council on Monday was considering a six-month study of Uber’s impact on the traditional yellow cab business, where the value of medallions -- licenses to operate taxis -- has dropped by 90 percent in the past four years.
Conflict has flared elsewhere. Just last month, a federal judge dismissed a challenge to Seattle’s collective bargaining ordinance, which is now on hold amid an appeal. A Pennsylvania state judge ordered Uber to stop offering its Uber-X ride service in Philadelphia last October, though the decision was overturned on appeal.
Uber has also made it clear that it calls its own shots sometimes. On Tuesday, Uber said it will pull out of Quebec on Oct. 14 if the regional government sticks to new rules that would increase training hours and subject drivers to background checks by police. Uber has been operating on a government pilot program for the past year in Quebec and last week the Transportation Minister proposed to extend the project, but under revised rules aimed to put Uber in line with traditional taxis. Last year Uber also pulled out of Austin, Texas, in protest of fingerprinting requirements.
To be sure, not everything about Uber’s response to London is different. Like it did in addressing New York’s driver cap, Uber enlisted riders to join its opposition to losing its license in London. An online petition posted by the company had garnered nearly 775,000 signatures as of Monday afternoon.
In his statement, Khosrowshahi said while the company will appeal the decision, it’s doing so "with the knowledge that we must also change" and closed by committing to "work with London to make things right."
To Orcutt, with TransitCenter, a New York-based nonprofit that advocates for mass transit, that approach portends a new tone.
"Uber exploded onto the scene and very deliberately tried to ignore or flout regulations," he said. "I think it means you can get in a room and have a conversation as opposed to a battle."
— With assistance by Joshua Brustein, Henry Goldman, Pamela A Maclean, Sophia Pearson, and Jef Feeley