Uber Licence Cancelled in London

Transport for London (TfL) and Mayor Sadiq Khan are terminating Uber’s license to operate in London after deciding they are not a “fit and proper” organisation to run such a service. This cancellation is after a two-month extension to the license to allow a new application to be submitted and previous legal action by Uber. Uber intends to appeal the decision and can continue to operate in the meantime (for the next 21 days only from the 25th November).

Uber provides a service valued by many people in London, and termination would put over 40,000 drivers who operate the service out of a job, many of whom are from immigrant backgrounds. However there are alternative “app” based services as well as traditional black cabs and other phone booking based PHV (mini-cab) services.

The exact reasons for termination seem somewhat trivial as given in the TfL press release – see below. It includes technical glitches in the Uber software that allowed drivers to upload photos to other drivers accounts and hence operate as them. However there is no evidence provided of any harm to passengers that resulted. Such technical issues should be easy to fix.

One has to question whether TfL are attacking Uber, and will attack other operators similarly, purely on the grounds that they are unhappy with the number of PHV vehicles that are now on the streets of London.

Comment: This writer occasionally uses Uber and I have always been happy with the service. I think there will be a lot of irate customers as well as Uber drivers if this decision is allowed to stand. But it will no doubt please their competitors.

TfL Press Release on Uber: https://tinyurl.com/wt47lqv

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Uber Competitor Kapten Launches in London

Uber

Even those of us who own a car occasionally use Uber, other PHV (minicab) services or conventional taxis. Uber has become the dominant player by not just having a slick service with low charges but by spending a lot on promotion. Indeed they have been very successful at consistently losing money despite avoiding local taxes and they still managed to recently list the company on the stock market at a valuation of US$82 billion!

Lyft is one competitor they have in the USA, but there is another one launched in the UK named Kapten (see www.kapten.com/uk ). This is a French company backed by Daimler and BMW. One of their advertising themes seems to emphasise that they will be paying VAT in the UK, unlike Uber, but is that a good idea when that surely means customers will be paying more as a result? But Kapten is still claiming to be cheaper than competitors and they are offering some 50% discounts to attract initial business.

They are also looking for drivers to support the new service with some promotional offerings.

So far as users of such services are concerned, having more competitors, and having services where the supplier loses money doing so can’t be bad for the consumers. So we salute Kapten for wanting to join the traffic jams in central London.

Roger Lawson

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Changes to Congestion Charge – PHVs Targeted To Raise Money

The Mayor of London and TfL have announced proposals to change the Congestion Charge (a.k.a. Tax) so as to raise more money. The main change is that PHVs (minicabs) will no longer be exempt from paying this tax. Uber and other drivers will no doubt be up in arms about this and it will mean their clients pay a lot more.

Another change is that the Ultra Low Emission Discount (ULED) which currently applies to vehicles that emit less than 75g/km of CO2 will need to have zero emission capability by 2019 and by 2021 only electric vehicles will qualify. That means that many of the 20,000 vehicles currently registered for the ULED will need to be changed if the owners wish to continue to qualify for the discount.

A Blatant Lie

What’s the justification for these changes? The consultation announcement says that the Congestion Charge “was a huge success”. It claims a reduction in traffic and a 30% reduction in congestion as well as improvements in air quality since it was introduced. These claims are simply spurious. There was a short-term reduction in some vehicles entering the central zone, but the numbers of taxis, PHVs and buses increased. The result was that congestion soon returned to what it was before the tax was introduced and has since got substantially worse. Neither was there any improvement in air pollution which was never expected to happen and did not. See this web page for the facts: http://www.freedomfordrivers.org/congestion.htm

The claims made by TfL are downright lies. But traffic delays have been increasing which is the justification put forward by TfL for the proposed changes.

Why Should Taxis Be Exempt?

One controversial aspect of the original scheme was that registered taxis (black cabs) and PHVs (private hire vehicles) were exempt from the congestion tax. It was never very clear as to why some vehicles should be exempt while others are not. Why should private car occupants pay the charge while people using other vehicles for similar journeys should not? Even more puzzling is why PHVs are now proposed to be taxed while taxis are not. What is the logic of this? Note that the increase in PHVs due to the popularity of services such as Uber has led to many more vehicles entering central London of late and hence have contributed to congestion significantly in the last couple of years. But will the tax now proposed actually reduce their numbers? That is surely unlikely for the same reason that the congestion charge scheme did not reduce congestion. The unsatisfied public demand is such as to soon soak up the capacity released by people unwilling to pay the tax. You cannot solve congestion via taxation!

It’s About Money

The conclusion must be that these proposals are more about raising money for the Budget of Mayor Sadiq Khan. He desperately needs it. See previous blog posts for coverage of that topic.

A Timely Announcement

One might ask why the Mayor chose to announce these changes on a Friday lunchtime when the news channels will be dominated by the Brexit decisions and the England World Cup match for the next 48 hours. This might enable him to escape the opprobrium of PHV drivers for a few hours but not much longer I suggest.

More Information

See this web page for more information and to respond to an on-line consultation: https://consultations.tfl.gov.uk/policy/private-hire-charge-exemption/?cid=ccyourviews

You may also wish to tell us how the ABD should respond to the consultation as we will certainly be doing so.

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Uber and London Airport – One Current and One Future Court Case

Uber have been appearing in court to appeal the loss of their licence to operate in London. The magistrate’s decision will apparently hinge on whether they are “fit and proper” persons to operate a taxi service, and with the weight of evidence about past failings, whether they have changed their management or the way they operate. A decision should be delivered in a few days.

It would seem unfortunate if they are not allowed to continue as it has proved to be a very popular service with many users, although no doubt competing firms would no doubt fill the gap rapidly.

A legal battle is now in prospect after Parliament voted yesterday to progress the expansion of London Heathrow Airport with a third runway. Local west London borough councils and the Mayor of London are queuing up to join a threatened legal action against the development on the grounds that it will be unable to meet environmental regulations.

An application for a judicial review looks likely from at least Hillingdon, Richmond, Wandsworth and Windsor & Maidenhead with support from Mayor Sadiq Khan. Hillingdon have already reserved a budget of £200,000 for the case.

Some readers were surprised by this writer’s previous comments opposing the expansion of London Airport. A good letter by Dr Sally Cairns in the Financial Times summarised the reasons very well – here’s a part of it: “Heathrow already subjects more than half a million people to significant noise annoyance; generates more than 30 million car journeys a year through a busy part of London with air pollution problems and is the UK’s biggest point source of carbon dioxide emissions. Objecting to Heathrow expansion is not about nimby-ism – it is about the lack of evidence for the benefits, and the strong likelihood of high social and environmental costs”. The letter writer gives an address in Wokingham, but it was painful to watch BBC TV News last night with some of the residents talking whose homes will be demolished as a result. That’s if it ever happens. In the meantime, they are stuck in limbo and probably for some years, being unable to sell their homes.

Note though that the air pollution problems around Heathrow are caused to a large extent by aircraft. Cars and goods vehicles do contribute but are getting cleaner very rapidly with electric cars now very viable for most drivers. Electric aeroplanes of any size are a long way from reality and the growth in air traffic is a major problem for toxic emissions.

The legal and other delays, such as the likely reluctance to fund the enormous cost, could mean years wasted when other solutions to increased travel demand are available and could be progressed more rapidly. The disruption caused by the expansion of road capacity to serve a larger airport and the need to divert the M25 into a tunnel will be a major problem for road traffic during the lengthy construction period.

Many factors mitigate against expansion of Heathrow, despite the apparent commercial benefits of doing so.

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Emirates Cable Car, Bike Hire and TfL Finances

The London Evening Standard recently ran an article that suggested the Emirates Cable Car might be sold off or scrapped. The Cable Car runs across the Thames at Greenwich, cost about £60 million to build and opened in 2013. Passenger numbers have been lower than forecast with it mainly being used by tourists. I used it once but it’s a very slow means to get across the Thames at that point, even allowing for delays at the Blackwall Tunnel.

Does it lose money? According to the information provided by a recent FOI Act request, the numbers are as follows for the 12 months to Jan 2017: Income £9.2 million, Operating Costs: £6.0 million. But £3.3 million of the income comes from Emirates Airlines sponsorship under a deal that runs to 2021, so it barely breaks even ignoring the sponsorship money. Why an airline would wish to subsidise this slow and unreliable mode of transport (it frequently breaks down or has to stop in high winds) was never very clear.

On break-even if they don’t renew sponsorship it might be argued it is worth retaining, but obviously the construction cost will never be recovered, and even exceptional maintenance costs might be unaffordable. The Mayor and TfL have some tough decisions to make on this one.

The Standard also suggested that the Santander Bike Hire (formerly Barclays) might be scrapped to save money. It costs £21 million per year to run, of which TfL pays £3.6 million according to the Standard article. It might have encouraged more cycling in London, although users of these bikes are some of the worst behaved cyclists from my observations – perhaps because tourists unfamiliar with London traffic and road rules tend to use them. However, there are now some commercial alternatives who operate a “dockless”, pick up and drop off anywhere system. It might must be that after just a few years the technology is obsolescent.

Both subjects are of course under the spotlight because of the pressure on the Mayor’s Transport Budget where he has seriously miscalculated the funding needs and the impact of his past promises to his electorate. Another aspect that TfL are examining according to an FT article is the exemption from the London Congestion Charge (a.k.a. “tax”) for taxis and PHVs (mini-cabs). The latter have proliferated with such operators as Uber creating a lot more traffic congestion. Why they should be exempt was never very clear, although the argument is perhaps that they offer a public service similar to buses. But it’s not very clear why buses should be exempt either, particularly as they create a lot of congestion.

Bearing in mind the need for the Mayor to raise money, and the fact that he is threatening to cancel Uber’s licence, the expected outcome is surely going to be something like this: Yes we won’t cancel your licence after all but you’ll need to pay the Congestion Charge, or a specially large annual licence fee. Is that a deal?

Roger Lawson

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Is Khan Trying to Kill the Private Hire Industry?

Gareth Bacon, leader of the Conservatives in the London Assembly, has published a revealing article on the policies of Mayor Sadiq Khan under the headline “Is Khan trying to kill the private hire industry – or is he just incompetent”. It suggests that Khan is pursuing short term flashy policy gimmicks but he is hampered by his election promise to freeze public transport fares. This means he is “scrambling around to make savings and raise money”. One victim of this is the private hire (minicab) industry where proposed increases in license fees are astronomical. This could force hundreds of mid-size PHV operators out of business.

The costs for larger operators such as Uber will rise enormously – as much as 102,500 per cent the article suggests. That’s assuming they even manage to retain their license which is under threat.

The recently published Mayor’s Transport Strategy indicates he wants us all to walk, cycle or use public transport as it’s more “healthy” than getting in a car or PHV. So his tactics are certainly consistent if nothing else. He not just wants you to stop owning and driving a car, he wants you to stop using private hire vehicles and taxis also no doubt.

But like all good politicians, he is not proposing a simple ban, but attacking them indirectly by raising their costs and getting tough on licensing conditions.

The full article is here and it’s well worth reading:

https://www.conservativehome.com/localgovernment/2017/11/gareth-bacon-is-mayor-khan-trying-to-kill-the-private-hire-industry-or-is-he-just-incompetent.html

Roger Lawson

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Uber Kicked Out of London

Transport for London (TfL) have announced that Uber’s licence to operate in London will not be renewed. That means their service will terminate in a few weeks and 40,000 drivers will be put out of work. There are as many as 3.5 million Uber users in London and a petition to reverse the decision has already been established on Change.org which has collected 450,000 signatures in about 24 hours – see https://www.change.org/p/save-your-uber-in-london-saveyouruber

TfL, supported by Mayor Sadiq Khan, claim Uber is not a fit and proper organisation to hold a license due to its failure to report incidents, failures on vetting drivers and other grounds. Uber have 21 days in which to appeal, and no doubt there will be a legal challenge as well if TfL do not back down.

TfL previously announced that license fees for Uber to operate in London will rise from £3,000 to £3 million for a 5-year license, so it is clear that the Mayor is attacking Uber via more than one channel. Why is he doing this? It is clear from the Mayor’s recently published Transport Strategy (see http://www.freedomfordrivers.org/against-mts.htm ) that Private Hire Vehicles (PHVs) such as Uber operate are contributing to traffic congestion in London in a big way. But it is also clear that the Mayor objects to all private vehicles whether you drive them or someone else drives them for you.

Are there alternatives to Uber? Lyft is a big similar operator in the USA but does not operate in London yet. Taxify launched in London recently but then had to suspend operations after TfL queried its license. There is a service called Hailo that operates to call conventional taxis (don’t bother trying to use it in outer London though in my experience), and numerous local PHV operators plus larger operators such as Addison Lee who have a ride hailing app.

Comment: I am not totally convinced that the allegations against Uber are serious enough to warrant refusal of a license. Perhaps Uber should up its game in several areas, but is it any worse than other PHV operators? As a relatively new service, with lots of new drivers, there are likely to be some teething problems. Other penalties could surely have been considered. For example, a grant of a new license for a limited period on certain conditions being met.

I have used Uber a few times and the service is both efficient and low cost (Uber loses money in a big way I understand). For example, I called Uber recently to take my wife home at 3.00 am in the morning from an outer London hospital. The driver arrived in about 3 minutes. Great service at very reasonable cost.

Many people will see this act by the Mayor for what it is. A simple attack on a service that the Mayor and those in TfL would like to put out of business so that people have to walk, cycle or use public transport (i.e. use many less safe alternatives) if you read his Transport Strategy. That is why the ABD is so opposed to it.

It is true that the number of PHVs is contributing to traffic congestion, but there are other ways to ration their numbers and usage (e.g. on price).

I recommend that you sign the petition, as I shall be doing.

Roger Lawson

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