Uber Stock Jumps 7% as Company Wins Legal Fight for London Operating License

UTC by Bhushan Akolkar · 2 min read
Uber Stock Jumps 7% as Company Wins Legal Fight for London Operating License
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It’s a major victory for Uber since it gets an entry into one of its biggest markets in Europe. Uber has offered assurance that it has brought major structural changes in terms of passenger safety.

On Monday, September 28, ride-hailing giant Uber Technologies Inc (NYSE: UBER) won the legal fight to continue operating in London. Tan Ikram, the deputy senior district judge overturned the ban by the city’s transport regulator – TfL. The judge gave his decision expressing “sufficient confidence” in Uber and adding that the company “no longer poses a risk to public safety”. In his judgment judge Ikaram wrote:

“Despite their historical failings, I find (Uber), now, to be a fit and proper person to hold a London PHV (private hire vehicle) operator’s licence”. He also added: “I do, however, wish to hear from the advocates on conditions and on my determination as to the length of a license”.

Last year in 2019, Transport for London (TfL) denied Uber the license for the second time. The regulator has previously stripped Uber’s license in 2017 citing a “pattern of failures”.

The regulator said that a glitch in Uber’s systems allowed unauthorized drivers to upload the photos to different driver accounts. TfL said that Uber’s systems allowed 14,000 of such fraudulent pick-ups from unauthorized drivers. Last year, the Silicon Valley-based billion-dollar startup appealed once again saying it had improved its system’s security against the complaints.

Earlier this year in April, Uber introduced a new system to alleviate the regulator’s concerns. The ride-hailing giant introduced a mix of facial recognition and human reviewers.

Uber Stock Surges 7% Pre-Opening

The Uber Technologies share price (NYSE: UBER) is 7.63% up in Monday’s pre-opening session. The coronavirus pandemic and lockdown has severely hurt the company’s business during Q2 2020. At the time of writing, UBER stock is at $35.80, up 3.89%.

However, UBER stock has now managed to regain its pre-COVID level during the recent market rally. London has been Uber’s largest market in Europe before the ban. Uber London had over 45,000 registered drivers with over 3.5 million users since its launch in 2012.

The ban in 2017 gave rivals a major entry in the London market and an easy path to grab Uber’s market. Now, with its re-entry, Uber will face a stiff competition with India’s OLA and Estonia’s Bolt. Besides, the ban was also a big boost to London’s local black cab drivers.

Tim Ward QC, for Uber London Ltd, said that the company has ensured major structural changes. “London is a safer place with Uber in the market than without it,” he added while hinting at risks of street harassment for women and ethnic minorities.

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