Although IE magazine thinks that Uber will eventually win its appeal against the decision today to suspend its licence, today’s decision will probably make some waves in the private hire market in the short term. Meanwhile, here is some reaction from GlobalData;
Following today’s news (Monday 25th November) that Transport for London (TFL) will not grant a new licence to Uber to operate in London after repeated safety failures;
Yasha Kuruvilla, Associate Analyst at GlobalData, a leading data and analytics company, offers his views:
“TFL’s decision will not only have impacts on the thousands of drivers and millions of passengers that use the service, but also specialized insurtechs that have developed products to specifically cater to the ride sharing market.
“Companies like Inshur and Zego are built around providing quick and flexible insurance to the ride sharing and ride hailing economy. Inshur entered into a partnership with Uber in May of this year while Zego recently became the first UK insurtech to be granted its own insurance licence, allowing it greater flexibility when creating its products.
“However, following today’s news, these two companies, and others like them, will be worried that one of their core customer groups may soon be non-existent.
“The predicament Uber finds itself in also points to a wider trend. Regulation often lags behind the market, and TFL’s decision is just one example of this. Once new economies grow to a size where regulators can no longer ignore it, decisions will likely be made that will negatively affect businesses acting within them.
“Insurtechs will be disproportionally affected by new regulation in the short term because of their highly specialized nature compared to the larger incumbent players. While it may be Inshur and Zego that feel the brunt of it today, it is simply a matter of time before new regulation hamstrings another insurtech in the market.”
TfL DECISION BASED ON PASSENGER SAFETY
Helen Chapman, Director of Licensing, Regulation and Charging at TfL, said: “While we recognise Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured.”
London Mayor Sadiq Khan said: “I know this decision may be unpopular with Uber users, but their safety is the paramount concern. Regulations are there to keep Londoners safe.”
On Twitter, Uber’s CEO Dara Khosrowshahi posted this response today;
We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London. We have come very far — and we will keep going, for the millions of drivers and riders who rely on us.
Do you feel Uber is just as safe, or not, as other private hire companies in London? Post a comment below.