HomepageCommercial LawPrivate LawPublic Law & Human RightsCriminal LawEU & International LawCareers

Accessibility

Have Irlen Syndrome, or need different contrast? Click the button below for options.

Background Colours

Subscribe

Enter you email address below to subscribe to free customisable article notifications.

Alternatively, click the button below for our various RSS Feeds (available journal wide, or per section).

The Public Interest Case: TfL was Correct not to Renew Uber’s Licence

Article Cover Image

About The Author

Joseph Mahon (Former Regular Writer)

Originally a theology graduate from the University of Edinburgh, Joseph is currently undertaking an LLM in Public Law at UCL. His primary interests lie in three fields: public law, human rights, and international law. Outside of law, he plays football, tennis and cricket and is a die-hard supporter of Bath Rugby.

This article is part of the 'Uber London Licence Debate' series, edited by Keir Baker.

The decision by Transport for London (TfL) to not renew Uber’s licence to operate in London sent shockwaves across the Capital. A divisive issue on both traditional and social media, much of the discourse overlooked the legal aspects of TfL’s decision. In this series, two Keep Calm Talk Law writers set out competing viewpoints as to whether TfL’s decision can be justified.

Other articles from this series are listed at the end of this article.

On 13 October 2017, James Mulligan’s piece, ‘Poor Relations and Proportionality: The flaws of TfL’s Uber decision’, was published on Keep Calm Talk Law. It argued that Transport for London (TfL) was right to sanction Uber for their regulatory failures, but that the method of sanction they chose was disproportionate to the breaches cited. These breaches, it proposed, lay in Uber’s approach towards four responsibilities (the reporting of serious criminal offences, obtaining medical certificates for their drivers, obtaining DBS checks for their drivers, and using the controversial Greyball software in London), not in the substance of the responsibilities themselves.

Since their failings lay in the former, it contended that TfL should have opted for the less onerous of the two options available to them. Instead of banning Uber’s licence to operate outright – as provided by Section 17(2) of the Private Hire Vehicles (London) Act 1998 (PHV(L)A 1998) – TfL should have used Section 3(4) and Section 5 of the PHV(L)A 1998 to grant Uber a temporary, five-year licence to operate with specific conditions attached to it. In taking the less proportionate option, it concluded, TfL failed to consider the bigger picture – the positives of a transparent and mutually cooperative relationship between Uber and TfL – and opened themselves up for Judicial Review on proportionality grounds.

This article disagrees with the conclusion that TfL acted disproportionately. Rejecting the two-limbed ‘fit and proper’ test advocated by Mulligan, it proposes that a broad test is more appropriate. If fitness and propriety is treated as an all-encompassing assessment, and the importance of safety considerations in TfL’s decision is recognised, the proportionality of TfL’s decision becomes clear. It was a balanced response to continued failures that drew on tangible public interest grounds. While the bigger picture is not strictly relevant for assessing TfL’s decision, the decision was nonetheless the correct one when viewed through that lens.

Fitness and Propriety

The term ‘fit and proper’ appears both in Section 3(3)(a) of the PHV(L)A 1998 and in TfL’s Licencing decision on Uber London Limited (the Statement). It is not defined in the PHV(L)A 1998 but is expanded on in Part 4 of TfL’s Operator Licencing Guidance Notes (the Guidance Notes), where a series of criteria are given Convictions, Company Directorships, Accounts, and so on by which to judge the fitness and propriety of an organisation. They are, as Mulligan highlights, largely those of a reasonably well-run business and should be contextualised within the wider aim found in Part 1 of the Guidance Notes:

[T]o give Londoners confidence, when they use a licensed private hire operator, that they are dealing with an honest, professional organisation with safe drivers and vehicles.

They are not comprehensive, however, and they lack the precision to form a legal test. Rather, they suggest that fitness and propriety is an overall assessment of a company, not a box-ticking exercise. Mulligan argued that the terms ‘fit’ and ‘proper’ translate, respectively, to ‘professionalism’ and ‘honesty’. But this interpretation is too narrow. Professionalism and honesty are part of the calculation, but are merely elements in a wider assessment, along with a series of other traits: reliability, safety, integrity, to give three examples. To summarise, using TfL’s words, the concern is that Uber lacks:

[C]orporate responsibility in relation to a number of issues which have potential public safety and security implications.

When this broad version of the ‘fit and proper’ test is applied to the four points raised by TfL in their Statement, the logic of TfL’s decision becomes clear.

The Grounds in TfL's Statement

Serious Criminal Offences

Uber’s ‘approach to reporting serious criminal offences’ is the first issue raised by TfL. As pointed out in Mulligan’s article, this is likely to refer to Uber’s policy of reporting complaints made against its drivers to TfL, rather than to the police directly.

Uber argue this is a policy to protect the identities of the allegers; to allow them to make the claims in their own right, without the company prejudicing the investigation or divulging their personal information. The police acknowledge this, but point out (1) that it has cause significant delays in investigating offences, including sexual assault, and (2) that when they have finally been made aware of claims, the police have found the allegers relieved to be contacted and fully cooperative with the investigations.

These are not minor points. One example came in 2016 when two public order offences were levelled against Uber drivers. These were reported to TfL but did not make it to the police for seven months. With time-limits of six months, the police were unable to follow up the claims. A second, more worrying, example concerns a driver who sexually assaulted a passenger in 2016. Uber reported the allegation to TfL, yet, without criminal investigation, he was allowed to remain in the job. Four months later, he sexually assaulted another woman, in a reportedly ‘more serious’ attack. In the words of Inspector Neil Billany of the Metropolitan police’s taxi and private hire team: “had Uber notified police after the first offence, it would be right to assume that the second would have been prevented.” The victim, in addition, was ‘strongly under the impression’ that Uber would contact the police on her behalf.

It is, at the very least, a questionable policy. It is also made suspicious by the fact that Uber only applies it to serious offences that might harm the company’s reputation. They report ‘low-level’ fraud directly to the police, but not allegations like those above made against their drivers. They are also strangely non-compliant, even once the police are involved – in one case refusing to release information about a passenger (the victim and crucial witness) to the police without formal requests submitted under the Data Protection Act 1998.

Medical Certificates and DBS Checks

The second and third points made by TfL in their Statement concern Uber’s approach to how medical certificates and Enhanced Disclosure and Barring Service (DBS) checks are obtained. This seems to relate to recent confusion over which companies TfL allows private hire operators to outsource their checks to. Previously, TfL accepted checks from a range of third party companies. Earlier this year, however, they decided only to accept those carried out by its own contractor, GBGroup. Uber, it seems, either failed to respond to this change quickly enough or failed to update their pre-existing checks once they had made the change.

The question here is not, as Mulligan asserts, whether or not Uber had an obligation to obtain these checks on behalf of their drivers. The drivers have to obtain the certificates themselves: Uber simply has to check they have done so. They also must be sure these checks came from the nominated source. In this case, TfL nominated an outlet; Uber failed to comply.

It is also worth noting one of the criteria outlined in TfL’s Guidance Notes for assessing whether a company is fit and proper – Health and Safety. Here, it is stated that:

If required, applicants must be able to show that they are complying with any requirements applicable to their premises, their staff or the public.

By failing to ensure their drivers were getting the appropriate checks, Uber have clearly not complied. By TfL’s own guidance notes, that indicates an unfit and improper organisation.

Greyball

The final point made by TfL concerns Uber’s purported use of Greyball technology. There is little evidence to go by here, so, as Mulligan points out, the main issue surrounds transparency between TfL and Uber. TfL were seeking clarity from Uber as to if and how they were using Greyball in London; Uber failed to provide it.

An Unhealthy Combination

Collectively, these points indicate a lack of transparency, an inability to follow the (admittedly bureaucratic) demands of the regulator, and a worrying intent to protect their business at the expense of public interest. Three of the four issues (excluding Greyball) related directly to public safety. It is easy to conclude that Uber was not fit and proper to be licenced as a taxi company.

Yet, even by applying Mulligan’s two-limbed test of professionalism and honesty, it is possible to reach the same conclusion. Failing to report crimes in the responsible manner or to follow the DBS and medical check guidelines reveal a poor professional attitude. The lack of transparency in the same criminal checks and the worrying use of Greyball point towards an opaque and dishonest relationship with the regulator.

Having concluded that Uber was not fit and proper, therefore, the question follows: was TfL’s response correct? Were they right not to renew Uber’s license, or should they have instead granted a short-term license with additional conditions attached?

TfL’s Response was Correct  

It was pointed out in the introduction that, according to TfL’s Guidance Notes, the purpose of the regulations are:

[T]o give Londoners confidence, when they use a licensed private hire operator, that they are dealing with an honest, professional organisation with safe drivers and vehicles.

Public safety is paramount. While it is at least conceivable that TfL would grant a licence to a safe organisation that was unprofessional, it is not conceivable that they would grant one to an unsafe organisation, regardless of how honest or professional they were. Faced with the failures around criminal reporting and background checks, and having concluded that Uber was unsafe, TfL had one option: to take Uber off the road.

It may be argued that a new licence with new conditions attached would enable Uber to operate under new safety standards, but enforcing this would be just as problematic as before. TfL have been communicating their concerns to Uber for a long time, yet Uber has done nothing. This, even though Uber knew their licence was coming to an end. Why would it be any different second time round? The punishment on the new licence would be the same punishment that existed on the previous one: revocation. If the threat of that punishment was not sufficient to change Uber’s ways last time, why would it be any different second time round?

It may also be argued that if safety concerns were so important, TfL would have used their powers under Section 17(2) of the PHV(L)A 1998 to immediately revoke Uber’s licence. Instead, they waited for the end of Uber’s license and opted not to renew it under an implied power that can be read into Section 3(3) of the PHV(L)A 1998. This is because, while safety concerns were paramount, they were not so pressing as to require the immediate revocation under Section 17(2) of the PHV(L)A 1998. Had they opted for the immediate power given by Section 17(2) of the PHV(L)A 1998, the argument that this was disproportionate would have more force.

Further Considerations: Proportionality and the Bigger Picture

There are two final considerations. First, by taking the non-renewal route, have TfL acted disproportionately? Second, is the ‘bigger picture’ relevant and how should it effect the decision?

Proportionality

Having filed their statutory appeal with Westminster Magistrates Court, this decision is no longer amenable to Judicial Review. Despite this, proportionality may still be a factor in the court’s decision-making.

Mulligan justifies his argument that the decision was disproportionate by distinguishing between breach of approach and breach of substance. Uber’s breaches, he proposes, lie in their approach towards the four points made by TfL, not in the substance of the allegations themselves. Since their failings lay in the lesser of these two (the approach), TfL should have opted for the less onerous of the two options available to them – a new license with strings attached.

However, this distinction is artificial: what is the substantial difference between a company’s approach to reporting criminal complaints and a company deciding not to report criminal complaints? What is the difference between Uber’s approach to explaining the use of Greyball in London and their failure to properly explain the use of Greyball in London?

The distinction also seems tautological. It has no statutory backing in the Act and is based on a confusing choice of words in TfL’s Statement. Yet, even if it did exist, it would have little relevance. Uber’s failures in each of the four points stated would still represent a breach both of approach and substance. Nor would it have any effect on the proportionality assessment. It would only apply to the fit and proper test – determining whether Uber had committed any material breach of their obligations. Once that has been determined, once the trigger of ‘not fit and proper’ has been made out, it would no longer apply.

Ignoring that distinction, however, it is still possible to look at proportionality. Here, the arguments made out above apply. This was a decision made in response to Uber’s opaqueness, their non-compliance with regulatory guidelines, and, most importantly, the public safety implications of their failings. The means of the decision—not renewing Uber’s license—was completely in line with the ends sought – to keep the public safe while taking taxis in London. Not only was this a proportionate decision, it was a necessary one.

The Bigger Picture

It is debatable whether or not the bigger picture should be considered when assessing TfL’s decision. Yet, if we do consider it, there are, as Mulligan points out, huge positives to a transparent and mutually cooperative relationship between Uber and TfL. But when Uber has failed to adhere to this for five years, how much patience should TfL have? An analysis of the bigger picture would recognise that, sometimes, decisions like this are required to focus a company’s resources onto something, in this case, compliance with London’s regulations.

There is one final point regarding the bigger picture. The service that Uber provides has become vital for millions of Londoners. Yet, Uber is not going anywhere. London is too big a market for them to lose. It will return to London’s market more transparent, more professional, and safer.  And, in case this prediction is wrong – suppose they cut their losses or suppose the additional restrictions are too big a burden for them – their departure would make room for new firms with similar business models that are prepared to stick to the regulations. Even if Uber goes, Uber’s service is here to stay.

Conclusion

TfL’s decision not to renew Uber’s licence was based on a concrete and reasoned application of a broad fit and proper test. Public safety was key to the assessment. Having deemed Uber unfit and improper, it had two options: to issue a new licence with conditions attached, or not to renew the license. It chose the latter with no regard for a distinction between approach and substance. It did so pragmatically, acknowledging that a tough stance was required and that a new, conditional contract would be idealistic and problematic to enforce. That decision was within TfL’s rights, was pursuing a legitimate aim, and was no more than was necessary to achieve that aim. It was the correct one.

For the latest articles straight to your inbox, you can subscribe for free. Alternatively, follow @KeepCalmTalkLaw on Twitter or Like us on Facebook.

Tagged: Gig Economy, Judicial Review, Public Law, Regulators, Technology, Uber

Comment / Show Comments (0)

Other Articles From The Uber London Licence Debate Series

Section Pick September

Cherry v AG for Scotland, Part I: Is a No-Deal Brexit Necessarily Implied?

Editors' Pick Image

View More

KCTL News

Keep Calm Talk Law: Moving Forward

3rd Sep 2019

Changing of the Guard: Moving Keep Calm Talk Law Forward

12th Aug 2018

An Anniversary or Two: Four Years of Keep Calm Talk Law

11th Nov 2017

Rising from the Ashes: The Return of Keep Calm Talk Law

18th Nov 2016

Two Years On, Keep Calm Talk Law’s Legacy is Expanding

11th Nov 2015

Twitter

Javascript must be enabled for the Twitter plugin to function. Click below to visit us on Twitter.

Free Email Subscription

Subscribe to Keep Calm Talk Law for email updates, and/or weekly roundups. You can tailor your subscription on activation. Both fields are required.

Your occupation / Career stage is used to tailor your subscription and for readership monitoring.

Uncheck this box if you do not want to receive our monthly newsletter.

By clicking the Subscribe button, you agree to our privacy policy and terms of service. Please ensure you read these in full.

Free Subscription