London Mayor Calls on U.K. Government for Right to Cap Uber and Others

August 15, 2018, 11:29 PM UTC

The mayor of London, Sadiq Khan, asked the U.K.’s transport minister for the right to cap Uber and other ride-sharing vehicles in the city. Khan cited the unchecked growth in for-hire vehicles, from 60,000 to 110,000 between 2011 and 2018, as congesting the city, polluting the air, and preventing drivers from making a living. Uber contractors drive most of the new vehicles. Traditional black taxis have dropped from 24,000 to 23,000 during the same period.

Khan cited the recent New York City legislation to cap vehicle registrations for ride-hailing vehicles booked by apps passed last week and signed by Mayor Bill de Blasio on Tuesday. However, Khan and the government of Greater London lack the legal right to pass such a cap.

The cap in New York may lead to fewer ride-hailing vehicles on its roads, due to attrition of the number of drivers who stop driving for Uber and its competitors over time. However, the new legislation requires a minimum wage to be set at over $17 an hour, which exceeds what all but 15% of NYC drivers take home today, and which may be an incentive for people to continue driving.

London’s mayor chairs the sprawling Transport for London (TfL) system that operates underground and overground trains, buses, trams, and other modes, and licenses for-hire vehicles. Earlier this year, TfL issued new rules to protect drivers by limiting the number of hours they may work, which would ostensibly reduce the number of vehicles on the road, rising demand. But it’s also issued licenses to new operators and to new vehicles.

Uber faced having its license to operate in London revoked, but recently won a 15-month probationary renewal. As part of Uber’s make-nice campaign following the aggressive, sometimes allegedly illegal or unethical pursuit of growth and markets by the firm under ousted company founder, Travis Kalanick, the company has taken a milder tone in London. In a statement following the release of Khan’s letter, Uber said it had addressed pollution and congestion, but didn’t mention driver pay. “Already more than half of the miles traveled with Uber are in hybrid or electric vehicles,” the company said.

London black taxi drivers undergo the most rigorous test in the world, memorizing “The Knowledge,” a literal street-by-street and turn-by-turn understanding of the metropolis’s 25,000 byways and all its vagaries: too-narrow streets, temporary detours, places always clogged with pedestrians. Drivers claim their knowledge coupled with driving experience is better than navigation and traffic apps. Despite occasional stunt tests for media, the truth hasn’t been rigorously established.

The Wall Street Journal obtained recent financial data from Uber, which remains privately held and thus isn’t subject to much public scrutiny. The company’s gross bookings—revenue taken in—continues to grow even as it has faced competition or even paused or left some markets, rising from $8.5 billion in the second quarter of 2017 to $12 billion in the same period in 2017, a gain of over 40%. It’s share rose from $1.7 billion in the year-ago second quarter to $2.8 billion in 2018, a jump of over 60%. After all expenses and costs are figured in, the company lost $891 million in the most recent quarter, but that’s good news: it’s a smaller loss by nearly 20% year over year.

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