“There is a high cost to a bad reputation”: that was new Uber CEO Dara Khosrowshahi’s response to his employees, as British capital London became the highest profile city to refuse to license the ride-hailing firm.
It was a tactical statement, one meant to draw a rhetorical line between Khosrowshahi’s tenure and that of his predecessor Travis Kalanick. Khosrowshahi’s remit has been, from the start, to distance Uber from its past misdemeanors. How he performs against an antagonistic metropolis, led by a charismatic and popular mayor, could be an early defining moment in his post.
Yesterday government agency Transport for London (TfL) announced it would not be renewing Uber’s license to operate after September 30, shocking consumers and industry heads across the world. It is a boost to minicab drivers and the roughly 21,000 black cabs that, despite their iconic status, have faced an existential threat in Uber – which says it has 40,000 drivers and ferries roughly 3.5m people who use its app.
“TfL’s regulation of London’s taxi and private hire trades is designed to ensure passenger safety,” read the body’s statement. “Private hire operators must meet rigorous regulations, and demonstrate to TfL that they do so, in order to operate. TfL must also be satisfied that an operator is fit and proper to hold a licence.”
That satisfaction, relating to security, medical certificates and driver screening, was not met. London mayor Sadiq Khan, who enjoys considerable popularity amongst Londoners, stressed that the city remains committed to “innovation and new technology.”
But, he added, “all companies in London must play by the rules and adhere to the high standards we expect – particularly when it comes to the safety of customers. Providing an innovative service must not be at the expense of customer safety and security.”
Uber is facing a minor crisis in Europe, as its market share in other regions is threatened by monied local players like Grab, Careem and Lyft. Bulgaria, Denmark, Italy and Hungary have all made moves to ban it domestically. And protests in cities like Paris, Madrid, Brussels and Berlin have enjoyed political backing.
Khosrowshahi struck a contemplative chord in his employee memo following the London decision. “While the impulse may be to say that this is unfair, one of the lessons I’ve learned over time is that change comes from self-reflection,” he wrote. “So it’s worth examining how we got here.
“The truth is that there is a high cost to a bad reputation,” added Khosrowshahi. “Irrespective of whether we did everything that is being said about us in London today (and to be clear, I don’t think we did), it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another.”
Uber’s new CEO, then, is attempting to widen the divide between himself and Kalanick, whose track record of sexism, employee abuse and off-hand statements became too much for the company’s board to take. In the meantime, Uber has launched an appeal against TfL’s license non-renewal – which means its drivers will not disappear from London streets overnight.
It is, however, a key moment for Khosrowshahi and the San Francisco tech giant. Given concerns, it is unlikely that a defiant tone will reap many benefits. If the new CEO can put across his case that Uber can be a key and cooperative partner with its host cities, Khosrowshahi may be able to steer his slow ship of reputation in the right direction.
It will take a lot of time, and sensitivity. But his London memo suggests that Khosrowshahi sees the wood for the trees.