Ridesharing is again under the spotlight in London – after Uber wins its appeal to operate in the UK capital, its rival Ola is now deemed not fit and proper

8 October, 2020

When regulator Transport for London (TfL) made its Nov-2019 decision not grant Uber London Limited a new private hire operator’s licence to serve the UK capital its rivals moved quickly to sign up drivers in London to build market share in the city.

Among these was Indian ride hailing company Ola which at the time was plotting its own launch in the UK capital having made its debut in the country the previous year. The company had already been granted a licence by TfL and in Nov-2019 invited tens of thousands of drivers to join its platform, launching in the city in Feb-2020.

Founded in India at the start of the last decade, Ola, which is actually backed by Uber investor SoftBank, operates more than one billion customers rides a year across 250 cities as the world’s third largest ride-hailing app. It launched in the UK in 2018 across South Wales and the South West of England as the UK’s first ride-hailing app for both private hire vehicles and metered taxis.

Fast forward back to today and just weeks after Uber successfully won its appeal against the TfL’s ruling and it has emerged that Ola has been refused an extension to its own licence in London after regulators found it was not “fit and proper” – the same accusation made of Uber – after discovering "a number of failures that could have risked public safety”.

Ironically, at the time of Uber’s own troubles with TfL, Ola touted its own safety features as a key differentiator from other competitors when it outlined its own development plans. The company said it deploys facial recognition technology to authenticate its drivers. A key factor behind TfL’s decision to ban Uber was its failure to ensure passenger safety. “We have built a robust mobility platform for London which is fully compliant with TfL’s high standards,” Simon Smith, Ola’s head of international, confirmed at the time.

However, the company recently made TfL aware of “a number of failures that had potential public safety consequences”. These included historic breaches of the licensing regime that led to unlicensed drivers and vehicles undertaking more than 1,000 passenger trips on behalf of Ola and the failure to draw these breaches to TfL's attention immediately when they were first identified.

Ola’s UK managing director Marc Rozendal say the company has been working with TfL during the recent review period and has “sought to provide assurances and address the issues raised in an open and transparent manner".

Like Uber, Ola has a legal right to appeal the decision to a magistrates' court within 21 days – which Mr Rozendal confirms it will do so – and can continue to operate pending the outcome of any appeal process, albeit Helen Chapman, TfL's director of licensing, regulation and charging has said TfL will “closely scrutinise the company to ensure passengers safety is not compromised”.

“Our duty as a regulator is to ensure passenger safety. Through our investigations we discovered that flaws in Ola's operating model have led to the use of unlicensed drivers and vehicles in more than 1,000 passenger trips, which may have put passenger safety at risk,” she confirmed as the decision behind the not fit and proper claim on Ola.

The Corporate Travel Community (CTC) reported last month how Westminster magistrates court ruled in favour of Uber in its appeal against TfL after hearing three days of arguments earlier in the month. The deputy chief magistrate, Tan Ikram, said he had “sufficient confidence” that Uber London Ltd “no longer poses a risk to public safety … despite historical failings”. He acknowledged especially that Uber had tightened up review processes to tackle document and insurance fraud and it now “seems to be at the forefront of tackling an industry-wide challenge”.

Our report, ‘Uber wins its London licence appeal as it is deemed ‘fit and proper’ to operate in the UK capital after TfL banned ride-hailing service over safety concerns, but London’s Mayor is watching closely’, also noted though that Uber will be will remain closely monitored for any future failings.

The mayor of London, Sadiq Khan, said: “I can assure Londoners that TfL will continue to closely monitor Uber and will not hesitate to take swift action should they fail to meet the strict standards required to protect passengers.”