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| Q&A: Uber court case in London | Q&A: Uber court case in London |
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| A high court judge has ruled that Uber has been acting legally in London, one of its most successful markets, for the past three years. The ride-hailing app firm, which is worth up to $50bn (£32bn), could have been forced to make major changes to its app should Lord Justice Ouseley have decided, as rivals claimed, that it has been used as a meter. Under current legislation only black-cab drivers are allowed to use taximeters to calculate fares, giving them the potential to charge more in the event of traffic hold-ups or roadworks. | |
| Related: Uber wins high court case over taxi app | |
| What is Uber and how does it work? | What is Uber and how does it work? |
| Uber is a company that operates an app connecting drivers and passengers directly. The app detects a passenger’s location and then connects the customer with the nearest Uber-registered driver. The app gives the passenger a price estimate and the fare is paid via a cashless account to Uber rather than to the driver. | Uber is a company that operates an app connecting drivers and passengers directly. The app detects a passenger’s location and then connects the customer with the nearest Uber-registered driver. The app gives the passenger a price estimate and the fare is paid via a cashless account to Uber rather than to the driver. |
| Who owns Uber and what is it worth? | Who owns Uber and what is it worth? |
| Uber is backed by a number of high-profile investors, including the investment bank Goldman Sachs, the Chinese search engine Baidu, Californian venture capital firm Menlo Ventures, tech giant Microsoft, the Amazon founder Jeff Bezos, Uber chief executive and co-founder Travis Kalanick, the Qatar Investment Authority and Google. When it revealed plans earlier this year to raise $1.5bn to $2bn in new funding, it did so at a price that valued the company at $50bn or higher. | Uber is backed by a number of high-profile investors, including the investment bank Goldman Sachs, the Chinese search engine Baidu, Californian venture capital firm Menlo Ventures, tech giant Microsoft, the Amazon founder Jeff Bezos, Uber chief executive and co-founder Travis Kalanick, the Qatar Investment Authority and Google. When it revealed plans earlier this year to raise $1.5bn to $2bn in new funding, it did so at a price that valued the company at $50bn or higher. |
| Why did Transport for London (TfL) seek a high court ruling about whether Uber was breaking the law in London? | |
| Since Uber started operating in London in 2012, the capital’s transport regulator, TfL, has judged that its app is not masquerading as a meter, which is the preserve of the more tightly regulated black-cab operators. Private hire vehicles are barred from using meters. The transport authority backed Uber’s right to operate in the city, using its app, over the fierce objections of London’s 25,000 black-cab drivers and the existing minicab industry. In recent months, the climate has changed and TfL has initiated a consultation process which could result in a regulatory clampdown on Uber. It also decided to defer to a court its decision over whether Uber’s app is legal or not. That was the subject of Friday’s ruling. | |
| Why does the meter matter so much? | Why does the meter matter so much? |
| Black-cab drivers are the only taxi operators allowed to use meters in London, in recognition of the fact that they have trained hard to learn the roads in the capital and are therefore trusted to take the quickest route to a passenger’s destination. They argue that the Uber app, which calculates a fare, is effectively a meter. The key privilege of a meter is that it protects drivers from traffic congestion and other delays – by ticking over while the vehicle is stationary – but there are fears it could be knowingly abused by drivers who take longer routes to a destination. | Black-cab drivers are the only taxi operators allowed to use meters in London, in recognition of the fact that they have trained hard to learn the roads in the capital and are therefore trusted to take the quickest route to a passenger’s destination. They argue that the Uber app, which calculates a fare, is effectively a meter. The key privilege of a meter is that it protects drivers from traffic congestion and other delays – by ticking over while the vehicle is stationary – but there are fears it could be knowingly abused by drivers who take longer routes to a destination. |
| What’s the difference between a black-cab and an Uber driver? | What’s the difference between a black-cab and an Uber driver? |
| A black-cab driver has taken the Knowledge, which involves driving around London for several years memorising all the roads and routes, giving them a unique grasp of the capital’s streets and ways to navigate them. Black-cab drivers have their vehicles checked and are regulated by TfL. Uber drivers, of which there are now 18,000 in London, are less highly regulated but they are rated by passengers. Around 1 million people in London are estimated to have signed up to be Uber passengers. | A black-cab driver has taken the Knowledge, which involves driving around London for several years memorising all the roads and routes, giving them a unique grasp of the capital’s streets and ways to navigate them. Black-cab drivers have their vehicles checked and are regulated by TfL. Uber drivers, of which there are now 18,000 in London, are less highly regulated but they are rated by passengers. Around 1 million people in London are estimated to have signed up to be Uber passengers. |
| Why do black-cab and minicab drivers dislike Uber? | Why do black-cab and minicab drivers dislike Uber? |
| Uber’s rivals don’t like business being taken away from them and they argue that Uber has entered the market without strict enough regulations, enabling them to undercut their competitors on fares. They also say that by diverting its revenues via Holland, Uber is not paying its fair share of UK tax, and this also gives the business a cost advantage. | Uber’s rivals don’t like business being taken away from them and they argue that Uber has entered the market without strict enough regulations, enabling them to undercut their competitors on fares. They also say that by diverting its revenues via Holland, Uber is not paying its fair share of UK tax, and this also gives the business a cost advantage. |
| Uber argues that regulations should be reduced across the board and that it is a startup company which will pay more taxes if and when it becomes profitable. | Uber argues that regulations should be reduced across the board and that it is a startup company which will pay more taxes if and when it becomes profitable. |
| Related: From Rio to Paris - Uber is fighting battles across the globe | Related: From Rio to Paris - Uber is fighting battles across the globe |
| Where else is Uber having problems and why? | Where else is Uber having problems and why? |
| Uber’s offices have been raided in Amsterdam, two of its executives have been charged with criminal offences in France, and one of its services, the cheaper Uberpop, has been banned in Berlin, Delhi, Seoul, Madrid and Rio de Janeiro. Accusations include predatory pricing, offering illegal and possibly unsafe taxi services and breaching competition rules. | Uber’s offices have been raided in Amsterdam, two of its executives have been charged with criminal offences in France, and one of its services, the cheaper Uberpop, has been banned in Berlin, Delhi, Seoul, Madrid and Rio de Janeiro. Accusations include predatory pricing, offering illegal and possibly unsafe taxi services and breaching competition rules. |
| Earlier this month, Boris Johnson, the previously Uber-friendly mayor of London, accused the firm of “systematically breaking the law” in the way it used its app technology to effectively hail a taxi, a process only black cabs are legally allowed to carry out. | Earlier this month, Boris Johnson, the previously Uber-friendly mayor of London, accused the firm of “systematically breaking the law” in the way it used its app technology to effectively hail a taxi, a process only black cabs are legally allowed to carry out. |
| Will legal cases like this hamper Uber’s growth? | Will legal cases like this hamper Uber’s growth? |
| Inevitably the high court case in London and the controversies around the world divert resources from the day-to-day business of increasing Uber’s market share. But any tech-based company that is in the business of disrupting existing markets will have factored in a certain amount of fightback. | Inevitably the high court case in London and the controversies around the world divert resources from the day-to-day business of increasing Uber’s market share. But any tech-based company that is in the business of disrupting existing markets will have factored in a certain amount of fightback. |