More trouble for ride hailing company Uber Technologies Inc. (NYSE:UBER)
The transit authority in London, England – one of the world’s biggest cities – has refused to grant Uber a new licence to operate, jeopardizing the company’s future in the United Kingdom.
The British transit regulator says it is concerned that unauthorized drivers can manipulate the app to carry passengers, it said in a statement. Uber has 21 days to appeal and can continue to operate while a magistrates’ court considers the decision.
London is one of the most lucrative cities for Uber outside of the U.S. Uber shares dropped about 6% in early trading before U.S. markets opened. The regulator’s refusal to sign off on Uber’s operations throws doubt over whether the company, which has 45,000 licensed London drivers, has any significant future in Britain.
The London transit authority concluded more than two years ago that Uber wasn’t “fit and proper” to hold an operating license, saying the company failed to do adequate background checks on drivers and report serious criminal offenses. It also took issue with Uber software called “Greyball” that blocked government officials attempts to catch lawbreaking drivers.
Uber has also faced a series of lawsuits in London, including an employments rights case over how its drivers are treated, which the company lost earlier this year.