Speaker 1: On Friday, Transport for London, which oversees that city's transit system,
Speaker 1: announced that Uber was not quote fit and proper to
Speaker 1: hold a private hire license, and the agency announced that
Speaker 1: Uber's license to operate in London will be revoked on September.
Speaker 1: London is one of Uber's largest and most lucrative markets,
Speaker 1: with about forty tho drivers and three and a half
Speaker 1: million regular users, according to the company, and Uber has
Speaker 1: said it will challenge the revocation in court. It's also said, though,
Speaker 1: that it is willing to make concessions to get its
Speaker 1: license renewed. Here to talk with us about London's action
Speaker 1: against Uber is Benjamin Edelman, a professor at Harvard Business School. UH. Benjamin,
Speaker 1: Uber's had a lot of battles with regulators around the
Speaker 1: world on various things. They've had all sorts of problems.
Speaker 1: Their CEO as host did this year. UM, why did
Speaker 1: London now conclude that this is a UH that they
Speaker 1: shouldn't have a four higher taxi license. Well, it's a
Speaker 1: combination of concerns, the very scandals that you reference. UH.
Speaker 1: Certainly London was concerned about gray Ball, the Uber function
Speaker 1: that was designed to and did block regulators from seeing
Speaker 1: what Uber was up to. Can't really have a second
Speaker 1: set of books to show the regulators versus what the
Speaker 1: real drivers see that didn't reflect well on them. There
Speaker 1: are concerns about safety, about reporting to the police. The
Speaker 1: overall concern is that Uber doesn't play by the rules
Speaker 1: and that maybe doesn't work so well in London. You
Speaker 1: can just barely get away with it in most U.
Speaker 1: S cities, but outside the United States sometimes the rules
Speaker 1: are taken a little more seriously. So Benjamin Uber has
Speaker 1: fought these battles not only in the United States but
Speaker 1: outside the United States. And it says it's going to
Speaker 1: appeal the regulator decision. It threatened to take the city
Speaker 1: to court, and it started a Twitter campaign and an
Speaker 1: online petition that already has more than seven fifty thousand signatures.
Speaker 1: What is the judicial process that it will have to
Speaker 1: go through? Well, formal judicial process looks a lot like
Speaker 1: what you'd expectet will be uh formally argued in court
Speaker 1: with lawyers for both sides. But at the same time,
Speaker 1: Uber follows its standard playbook and trying to turn this
Speaker 1: into a political contest all but a popularity campaign. Can
Speaker 1: we get more Twitter fans than you and if that's
Speaker 1: the test, if that actually made the difference, Uber surly
Speaker 1: would win. The amazing thing is that, of course the
Speaker 1: regulators feel that pressure. Mayor of London is going to
Speaker 1: feel pressure from his constituents and ultimately it's hard for
Speaker 1: him to do the opposite of what the voters want.
Speaker 1: So are there things Uber might be able to do
Speaker 1: besides pressuring the regulators to get them to change their
Speaker 1: minds here absent going to court. Certainly Uber has made
Speaker 1: changes in specific jurisdictions where so required by capable regulators.
Speaker 1: You look at what Uber had to do in Singapore.
Speaker 1: In Singapore, the government insisted from the outset that every
Speaker 1: vehicle used to provide commercial service needed to have commercial registration.
Speaker 1: The driver needed to have commercial driver's license, and so
Speaker 1: Uber did it the opposite of what they did in
Speaker 1: the United States, of course, where the drivers are all
Speaker 1: using regular driver's licenses in regular non commercial cars. In Singapore,
Speaker 1: they had to do what the government wanted, and they
Speaker 1: did so. Benjamin, what would be the biggest issue as
Speaker 1: this is appealed? Would there be one that stands out?
Speaker 1: If I were Uber, I'd probably be challenging the order
Speaker 1: as arbitrary as insufficiently linked to specific problems. I'd say
Speaker 1: that gray ball was a technique used in other jurisdictions
Speaker 1: but never used in London. So what's the big deal.
Speaker 1: On the flip side, London will say, look, we're assessing
Speaker 1: your character as a company. You're a company with unfit character.
Speaker 1: This series of scandals reveals something about your corporate personality
Speaker 1: and that's not the kind of company we want operating
Speaker 1: on our streets. Taxpayers pay for the streets, and taxpayers
Speaker 1: don't want you. They're actually both pretty good arguments, and
Speaker 1: it's almost like two ships crossing in the night. Well, Benjamin,
Speaker 1: you know London is a pretty big market, but Uber
Speaker 1: is a very big company around the world. How big
Speaker 1: a hit is this to Uber not to be able
Speaker 1: to operate in London assuming this gets upheld right, Well,
Speaker 1: London is one thing, but you've got to think about
Speaker 1: the other countries that might look to London's example. They
Speaker 1: see Uber all but banned from so many places in Germany,
Speaker 1: and how about London, And you think about the situation
Speaker 1: in Tokyo, which has been an awfully tough market for Uber,
Speaker 1: and China of course off the table after the company
Speaker 1: all but gave up there. Well, it's a series of
Speaker 1: disappointments and defeats for Uber that ultimately add up to
Speaker 1: something more than some of the parts. And Bannon just
Speaker 1: about thirty seconds. Does it seem to you as if
Speaker 1: Uber is handling this a little bit differently from other
Speaker 1: confrontations and cities where you have that open letter saying
Speaker 1: you have my commitment that will work with London to
Speaker 1: make things right, to keep the city safe. Right, the
Speaker 1: Uber of a year ago wouldn't say on the first
Speaker 1: day that they're prepared to come impromise. The Uber of
Speaker 1: a year ago would fight, fight, fight to the death.
Speaker 1: And that's not the strategy they're taking now. Well, so
Speaker 1: they have I mean they have one. In other places
Speaker 1: they seemed to indicate they were going to go to
Speaker 1: court right away. Do you think it's going to end
Speaker 1: up being more of a negotiation that gets them back
Speaker 1: in here or are they really going to have to
Speaker 1: fight in court? We've got about thirty seconds right. The
Speaker 1: ultimate question is whether the regulators, who hold all the
Speaker 1: all the power here, whether they'll accept what Uber comes
Speaker 1: to offer. Will the regulators feel compelled when when voters
Speaker 1: citizens signed petitions, doesn't matter Can you petition your way
Speaker 1: out of a parking ticket? If I parked in front
Speaker 1: of a fire hydrant? Can I get all my friends
Speaker 1: to sign up and say I shouldn't have to pay?
Speaker 1: I don't think that would work very well for me,
Speaker 1: and the fire hydrant can uber somehow by having more
Speaker 1: friends get itself out of the kind of trouble that
Speaker 1: they're in. Maybe it's worked in other places that worked
Speaker 1: right here in Boston, so maybe it'll work in London.
Speaker 1: To our thanks to Benjamin Element of Harvard Business School,