London over for Uber?

London over for Uber?

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Ride-sharing giant Uber is fighting to retain its London operating licence in the city after officials at Transport for London ruled it was not a ‘fit and proper’ provider. The company’s existing licence will expire at end-September, though Uber can operate for as long as the appeal process lasts.

However, the company’s tax position has now come under scrutiny as it has been revealed that it funnels all UK rides through a Dutch subsidiary, enabling it to avoid charging VAT charges levied in the market and offer cheaper fares. TfL board member Michael Liebreich says he does not understand how Uber’s services can be London-based for the purposes of transport legislation, yet non-UK based with regard to taxation, reports the FT.

TfL is also concerned about Uber’s use of its Greyball software which uses geolocation, credit card, social media and other data to identify individuals the company believes work for city agencies and are looking to check up on Uber rides.

Earlier this week, Uber announced that it planned to shutter operations in Quebec province on 14 October, citing too-onerous regulation. The company is reacting to city officials’ move to demand that drivers have 35 hours of training (as per regular can drivers) and insistence on background checks being performed by police rather than via a private company.

Technophiles are painting London and Quebec’s attempts to rein in Uber as an attack on innovation while the city is clearly looking to stop what it considers aggressive and inappropriate behaviour. However, Uber’s market position has not been built on innovative technology but on leveraging billions of Silicon Valley dollars to aggressively force traditional cab services out of the market while flouting regulations. The strategy is clearly to build local monopolies that can then hike fares, not to wow the world with its technical disruptive muscle.

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