GOPALAN: After London’s Uber Decision, American Regulators Should Wake Up

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Sandeep Gopalan Contributor
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Uber has been found to be “not fit and proper” to operate in London, one of its most lucrative markets, and its license has not been renewed. If Uber is not safe enough for Londoners, why should the company’s services be acceptable for the United States? American regulators need to buckle up and shift into gear. Here’s why.

To recall, Uber has a well-publicized history of conflict with the transport regulator in London. It began a probationary two-month license period in September 2019. The Nov. 25 decision issued by Transport for London (TfL) was keenly awaited worldwide.

The decision stated that whilst Uber had made a number of safety improvements addressing concerns, there was “a pattern of failures by the company” that posed a serious risk to passenger safety. Of specific import to this decision, TfL found that unauthorized drivers were able to upload their photos to Uber’s system and pick up passengers posing as authorized drivers.

Apparently, the flaw in the system allowed an authorized Uber driver’s account to be used by unscrupulous unauthorized actors, meaning that the driver picking up a passenger may not have been vetted by Uber at all. Regulators found that this has occurred on at least 14,000 trips. And, ‘some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked.’

What’s worse, suspended or dismissed drivers could simply create another account with Uber and be back on the road — seriously imperiling passenger safety. This is a terrifying finding — people who Uber had deemed to be unsuitable after passenger complaints or investigations and sacked were allowed to re-enter the company by the simple expedient of a new account. It is befuddling that Uber would not be able to catch those who it had suspended or dismissed and deny them re-entry. As regulators noted, ‘Uber’s systems seem to have been comparatively easily manipulated.’

Regulators also identified problems with insurance — Uber apparently allowed uninsured or inadequately insured vehicles to carry passengers.

In the end, TfL’s independent investigation concluded that it ‘currently does not have confidence that Uber has a robust system for protecting passenger safety, while managing changes to its app.’

Uber CEO Dara Khosrowshahi’s response was typical for the company. He tweeted: “We understand we’re held to a high bar, as we should be. But this TfL decision is just wrong. Over the last 2 years we have fundamentally changed how we operate in London. We have come very far — and we will keep going, for the millions of drivers and riders who rely on us.”

So, is Uber being deemed insufficiently “fit and proper” just another instance of the old British nanny state gone mad? Or are Americans being exposed to risks that Londoners won’t put up with? Should Americans worry that their regulators are asleep at the wheel?

A plain reading of the findings suggests that Uber’s driver authentication and verification systems are lacking. While the company appears to have addressed previous concerns about keeping drivers with criminal records off the streets, the ability of unauthorized drivers to upload their photos on to approved drivers’ accounts makes a mockery of Uber’s screening and approval process. And the idea that the driver who shows up to collect a passenger may not be purportedly approved or subjected to any vetting is plainly terrifying. Equally, the ability of dismissed drivers to return to the ranks and collect passengers by creating new accounts undermines all confidence that Uber truly cares about passenger safety.

The apprehensions about passenger safety are not “wrong,” with due respect to Uber’s CEO. What’s wrong, however, may be the decision not to renew Uber’s license. That appears to be overkill — either motivated by nanny-statism, or more likely, by the aggressive lobbying campaign orchestrated by London’s notoriously expensive Black cabbies. Uber could have been required to work with regulators to address safety concerns and improve its driver authentication practices. It could have been subjected to enhanced ongoing scrutiny with the expectation of changing behavior, because regulators did acknowledge the company’s willingness to cooperate and make improvements.

Americans can learn from the British action — our Uber passengers are not expendable and their lives are worth just as much as those of Londoners. Whilst we don’t need to import the nanny state, regulators need to ensure that Uber is screening its drivers appropriately and that the driver who shows up when a ride is booked is the person he is purporting to be. Passengers need to know that sham accounts are not being used by unverified drivers, criminals, and those dismissed for prior violations. And that vehicles are appropriately insured, that drivers are licensed, and that the company has robust practices designed to protect riders.

Critics will cavil that these risks also exist with taxis and that regulating Uber will stymie innovation. However, innovation and regulation are not mutually exclusive — good regulation and oversight are essential for innovation to thrive. Uber, deservedly celebrated for innovation, is also the poster-child for why regulation is necessary. Its reckless approach to safety and callous approach to regulation — illustrated across the spectrum from its self-driving car program to passenger safety for app users — have the potential to destroy the very benefits it touts for consumers.

If passengers lose trust, they will stop using the product and we will return to the mercy of the taxi industry. American regulators should demand better passenger protections here; otherwise every ride is a safety lottery.

Sandeep Gopalan (@DrSGopalan) is vice chancellor at Piedmont International University in North Carolina. He was formerly a professor of law and pro vice chancellor for academic innovation at Deakin University in Melbourne, Australia. He was also co-chairman or vice chairman of American Bar Association committees on aerospace/defense and international transactions, a member of the ABA’s immigration commission, and dean of three law schools in Ireland and Australia. He has taught law in four countries and served as a visiting scholar at universities in France and Germany.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.