20 Sep MPs write to TfL ahead of Uber license decision as company may face £2.9 million fee to operate

Controversial company Uber may have dodged a bullet as news emerges that may have its license renewed in London on the condition that it pays a large fee.

Transport for London have announced that companies with more than 10,000 vehicles would pay £2.9 million for a license under a new multi tiered system. This contrasts hugely with the £3000 it initially paid in 2012 for its five year license to operate in London, which was extended by four months in May ahead of a decision on its future.

The decision on its future was delayed until the end of this month due to the many controversies surrounding the company but industry observers have suggested this new increase in costs may be a trade off with the company, which employs very well connected figures in Westminster.

TfL’s General Manager of Taxi and Private Hire Helen Chapman said: “There has been a huge growth in the industry in recent years and it is only fair that the licence fee reflects the costs of regulation and enforcement.”

“The changes to fees will help us fund additional compliance officers who do a crucial job cracking down on illegal and dangerous activity,” she said.

The number of PHV drivers in London has almost doubled to more than 116,000 which TfL says has spurred the decision.

Last week several MPs wrote a letter calling for Uber’s license not to be renewed, saying the company was not a ‘fit and proper operator’ and criticising its record on safety and working conditions. This was backed up by a hundred thousand strong petition handed to TfL saying they must ‘improve workers’ rights or “get out of London” ahead of the decision being made on the company’s future.

The cross-party group led by Labour MP Wes Streeting wrote a letter to Transport for London (TfL) urging it not to renew Uber’s license when it comes up for renewal at the end of September.

The main focus of their letter was the company’s failure to report sex attacks on passengers by drivers. The ten Labour, Lib Dem and Conservative MPs said Uber was an ‘unfit and improper operator’ after police accused it of failing to report attacks.

In his letter to TfL Commissioner Mike Brown Mr Streeting said,

‘The safety of Londoners must be at the forefront of decisions taken about the taxi and private hire industry in our capital city. We do not believe that Uber has shown itself to be a fit and proper operator.’

It comes after the Metropolitan Police accused Uber of failing to reveal at least six sex attacks and an assault. Inspector Neil Billany accused Uber of being selective about the crimes it reported, only telling police about ‘less serious matters’.

As we have previously reported on our news page, there have also been questions raised about the level of tax paid by the company and the loopholes it uses which mean its drivers are 20 per cent cheaper, despite the company saying it does not employ them. A ruling last October said that its drivers were entitled to basic employment rights such as holiday and sick pay – a decision which the company is appealing.

The US company is facing claims it has avoided paying an estimated £40million in VAT by exploiting a legal but controversial loophole where it is based in the Netherlands, because VAT is a tax controlled by regulations from the EU.

Taxi-hailing smartphone apps are supposed to pay 20 per cent VAT on booking fees but by treating its 40,000 UK drivers as self employed the drivers can avoid VAT because they earn less than the £85,000 required to be VAT registered.

Reuters calculated the cost to the Treasury could be at least £40 million a year which, according to calculations by think tank the King’s Fund, could fund the whole NHS for over a day or pay for over 10,000 nurses for a year.

Politicians claim the practice is giving Uber an unfair advantage. The firm also cuts its taxes by channelling profits to the Netherlands.

In his letter, Mr Streeting, chairman of the All Party Parliamentary Group on Taxis, added: ‘Competition in the taxi and private hire industry is welcome, but it must be on a level playing field and the safety of passengers must be paramount.