Per a CNBC report, Uber Technologies’ (UBER - Free Report) London license appeal case began this week and the company is expected to affirm that it has addressed concerns over safety issues.
Last November, Transport for London (TfL) revoked Uber’s license to operate in the U.K. capital, citing a “pattern of failures” which put passengers at risk. The TfL said that due to a glitch in Uber’s system, unauthorized drivers were able to upload their photos to other driver accounts and pick up passengers illegally in at least 14,000 trips. This was the second time that the company was denied a new license to operate in the city, the first being in 2017 on similar safety-related issues. After an initial court battle, the company was granted a 15-month license in 2018, and subsequently received a two-month license in September 2019.
Uber, which is fighting to win back this license again, is currently allowed to operate in London as long as the appeals process continues. To enhance safety measures, the company has introduced new features such as facial recognition and human reviewers for driver verification. Per Jamie Heywood, Uber’s regional general manager of Northern and Eastern Europe, “We have worked hard to address the TfL’s concerns over the last few months, rolled out real-time ID checks for drivers, and are committed to keeping people moving safely around the city.”
Uber’s appeal process, which started this Monday, will stretch till Thursday at the Westminster Magistrates’ Court. However, a ruling on the case may take some time. In the event of a negative ruling, the company will lose one of its most important international markets with roughly 45,000 drivers.
Apart from this London license case, Uber is embroiled in another legal battle in the United Kingdom, with its drivers wanting to be treated as workers with employment protections such as a minimum wage and holiday pay. Uber, which classifies drivers as independent contractors, has been appealing the case for years. A ruling on this is expected this year.
Zacks Rank & Key Picks
Uber carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Internet - Services space are ANGI Homeservices Inc (ANGI - Free Report) , Etsy Inc (ETSY - Free Report) and Shopify Inc (SHOP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While shares of Etsy and Shopify have surged more than 100% so far this year, ANGI Homeservices’ shares have rallied more than 40%.
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