EXCLUSIVE: Uber's enemies have hired a huge law firm to get it banned in London - here are its 5 arguments
Black cab drivers hate Uber, which undercuts them on price and they claim the ride-hailing app is given favourable treatment by London's transport regulator, Transport for London (TfL).
Trade body the London Private Hire Car Association (LPHCA) has been putting pressure on TfL to crackdown on Uber and Business Insider has seen documents that show the LPHCA has drafted in heavyweight, "Magic Circle" law firm Clifford Chance to present a legal case to get the taxi app banned in London.
Copies of evidence submitted to the Greater London Authority's Transport Committee by private hire car operator Addison Lee as part of an ongoing consultation on taxi regulation in London have been passed to Business Insider. The submission includes evidence submitted to TfL by the LPHCA in June.
The LPHCA, which represents 15,000 minicab drivers in the capital, and Clifford Chance call for an immediate ban on Uber in the app until big changes are made that could cripple its business model.
"We're not surprised by the points raised in the LPHCA submission," Uber said when reached for comment. "These accusations are simply repetitions of previous complaints, all of which have been addressed numerous times."
Here's a summary of the big five arguments the LPHCA makes against Uber.
1. Uber doesn't have valid insurance
Uber requires individual drivers to ensure their cars themselves, rather than hold a fleet-wide insurance policy as is the norm in London. The taxi industry argues that this means Uber is putting public safety at risk, as it can't guarantee all its drivers are insured.
The LPHCA uses a Schrodinger's Cat-style argument to say that this is inadequate: because Uber only checks documents when driver signs up, LPHCA claims Uber can't prove at all times that its drivers are insured. They could have cancelled their policy since signing up. Though there is no evidence that this is the case.
The industry also argues that because TfL allows Uber to operate without fleet-wide insurance, Uber gets an unfair price advantage as these policies are costly.
And by passing the saving on to the customer but still requiring the driver to buy a policy, the taxi industry argues drivers are being incentivised to cut corners on insurance to save money.
Here's Clifford Chance, on behalf of the LPHCA: "Uber's operating model facilitates and encourages increasing numbers of uninsured drivers onto the streets of London by allowing drivers to cancel their policies after registration with Uber."
The taxi body argues that the checks on these documents are flawed in the first place, pointing to a report in The Guardian on the ease of tricking the system with faked documents.
2. Uber doesn't pay tax like it should
Uber processes its UK fares through Dutch subsidiary Uber BV, meaning it gets around charging customers UK VAT at point of sale.
By processing revenue through Uber BV, the company also pays a lower rate of corporation tax. Taxi companies say this tax set-up gives Uber another unfair advantage. This issue has already been referred to the UK taxman, HMRC, which is probing Uber's tax set-up.
Business Insider has highlighted Uber's tax set-up before. A spokesperson for Uber told Business Insider at the time: "Uber complies with all applicable tax laws, and pays taxes in all the jurisdictions it operates in, including the UK."
3. It's unsupervised and unsafe
The LPHCA tells the Transport Committee in its submission (emphasis ours):
As a direct consequence of the flaws in Uber's operating model Uber drivers loiter, ply for hire, park illegally and create a public nuisance in areas of high demand such as at airports and stations, undermining London's profile as one of the safest taxi markets in the world.
Clifford Chance backs this up with some recorded complaints:
And because jobs are routed through Holland, Clifford Chance argues "those service elements are beyond effective regulation by TfL," which again it claims is in breach of the law.
4. Driver and passenger data isn't safe
The LPHCA claims Uber "fails to take seriously its obligations to protect customer and driver data."
Clifford Chance points to reports of Uber accounts being hacked, such as a data break in February that left 50,000 driver details exposed, and says Uber London is not registered in the UK as a data controller, another breach.
5. Uber's flaunting the law
The LPHCA accuses Uber of "knowingly, willingly and intentionally flouting local regulation for profit in France, Germany, Belgium, Italy and the Netherlands - almost every European market in which it operates."
Uber founder Travis Kalanick advocates a strategy of "principled confrontation" with regulators and lawmakers around the world, according to an interview with Vanity Fair.
Clifford Chance says also: "Uber London fails to record destination information as required under the Act, undermining an important feature of the private hire framework in London designed to protect the public."
'The risks are increasingly clear'
As the battle progresses, neither either side looks close to backing down.
A spokesperson for Uber told Business Insider over email:
We're not surprised by the points raised in the LPHCA submission. These accusations are simply repetitions of previous complaints, all of which have been addressed numerous times. In the UK Uber abides by all private hire regulations and tax requirements, and in London is fully licensed and regulated by TfL. Over the last few days we have seen overwhelming support for Uber, with over 120,000 Londoners signing a petition to keep the service as it is.
Uber mobilised its huge customer base in London in response to the draft TfL changes, gathering 90,000 signatures on an online petition within just 24 hours.
Clifford Chance and the LPHCA, meanwhile, are both calling for Transport for London to immediately revoke Uber's license:
Clifford Chance concludes in its report: "These are not simply technical infractions. As Uber expands the risks associated with its operating model are becoming increasingly clear.
"Uber currently has approximately 17,000 registered drivers and has stated an intention to recruit 42,000 drivers by March 2016.
"However, when confronted by issues in relation to its drivers Uber disclaims responsibility for them on the basis that they are self-employed. In practice, the quality of regulation, oversight, and therefore the safety of the London private hire market is disintegrating rapidly as Uber expands."
It's war.