How can Uber save its place in London’s taxi market?

Uber in action. Image: Freestocks.org.

Dara Khosrowshahi will have to do more than post a humble tweet if he is to rescue Uber in London. The CEO of the ride-sharing company will need new reserves of humility, allied with positive action, if his firm is to be given a third chance to make it work in the UK capital.

Uber was first warned early in the year when it was given a short-term license extension rather than the full five years. The idea was that it would put its house in order. Transport for London (TfL), the body which issues taxi licences, was unhappy with the level of cooperation with authorities over driver checks and alleged sex attacks on passengers. So called “greyball” software designed to mislead authorities by preventing them from making checks on drivers also raised concerns.

Uber appears to be struggling to understand that higher standards of behaviour are expected from large businesses compared to start-ups. Once upon a time, Uber may have passed below the radar. But with 40,000 drivers and 3.5m customers, they are a significant business, and attract significant attention.

Control issues

It does appear that the door has been left open for Uber if it can address its behaviour, and that of its drivers. The company is lodging an appeal, which will give it a further 21 days in which it can continue to operate. The question is whether Uber is capable of bringing control and discipline to the way it operates. Does it have the structure, processes and procedures necessary to fully comply with TfL’s regulations?

The impression is left that Uber has simply not matured to the degree needed for such a large business. The extent of allegations and bad publicity is burying the business in London, its largest European market. Uber’s reported obstruction of regulation is catching up with it. Its customers have tried to make their voice heard, but online petitions are unlikely to cut much ice with TfL, whose first responsibility is for passenger safety. Uber needs to address its own behaviour first. And this is no time for an adversarial approach.

A gentle, placatory strategy is much more likely to be successful than taking on TfL. It will mean Uber going against type. The Licensed Taxi Drivers’ Association suspects Uber will seek to take on TfL through the courts, a move which would win no friends at TfL. Wars with regulators rarely end well.

Disaster area

It might seem that all is lost already if you believe some commentators. They suggest that London mayor Sadiq Khan has pushed this decision through to appease black cab drivers for political motives.

In truth, the possible loss of votes from 3.5m Uber customers and 40,000 drivers in the next mayoral election makes that rationale look flawed when you compare those numbers to the 20,000 London black cab drivers who are celebrating the decision. This action is probably Khan’s least favoured path and final resort. And it’s fair to point out that theoretically, he has no part to play in the decision, even if he clearly supports it.

From Uber’s point of view, it is no over-reaction to call this a disaster. Significant investor-funded incentives will have been poured into the London market to attract drivers and customers in developing the business. Uber has around one third of the London taxicab market but many of its self-employed drivers work for other taxicab businesses too. Some competitors also have their own apps.

This means switching costs are low for drivers and customers who switch to competitors such as Addison Lee and Gett. In the space of a few days most customers will have happily used or considered other taxicab firms. From 21 October, when the appeals process extension is due to end, Uber’s business will seep away and it will be difficult to get back. That makes Khosrowshahi’s task all the more problematic: how to develop an amicable and practical response while the clock is ticking, and when the company’s instincts may be to lash out.


Domino effect

To make matters worse, Uber operates in 40 towns and UK cities which may have experienced similar behaviour and who may now feel empowered to follow London’s example. Intense scrutiny will fall on the company from civic authorities, politicians, the media and the public. This is the cost of scale. And scale achieved too quickly makes the scrutiny hard to manage.

So, what can Khosrowshahi do? Litigation – should Uber lose the appeal which has 21 days to be heard – would be a high-risk option. If they lost the case then the London market might never be open to them again. It would also be a lengthy process and by the end of it there might be no market left for them at all.

The CEO needs to use the personal touch. He should visit Khan, cap in hand, to plead for a further three months to demonstrate that behaviour will change. He should then make sure it does. This would include transparency and full cooperation with TfL and the police over alleged driver attacks, demonstrating that all drivers have been subjected to required checks, and that “greyball” software is not being used.

The ConversationThis goes against Uber’s usual secretive and antagonistic culture. The tone of Uber’s approach in its young life has owed much to the spiky urgency of founder and former CEO Travis Kalanick’s personality. The tough task will be to convince the London mayor, and authorities elsewhere, that the culture has changed while Kalanick and his supporters remain on the board peering over Khosrowshahi’s shoulder while he is trying to negotiate a fix. How London plays out will be a litmus test for Khosrowshahi’s proclaimed wish to step away from Uber’s toxic reputation.

John Colley is associate dean at Warwick Business School, University of Warwick.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”

Katie Bishop is a freelance writer based in Oxford.