Pando

London elects a new anti-Uber mayor

By Paul Bradley Carr , written on May 6, 2016

From The Europe Desk

The race to elect a new leader of London is about to end, with the Labour party's Sadiq Khan likely becoming the city's first Muslim mayor. 

At a time when America, per Donald Trump, is ramping up its anti-Muslim rhetoric, a Khan election victory looks very much like A Good Thing. And it probably is, for everyone except Uber.

Khan, more than any other candidate, has campaigned on a platform of more regulation for the ridesharing giant in London. That's a huge problem for Uber as London is about the only city in the only major country in Europe where the company is thriving. The service is all but banned in France, Germany and Spain prompting one source close to the company to tell me "at this point, Uber's strongest European markets are London and Estonia."

Certainly, under Conservative mayor Boris Johnson (who you may recall recently attacked 'part-Kenyan' President Obama), Uber has thrived in London. This is not at all unrelated to the fact that Johnson is close to the so-called "Chipping Norton Set" that also includes Uber head of policy Rachel Whetstone. It also has a lot to do with Britain's Conservatives deluding themselves that the cosier they are to Valley tech companies, the closer London is to becoming Silicon Valley II. If we just take one more taxpayer-funded jaunt to the Googleplex then the magic will finally wear off. 

Khan, however, has remained more circumspect:

There are almost 100,000 private hire vehicles in London. Over the last three years there has been, roughly speaking, a 10,000 increase in the number of private hire vehicles. The black taxis are now as low as 23,000, for the first time in a generation, there are fewer people doing the knowledge. And I’m afraid the mistake was made a couple of years ago when TFL allowed the Uber taxis to come on stream. 

Somewhat wrong-headedly, Khan has focussed on the damage Uber is doing to London cabs rather than on the economic abuse the company is committing against the city. Uber allows its drivers to be paid via off-shore or out-of-country bank accounts, via its subsidiaries in the Netherlands. This arrangement hides the earnings of UK drivers, in some cases (according to sources familiar with the company) allowing them to claim unemployment benefits while working "full time" for Uber. The off-shore tax set up also allows Uber to significantly reduce its corporate tax payments in the UK. 

Whether Khan sticks to his anti-Uber promise now he has been elected will, of course, remain to be seen. Politicians have a funny habit of u-turning on anti-business policies when they finally gain power. On the face of it, though, the climate for Uber in London, and so in Europe, just took a significant change for the worse. 

As for other Valley giants operating in London: Khan has saved most of his rhetoric for Uber, but has also promised to "look into" Google's tax arrangement in the UK and also into claims that Airbnb hosts are not paying the correct taxes on their additional income.