Uber to learn London licence fate with judge's ruling on Tuesday

By Alistair Smout

LONDON (Reuters) - Uber will hear on Tuesday whether it has succeeded in its bid to avoid a ban in London, in a test of claims by new management that it has changed its culture after years of strained relations with the city's transport regulator.

The taxi-hailing app overhauled its policies and personnel in Britain after Transport for London (TfL) refused to renew its licence in September for failings in its approach to reporting serious criminal offences and background checks on drivers.

"We've had five years of a very difficult relationship, where Uber has felt that it hasn't required regulation," TfL's licensing director Helen Chapman told the court on Tuesday, adding it had been "frankly frustrating" that issues TfL should have been aware of were first reported in the media.

While the appeal process is ongoing, Uber can continue to operate in the city, and Tuesday's decision can also be appealed, meaning the whole legal process could take years.

With backers including Goldman Sachs and BlackRock and valued at more than $70 billion, Uber has faced protests, bans and restrictions around the world as it challenges traditional taxi operators, angering some unions.

Although Uber said TfL had "caved into" critics at the time of the ruling, it adopted a more conciliatory tone during the two-day hearing at Westminster Magistrates Court, saying the regulator was right not to renew its licence last September but changes the firm has made since mean it should be given a shorter, "probationary" licence.

"TfL was entirely right to make the decision that it did," Uber's lawyer Thomas de la Mare told the court. "Their conduct has been entirely vindicated."

Uber, which has about 45,000 drivers in London, introduced several new initiatives in response to the ruling, including 24/7 telephone support and the proactive reporting of serious incidents to police. It has also changed senior management in Britain, its biggest European market.

"UBER IN SHEEP'S CLOTHING"

The ruling has been a test of Uber's new management at the board level, with chief executive Dara Khosrowshahi, who took charge the month before TfL's decision, pledging to "make things right" in London.

After its application for a five-year licence was rejected last year, Uber had sought an 18-month one to prove to the authorities that it has reformed. But after judge Emma Arbuthnot indicated such a licence would be too long, Uber lawyer de la Mare said he now thought 15 months would be appropriate.

Arbuthnot said on Tuesday she expected to give the judgment at around 5 p.m. BST (1600 GMT).

TfL's lawyer told the court on Monday that if a licence was granted by Arbuthnot, it should be under strict conditions which the regulator has agreed with Uber, and for a short duration, as there were questions whether Uber's changes could be trusted.

De la Mare said the fact that Uber had signed up to the conditions should be taken into account when considering whether the firm was "fit and proper" to have a London licence.

The conditions include giving TFL notice of what Uber is doing in areas that may be areas of concern, reporting safety related complaints, and having an independent assurance audit report every six months, de la Mare said.

Some were sceptical of Uber's changed attitude, with Gerald Gouriet, lawyer for the Licensed Taxi Drivers' Association, an interested party at the case, labelling the firm an "Uber in sheep's clothing".

Asked if Uber's more proactive approach since the ruling showed the relationship with the regulator had improved, TfL's Chapman said: "It certainly works better when an operator is seeking permission rather than forgiveness."

(Reporting by Alistair Smout; Additional reporting by Costas Pitas; Editing by Alexander Smith, Mark Potter and Alexandra Hudson)