London’s TfL sees flaws in Ola’s operating model; revokes license citing likely risk to passenger safety

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Updated: Oct 05, 2020 3:44 PM

London's transport regulator said that there were "historic breaches of the licensing regime that led to unlicensed drivers and vehicles undertaking more than 1,000 passenger trips on behalf of Ola." TfL added that Ola failed to "draw these breaches to TfL's attention immediately when they were first identified."

Ola can also continue to operate in London until the outcome of the appeal process. Image: Bloomberg

Days after Uber won the legal battle against London’s transport regulator Transport for London (TfL) to secure an 18-month license, the regulator has now refused to renew Uber-rival Ola’s license that expired on October 3, 2020. “Our duty as a regulator is to ensure passenger safety. Through our investigations, we discovered that flaws in Ola’s operating model have led to the use of unlicensed drivers and vehicles in more than 1,000 passenger trips, which may have put passenger safety at risk,” Helen Chapman, Director of Licensing, Regulation and Charging, TfL, said in a statement. Ola, which has been operating in London since February 2020 and competes with Kapten, Bolt and other ride-hailing apps apart from Uber, had received the 15-month private hire vehicle (PHV) operator’s licence on July 4, 2019, to ply services in London.

TfL noted that there were “historic breaches of the licensing regime that led to unlicensed drivers and vehicles undertaking more than 1,000 passenger trips on behalf of Ola.” The regulator added that Ola failed to “draw these breaches to TfL’s attention immediately when they were first identified.” Ola, however, as per a provision in the Private Hire Vehicles (London) Act 1998, can appeal against the decision by TfL within 21 days of it being communicated to the company. Ola can also continue to operate in London until the outcome of the appeal process. Nonetheless, “we will closely scrutinise the company to ensure passengers safety is not compromised,” Chapman added.

“We have been working with TfL during the review period and have sought to provide assurances and address the issues raised in an open and transparent manner. Ola will take the opportunity to appeal this decision and in doing so, our riders and drivers can rest assured that we will continue to operate as normal, providing safe and reliable mobility for London,” said Marc Rozendal, MD, Ola UK in a statement.

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In a similar instance, TfL had refused to renew Uber’s 15-month license in November 2019 after “TfL has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk,” a statement by TfL had said. However, Uber had last week won its appeal against the withdrawn license. “Despite their historical failings, I find them, now, to be a fit and proper person to hold a London PHV operator’s licence,” the judgement, a copy of which was seen by Financial Express Online, noted.

Ola and Uber in India have also been facing backlash from drivers. According to a survey conducted by Hyderabad-based Indian Federation of App-based Transport Workers and UK-based International Transport Workers’ Federation conducted between July and November 2019, Uber and Ola drivers work in a very toxic and isolated work environment, drive for over 15 hours a day, and still don’t earn enough for survival even as their earnings have dwindled. The survey was published in August this year.

The survey, with 2,128 respondents, had added that drivers are working for longer hours “to justify the cost of fuel consumed, to pay the commission/EMI they owe to Ola/Uber.” The earnings, on the other hand, dropped from Rs 70k-1 lakh per month to Rs 22k-50k over the past four years due to incentives and bonuses being cut coupled with the rise in fuel prices and decrease in per kilometre rates by Ola /Uber.”

This story was updated with the statement from Ola UK.

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