London body refuses to renew Ola licence

LONDON/BENGALURU: Regulator Transport for London (TfL) has refused to grant the Bengaluru-headquartered company a new London private hire vehicle operator’s licence, saying it was not fit and proper to hold one after it found more than 1,000 trips on the Ola app had been taken by unlicensed drivers and vehicles.


Ola also failed to draw these breaches to TfL’s attention immediately when they were first identified, the regulator said.

Ola, which recently announced a £20 million investment to raise safety standards in the UK, said it would exercise its right to appeal the decision in court and would continue to operate as normal pending the outcome of any

appeal process

.

“We will closely scrutinise the company to ensure passengers’ safety is not compromised,” said Helen Chapman, TfL’s director of licensing, regulation and charging. “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.”

Ola was granted on July 4, 2019 a 15-month licence to operate in London; the licence expired on October 3, 2020. It had launched in London in February 2020, having first entered the UK in August 2018 in Cardiff and then expanding to other cities.

“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,” said Marc Rozendal, Ola’s UK managing director.

Ola has 25,000 drivers in the UK capital, making it the third-largest player after Uber, which has around 45,000 drivers.

“The results of the appeal will be keenly watched as London is the largest overseas market for Ola in terms of revenues, and was contributing double-digit percentages to its topline before the pandemic," said one source briefed on the market. “London is bigger than its business in Australia and

New Zealand

, where the company launched before the UK.”

It is understood the issues are “technical” and are related to inconsistencies in the date format used on a database. SoftBank-backed Ola raised these issues proactively during its licence review but was not able to send in the assurances by the date Ola’s licence expired.

“All the issues have been corrected and we are confident we can demonstrate this on appeal. We have not been banned, our licence has not been revoked,” stressed a source at the company.

TfL refused

Uber its London

licence extension a year ago after discovering 14,000 Uber trips had been taken by unlicensed drivers.

But the Westminster magistrates’ court late September ruled in favour of Uber and it was granted an 18-month extension.