Uber's London Dispute to Drag Out as Negotiations Begin

(Bloomberg) -- Uber Technologies Inc. won't be able to resolve a dispute any time soon with London transportation authorities who have threatened to ban the ride-hailing service in the city.

Chief Executive Officer Dara Khosrowshahi flew to London for a meeting Tuesday with Transport for London to try to salvage Uber's business in its largest European market. The two sides didn't reach a deal, but pledged to continue negotiations in the weeks ahead. In the meantime, Uber is working on an appeal of the ruling and must file by Oct. 13. During the appeal process, the company's cars can remain on the road.

"Our new CEO had a constructive meeting with the Transport Commissioner this afternoon," Uber said in a statement. "We hope to have further discussions over the coming weeks as we are determined to make things right in London."

Uber's license was revoked last month, a surprise move by regulators that would surely affect the company's finances. In London, Uber says it has more than 40,000 drivers and more than 3.5 million riders who use the app at least once every 90 days. Regulators criticized Uber for a poor record of reporting crimes and not conducting adequate background checks on drivers. The government also said the company has actively tried to avoid government scrutiny through a program called "Greyball." Regulators concluded Uber didn't pass the "fit and proper" test to operate in the city.

“Today's constructive meeting centered on what needs to happen to ensure a thriving taxi and private-hire market in London where everyone operates to the same high standards,” Transport for London, the regulator, said in a statement. “Further steps in this process will take place over the coming weeks.”

Uber has disputed the regulator's specific findings, but acknowledged it pushed the limits with its business practices. Some drivers have encouraged regulators to implement new benefits, such as minimum pay and vacation time.

Meanwhile, the dispute has taken on political significance in the British capital. Mayor Sadiq Khan, a Labour politician, supports the regulator's decision, while U.K. Prime Minister Theresa May has said the proposed ban was excessive.

Khosrowshahi is juggling the requests from TfL while a boardroom battle simmers back in San Francisco with former CEO and co-founder Travis Kalanick. The board is scheduled to vote Tuesday on a large stock sale to SoftBank Group Corp. and governance rules that would diminish Kalanick's clout.

Uber has several challenges in the U.K. On Monday, the manager in charge of the U.K. and Northern Europe, Jo Bertram, said she was stepping down after four years at the company. U.K. judges are also deciding whether Uber needs to classify drivers as workers entitled to more benefits, a potentially significant shift for Uber's business.

To contact the reporter on this story: Adam Satariano in London at asatariano1@bloomberg.net.

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Mark Milian