Uber Technologies, Inc (NYSE:UBER) is being sued for millions by over 10,500 London black-cab drivers, claiming the company unlawfully secured a license in 2012, which led to their business loss.
The lawsuit, organized by RGL Management and estimated at roughly $312.90 million (250 million Sterling Pounds) in damages, accuses Uber of siphoning business away from local drivers.
Over 10,500 black-cab drivers allege that Uber improperly acquired a license from Transport for London (TfL) in 2012, which they claim enabled Uber to divert business from traditional taxi operators unlawfully, the Financial Times reports.
In 2017, TfL refused to renew Uber’s license, judging it not a “fit and proper” operator, which was a decision partly reversed after Uber’s appeal and subsequent apologies for past mistakes by CEO Dara Khosrowshahi.
In 2022, TfL granted Uber a 30-month license, which is up for renewal at the end of September this year. Moreover, in 2021, a high-court ruling forced Uber to reclassify its U.K. drivers as workers rather than independent contractors, providing them with benefits like holiday pay and pensions.
In 2023, Uber announced plans to integrate London’s iconic black cabs into its platform by 2024, striving to mend a decade-long rift with the traditional taxi service.
Historically, black cab drivers, who must pass the rigorous “The Knowledge” test, have accused Uber of undermining their business.
Known as Hackney carriages, these are the only taxis in London authorized to pick up passengers directly from the street or taxi ranks, and they are also accessible through various other apps.
Analysts remain optimistic about Uber as their preferred stock in the travel and transportation sector due to its superior bookings and EBITDA growth relative to its peers.
They expect Uber’s diverse business verticals to continue driving growth above industry norms. Analysts noted growing competition in the autonomous vehicle (AV) sector could benefit Uber. Uber stands out as one of the sector’s most promising large-cap growth stories and is currently undervalued.
Uber Technologies stock gained 86% in the last 12 months. Investors can gain exposure to the stock via First Trust US Equity Opportunities ETF (NYSE:FPX) and Global X Millennial Consumer ETF (NASDAQ:MILN).
Price Action: UBER shares traded higher by 1.22% at $68.62 premarket at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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