London Refuses To Renew Ride-Hailing Firm Ola's Operating License Over Safety Issues

Transport for London, or TfL, the agency that governs the transport system for Greater London, has denied Indian-based ride-hailing app Ola a license to operate in the city, citing safety concerns.

TfL, which regulates London's taxi and private hire forms of transport, said it discovered a “number of failures” at Ola that “could have risked public safety.”

Such failures included the hiring of unlicensed drivers and unlicensed vehicles; as well as a failure to promptly bring these issues to TfL's attention when first identified.

Ola has been operating in London since February 2020. Ola was initially granted a 15-month license on July 4, 2019, which expired on Saturday.

Ola said it will appeal the decision. Meanwhile, the business can continue to operate in London pending the outcome of any appeal process.

“Our duty as a regulator is to ensure passenger safety,” 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."

If Ola appeals, Chapman added that “[TfL] will closely scrutinize the company to ensure passenger safety is not compromised.”

Ola assured it will cooperate with TfL.

“At Ola, our core principle is to work closely, collaboratively and transparently with regulators such as TfL,” said Marc Rozendal, Ola’s U.K. managing director, in a statement. “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.”

Based in Bangalore in southern India, Ola had entered a crowded and highly competitive London ride-hailing market, dominated by U.S.-based Uber Technologies (UBER), German-based Freenow, Estonia-based Bolt, and London’s own traditional black cabs.

The decision on Ola came only a week after Uber was granted an 18-month license to operate in London. Uber’s license was taken away earlier by TfL due to similar safety concerns.

As with Uber, Ola has also received funding from Japanese conglomerate SoftBank. Ola has raised a total of $3.8 billion in funding over the past few years from SoftBank, China's Tencent Holdings and South Korean automakers Hyundai and Kia.

Aside from the U.K., Ola also has foreign operations in Australia and New Zealand.