Uber might be able to stick around in London without a legal fight

After a devastating blow last week, things could be looking up for Uber’s ability to operate in London.

On Friday, Transport for London, the government body that oversees the city’s transportation, announced that it wouldn’t renew Uber’s license to operate in the city beyond September 30 due to its “lack of corporate responsibility” related to safety and security.

The city’s move was a huge loss for the ride-hailing company: London is Uber’s largest European market and hosts some 40,000 licensed Uber drivers who serve about 3.5 million customers.

Uber promised to appeal the decision in court, but it also acknowledged wrongdoing.

“While Uber has revolutionized the way people move in cities around the world, it’s equally true that we’ve got things wrong along the way. On behalf of everyone at Uber globally, I apologize for the mistakes we’ve made,” Uber CEO Dara Khosrowshahi said in a public letter addressed to “Londoners” on Monday.

Now BBC reports that London Mayor Sadiq Khan, who backed Transport for London’s original decision, has “welcomed” the apology and notified regulators that they should meet with Khosrowshahi.

“Even though there is a legal process in place, I have asked [Transport for London] to make themselves available to meet with him,” Khan said.

The mayor’s language suggests an openness to negotiation. And while there’s no way to predict the outcome of the talks, it “could yield a settlement that avoids litigation,” according to Benjamin Edelman, a professor at Harvard Business School and Uber analyst. That could mean the avoidance of a long, drawn-out legal dispute that would be costly for both the city and the company.

But for Uber to win over regulators, it will likely have to make some pretty substantial concessions. London has a lot of problems with the way the company does business at the moment.

In its announcement last Friday, London’s regulators cited Uber’s lax handling of allegations of sexual assault of passengers by Uber drivers as one of the reasons it decided not to renew Uber’s license. London police investigated 32 Uber drivers for rape or sexual assault of a passenger between May 2015 and May 2016, according to Freedom of Information Act data obtained by the Sun.

In August, the Sunday Times obtained a letter by Inspector Neil Billany, head of the Metropolitan police’s taxi and private hire unit, that claimed Uber had chosen not to notify police after being made aware of criminal activity among its drivers on more than half a dozen occasions.

Uber’s general manager for London, Tom Elvidge, immediately responded to those accusations in a blog post, saying that Uber partners with local police to respond to complaints but that it “does not routinely report incidents retrospectively to the police on behalf of others — we advise those involved to make a report themselves and then assist the police with any subsequent enquiries.” In other words, it’s the victims’ responsibility, not Uber’s, to report sexual assault allegations against Uber drivers to the police.

London regulators also asserted that Uber does not hold its drivers to the same standards for medical and background checks that regular taxi companies do. Experts say Uber’s less intense scrutiny of drivers’ criminal and medical backgrounds gives the company a substantial edge over standard taxi companies.

But Fred Jones, who oversees Uber’s operations in a number of cities across the UK and Ireland, pushed back on that claim, telling the BBC that Uber drivers have to pass the same safety checks as black cab and minicab drivers in London.

Regulators also expressed concern over Uber drivers’ potential use of Greyball, a controversial software program Uber has used as far back as 2014. Although Uber claims the software was created to flag users who violate the company’s terms of service, a New York Times report earlier this year found that Uber had also used the software to “identify and circumvent officials who were trying to clamp down on the ride-hailing service.”

Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, told me there are also concerns that the software could be used to shield the company from being tracked by the city for its compliance with labor laws, such as how many hours drivers are operating on a daily basis.

In response to the Times report, Uber initially maintained that the software was only used to protect the company from users violating its rules — and suggested that city regulators searching for Uber drivers were the ones out of line. But then days later it reversed course and claimed it was going to stop using the tool.

It’s not clear yet what the timetable for talks is, but this is a very positive development for Uber. The company went from being kicked out of one of its premier global markets to direct negotiations with the government over its ability to actually remain in it in a matter of days.

For critical observers of Uber like Edelman, this whole affair seems to be just another example of Uber’s strategy of violating the rules until it is brought to heel with tons of pressure.

“Uber takes legal requirements as a starting point for negotiation — which is a brazenly aggressive strategy,” Edelman says. “Rather than doing what they’re told, they don’t do what they’re told — and then try to negotiate about it.”

If Uber ends up able to stay in London after direct talks, it will likely provide yet another reason for the company to keep up that habit.