Running a taxi business never used to be so difficult. Noddy managed it, for goodness sake. So, too, Sid James in Carry on Cabby. Even Larry David, the misanthropic anti-hero of sitcom Curb Your Enthusiasm, once drove passengers for a living. But the recent travails of taxi-hailing service Uber in Britain suggest none would last in the industry today – given all the heightened political, regulatory and wider social scrutiny. In fact, NoJaD Cabs would probably have its licence revoked before it could even pick up Big Ears. Or enter into a dispute with Big Ears*.
Anyway, later today, all eyes will again be on Uber, as the taxi-hailing app company begins one of three regulatory battles over its business model. Its lawyers are attempting to appeal an employment tribunal ruling from last year that stated its drivers were not “independent contractors” but “workers” owed the minimum wage and holiday pay.
Uber’s case was the first in Britain to test a key premise of the “gig economy”: ie, that people who work for app-based services are not technically employed by any company. But a series of tribunals since then, including one brought against Uber’s rival Addison Lee, has questioned whether any private hire companies can pretend their drivers are anything but workers.
On Monday, Addison Lee lost its tribunal, as its drivers – like Uber’s – successfully argued that they could not be deemed “independent” because they did not have enough control over the way they worked.
If Uber does not win its own appeal process, it will probably have to make significant changes to its business model.
For the US group, however, this is just one battle. It faces another after a female driver in the UK issued sex discrimination proceedings, saying the way Uber operates puts her and others at risk. This case has been brought by the GMB union on behalf of a 44- year-old woman who claims she no longer feels safe driving for Uber at night. She argues that Uber drivers are not told their passengers’ destinations until they are already in the car, so the driver cannot easily avoid journeys to remote or unsafe areas.
Then, Uber must prepare for the ultimate fight: appealing against a decision by Transport for London, the regulatory body chaired by mayor Sadiq Khan, to revoke its licence because it is “unfit”. Dara Khosrowshahi, Uber’s new chief executive, is now considering travelling to London to meet the London regulators who govern its most important European market.
* I’m sorry, NoJaD Cabs has been in touch to apologise for its previous management’s use of a lobe-ist term. Its new chief executive says that, in keeping with his new policy of politically-correct passionate humility, he will henceforth refer to passenger Big Ears as Auditorily Advantaged.
Even selling soap to the auditory-hygiene disadvantaged is difficult these days. PZ Cussons – the FTSE 250 group behind the Imperial Leather, Sanctuary and Original Source brands – said this morning that UK consumers are feeling the strain. Apparently:
It is increasingly clear that consumers are shopping cautiously reflecting general cost inflation outstripping wage growth, and broader economic uncertainty.
It warned investors that while its performance is on track, “tough trading conditions in most markets” are set to continue.
In its Washing and Bathing division, product launches across Imperial Leather, Carex and Original Source brands have been well received. However “volumes remain very sensitive to price points and discounting”. In the beauty division, recent new product launches such as the new Sanctuary Being range have performed well over the summer.
But it’s not just the UK where consumers are feeling pinched. In Nigeria, while the Naira has been stable against the US dollar, credit availability has tightened in recent months – and the environment for consumers “remains challenging” following the very significant cost inflation of recent years.
At least the business of selling chocolate remains relatively easy. Hotel Chocolat, the chocolatier and cafe chain, has reported that sales for the year to July rose 12 per cent to £105m while pre-tax profits doubled to £11.2m.
Chief executive Angus Thirlwell said:
I am confident that our plan for the coming year will deliver more growth… Consumers increasingly want uncompromisingly delicious and hedonistic chocolate that’s also made with responsible amounts of sugar.
In the year to July, Hotel Chocolat opened 12 new stores, taking its total to 94. It has also opened two franchised stores in Hong Kong and spent £4m upgrading its truffle making facilities. Truffle making capacity, the company said, has increased by 70 per cent.
FT Opening Quote, with commentary by Matthew Vincent, is your early Square Mile briefing. You can sign up for the full newsletter here.
For the latest Lombard column commentary, click here.