Transport for London wants access to Uber's greatest competitive asset – the swathes of data that underpins its success

 
Elliott Haworth
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London Assembly member Shaun Bailey says “the idea that TfL would make the handing over of data a part of a company’s licence agreement is absurd." (Source: Getty)

Efficiently matching supply with demand is the bread and butter of tech platforms operating in the gig economy.

AirBnb matches spare rooms with short-term renters. Deliveroo matches restaurants with hungry consumers, via a network of riders. Uber matches car owners with people who need lifts.

Each transaction creates rich data. When processed, that data becomes information. With Uber in particular, when analysed, the information paints an incredible portrait of the urban environment, which can be used to drive business, making the firm more competitive, and more profitable.

This data is not just a valuable asset, but the very crux of Uber’s competitive advantage.

Last week, Transport for London (TfL), in a thinly-veiled reference to Uber, following years of conflict, released a policy statement for private hire services in London. Buried on page five, it suggests: “operators should share data with TfL, so that travel patterns in London and the overall impact of the services can be understood.”

It’s not actually clear what sort of data TfL is after. A spokesperson said that the organisation hasn’t “got anything more to say than is in the policy statement for now,” which is very little. “More details will follow in the coming months.”

Commuter Chaos As RMT Workers Bring London Underground To A Standstill
TfL is expecting the total cash from Tube and bus fares to drop by £56m in this financial year. (Source: Getty)

Data value

The data Uber collects from the thousands of journeys it facilitates is of unquestionable value to TfL. Gaining insight into how the city moves could save TfL money at a time when it is expecting the total cash from Tube and bus fares to drop by £56m in this financial year.

For example, understanding where hotspots of activity occur on the app – where people are using less public transport – could lead to TfL making efficiencies on underused bus routes. Knowing where and when journeys start and end could enable TfL to better react to demand, perhaps devising some sort of demand response service.

Read more: Deputy mayor slams government for abandoning London's transport network

Likewise, with 40,000 drivers using its app, Uber has (it is widely accepted) exacerbated the capital’s growing congestion problem. Better understanding traffic trends could help TfL to plan roadworks and major public events. Quantifying the effect of disrupted public services could prepare TfL for incident response.

The list goes on.

“Nobody has a crystal ball to predict long-term needs,” says Nathan Marsh, intelligent mobility lead director for UK & Europe at urban planning behemoth Atkins. “Big data provides context and real-time accuracy about how people use them, which urban planners can utilise to better determine future trends, and to build in agility and flexibility”.

Hand it over

The usefulness of Uber’s data is clear. But why should it give up any part of its greatest – and arguably only – competitive advantage to the state? Diktats of this nature simply don’t occur in more established industries. It highlights TfL’s struggles with a new business model that doesn’t fit with existing regulations.

TfL will need to explain why disclosure of this data is necessary for it to perform its regulatory functions

“TfL will need to explain why disclosure of this data is necessary for it to perform its regulatory functions,” says Michael Stacey, senior associate at Russell-Cooke.

“TfL’s job is primarily to decide whether the applicant is a fit and proper person to hold a private hire operator’s licence. It is not clear that detailed journey data is necessary to enable it to judge whether applicants meet that test.

“The onus will be on TfL to either justify why this is required under its existing powers, or seek new powers to obtain this information from operators.”

Read more: TfL plans harsher rules for Uber

Movement

Uber has form with data sharing in other cities. Its Movement data tool, created in collaboration with local governments, offers insights to urban planners, such as what a gridlock looked like in Washington when the metro system was shut down for emergency repairs, or how the Boston Marathon affects average travel times.

An Uber spokesman told City A.M. the firm is “looking at launching Movement in London in the near future”.

But given that there are several tools on the market similar to Uber’s Movement, it raises questions about exactly what TfL wants from Uber. Last year the ride-sharing app fought back against New York mayor Bill de Blasio to release more data – the address and time of each drop-off – on grounds of privacy. Chris Cook, head of data protection at SA Law, thinks TfL may face the same issues in the UK.

“From a data protection perspective, the GDPR is likely to be a hindrance to TfL’s wish for data sharing. This is because it is likely that individual users could be identified from analysing travel patterns, meaning that personal data is likely to be involved.

“Usage of personal data in this manner could well constitute ‘profiling activity’ within the meaning of the GDPR. Where profiling is carried out by operators, they must implement suitable measures to safeguard the individuals’ rights and freedoms, making it less likely to be justifiable for their data to be shared with a third party.”

Stacey adds that “the more detailed the information sought by TfL, the more resistance there is likely to be.”

Historic Night For London Underground As Trains Run through The Night
The Mayor’s Smart London plan has a strong emphasis on sharing and using data to improve services (Source: Getty)

Detente

Given hostilities between TfL and Uber, a touch of reciprocity might pay dividends.

London was once deemed Uber’s “perfect child” because of the ease with which it won a licence in 2012, but relations have soured. Uber’s license renewal was blocked by TfL last year, due to public-safety problems, including a failure to report “serious criminal offences”.

Uber rebuffed accusations it is not “fit and proper” to serve the capital. Last week, striking a more conciliatory tone, the firm introduced a raft of new safety features, including 24-hour telephone support for riders and drivers, as well as dropping its case against English language tests.

Forcing a tech company such as Uber to surrender their commercial advantage would send a negative message to tech businesses across the globe

To placate TfL, perhaps offering access to some of its data could lead to a detente between the two organisations.

The Mayor’s Smart London plan has a strong emphasis on sharing and using data to improve services, including through new city-wide data partnerships. The Transport Committee’s Future Transport reiterated this last week.

Many apps need TfL live data to operate, and in return, TfL believes reciprocal data-sharing arrangements should be integral. But there’s a difference between data sharing, and forcing a firm to give up a competitive asset. What sort of precedent does it set for the future?

“Data sharing between entities across the public sector and private sectors can provide a route to digital innovation, growth and increased productivity,” says Russ Shaw, founder of Tech London Advocates. “We should be encouraging cooperation where there is mutual benefit and a clear economic and social benefit to be realised.

“However, data is an asset in which many tech businesses make large investments to create and process and can often be the foundation of their competitive edge in the market. Forcing a tech company such as Uber to surrender their commercial advantage would send a negative message to tech businesses across the globe – policymakers must work to encourage positive collaboration and understand that data sharing should be approached responsibly and with a cooperative spirit.”

Read more: Uber drops opposition to English language tests for drivers in London

London Assembly member Shaun Bailey, who sits on the transport committee, agrees: “the idea that TfL would make the handing over of data a part of a company’s licence agreement is absurd.

“Private hire operators like Uber and Kabbee rely on the data gathered from their apps in order to stay competitive. Forcing them to hand that valuable commodity over in order to operate in the city smacks of an old-fashioned highway hold-up.

“TfL needs to make London an attractive city in which modern businesses can operate. These kinds of overbearing regulations will simply drive away competition and worsen the situation for the end user – the average Londoner.”

Elliott Haworth is business features writer at City A.M.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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