Sunday 14 August 2016 7:13 pm

Business and entrepreneurs pile pressure on Sadiq over Uber red tape

Business groups and entrepreneurs have piled the pressure on the Mayor of London Sadiq Khan, warning that new rules clamping down on Uber will stifle innovation in the capital and its multi-billion pound digital economy as he attempts brand the city "open for business".

New rules have drawn the ire of business groups and tech entrepreneurs, who labelled them a backwards step that threatened the capital's thriving £36bn a year digital economy in a letter to the mayor.

Transport for London is requiring advance notice of any changes to its operating model, including the addition of new features such as adding Apple Pay support.

The group of leaders said this sets "a troubling precedent across government, and risks slowing down future innovations that ultimately benefit Londoners across the city".

Read more: London cabbies welcome a review of new Uber rules

"It’s worrying to see TfL introduce new rules that require private car hire companies to notify them of any changes to their operating model in advance," said the letter to Khan, signed by head of the Institute of Directors Simon Walker, chief executive of TechUK Julian David and head of the tech policy group Coadec Romilly Dennys, among others.

"Rather than encouraging companies to experiment, this could tie them in red tape every time they want to change their app, launch a new product, or update their pricing.

"As any entrepreneur will confirm, the ability to experiment and quickly test out ideas is key for success. Politicians and regulators should do everything they can to encourage this."

Co-founder and chief of startup equity crowdfunding site Seedrs Jeff Lynn, and boss of car-sharing startup LiftShare Ali Clabburn also signed their names.

A spokesperson for the mayor said: “Working with Transport for London, the mayor is determined to create a vibrant taxi and private hire market, with space for all providers to flourish, while driving up standards by introducing a comprehensive package of measures that will improve safety and the quality of service offered to all Londoners.

"The Mayor has pledged to be the most business-friendly Mayor of London ever. Sadiq has been clear that, following the vote to leave the European Union, London is open for business, open to entrepreneurship, open to innovative new businesses."

The letter comes a week after Uber took City Hall to task over English writing tests required under the new rules, which it believes overstep the mark.

But the issue comes amid a massive overhaul of the government under new Prime Minister Theresa May, a restructure of the department for business and a reshuffle of politicians and officials involved in creating the capital's world-leading tech sector since the vote to leave the EU.

There have been concerns among the industry's leaders and entrepreneurs that digital innovation will fall to the bottom of the pile amid Brexit negotiations and that any signal that business faces barriers in the capital could be detrimental to its success. It is still unclear what place technology and digital policy will have in May's new industrial strategy.

The new business department weighed in over the weekend on the pay row between one of London's most successful startups, Deliveroo and its drivers, warning that the status of its workers as self-employed is determined by the work they do and "not the type of contract they have signed".

CBI director for competitive markets Tom Thackray said: "London is a hub for fast-growing and entrepreneurial creative and technology companies and these are key sectors for its growth over the next five years.

"Upholding the UK’s positive approach towards new business models and avoiding overly prescriptive regulations are integral to generating investment, enhancing consumer choice and spurring competition.”

The long-standing feud between Uber, TfL and black cab drivers over regulation had been drawn to a close earlier this year after officials concluded a consultation on new rules.

Read more: TfL and Sadiq Khan are cracking down on illegal cabs

However, Uber now believes the details of the previously "broad brush" new rules it welcomed have now become too onerous.

Business groups have also raised concerns that requiring Uber's call centre be based at its headquarters in central London go too far. The billion-dollar startup last year pumped €4m into creating a customer service centre in Ireland.

“In the twenty-first century, rules which require a call centre to be in one particular location seem utterly bizarre," said IoD head of campaigns Andy Silvester.

"Ultimately, regulations should be there to keep up with business trends and with innovation, not attempt to hold back the forces of technological change. Consumers should be the ones judging call centres, and they’ll do it on the quality of support rather than on where it happens to be based.”

Latest: London Cabbies welcome a review of new Uber rules