After Transport for London (TfL) announced that Uber London Limited (Uber) would not be having its private hire operator licence renewed, Harrison Drury’s David Edwards and Lucy Blezard, look at what the case might mean for businesses that fail on corporate responsibility.
What happened in the Uber case?
Private hire operators in London must meet strict regulations set by The Private Hire Vehicles (London) Act 1998, to demonstrate to TfL that they can safely operate in the city and are ‘fit and proper’ operators.
TfL has concluded that Uber is not a ‘fit and proper’ private hire operator. They considered Uber’s approach and conduct to display a lack of corporate responsibility and cited four areas of concern:
- Uber’s approach to reporting serious criminal offences.
- Its approach to obtaining medical certificates.
- Its approach to obtaining Enhanced Disclosure and Barring Service (DBS) checks.
- Its approach to explaining the use of Greyball in London – software that could block regulatory bodies from gaining full access to the app and preventing officials from undertaking regulatory or law enforcement duties.
However, there is a provision for companies to appeal a licencing decision within 21 days of it being communicated to the applicant, and it is anticipated that Uber will be challenging TfL’s decision.
What is corporate responsibility?
Corporate responsibility (CR) or corporate social responsibility, is the way in which companies integrate social and environmental concerns into their business operations.
In essence, CR focuses on different aspects of an organisations functionality, such as; diversity, labour chain, accountability, sustainability, economic growth and many more.
Why is it important?
Over the years, CR has taken more of a front seat and as economic pressures continue to change in nature and demand, it’s important to understand why. A few reasons include:
- Increased demand for CR – Particularly from government organisations, shareholders, clients and the media. Business is competition.
- Business benefits – CR can make organisations stand out during tender exercises, help secure reputable accreditations such as ‘The Investors in People award’ and give a competitive edge.
- Developing relationships with the local community – Having CR plans in place helps organisations develop and thrive within the local community. The community also benefits from the employment increase.
As per the 2006 Companies Act, company directors also have a legal duty to promote the success of their organisation and are obligated to act in such a way.
Considering the recent Uber news, what should businesses be doing?
It’s essential that the concept of CR is understood, whether a business has a CR plan in place or not. If that isn’t the case, it’s critical steps are taken to address this.
Education in business is a key prevention of regulatory/ statutory breaches, neither of which look great in the media.
Once the concept of CR is understood, businesses should ask these questions:
- What does a CR plan look like?
- What value will a CR plan bring to our business?
- How could having a CR plan enhance our performance?
- What are our industry competitors doing in respect of CR?
Any plan, regardless of whether it is CR related, must be fit for business purpose. Although businesses share their lines of work, and have common interests, each has its own commercial, financial and legal pressures.
So, when designing a CR plan, keep in mind:
- Are the aims of the plan clear and precise?
- Is the plan fit for purpose?
David is a senior associate solicitor in Harrison Drury’s regulatory & compliance team and Lucy is a specialist regulatory & HR assistant. For further information on corporate responsibility or any other corporate legal mater, contact David Edwards or Lucy Blezard on 01772 258321.