If this stuff had happened at a start-up hotel chain or on an airline, what would the response have been? In many respects, neither types of service are as vital to London as Uber has become. For many millennials and students, who never previously would have taken cabs, the concept of a night bus is alien. The irony of course is that with London’s night Tube and a vastly enhanced bus service, public transit in London has never been more accessible, shaming cities like San Francisco and LA.
While I don’t plan to rekindle the whole debate around zero hours contracts (which admittedly work for some people fine, but which are unfair to others) or slave labour (something you could level at councils for how we pay care workers as much as taxi drivers), what’s clear is that the public employs a huge amount of double standards when it comes to its wallet.
What’s clear is that consumers are pretty hypocritical. Would people be as outraged if it wasn’t going to hurt their pocket? No, of course not. Do companies all support sustainability, going green, saving the world and doing the right thing? “Yes, provided it doesn’t cost more,” is all too often the response.
We saw similar – although far more short-lived – outrage when BBC’s Panorama show called out Marks & Spencer for having kids make its clothes in Turkey. Yet, do people think that garments bought from any clothing retailer for £10 or £20 could have been made with anything resembling fair pay? No, of course not. Yet it’s easy to turn a blind eye. People should be honest about the fact that, in fashion, you cannot have speed to market, competitively priced goods and fair pay in Britain. You can only have two. Do people care as long as they can pick up £5 t-shirts? No, of course not. No more than they do about picking up a £9 Uber ride from Oxford Circus to Camden when a black cab would cost double.
KPMG, one of the world’s biggest professional service businesses, has been caught up in the growing scandal in South Africa, firing its top people in the region over the Gupta fallout. The firm acted decisively, unequivocally putting its hands up. KPMG did the right thing.
Uber, in its short life, has become just as prominent as any of these businesses. It’s therefore right that it should be scrutinised as it has been.
So, what now? Like I said, Uber should continue. It serves far more than just the rich, the lazy and the drunk. As someone personally who has seen their vision deteriorate significantly since childhood, I rely on it a lot for travel after dark, as will many people. But the service – which often fails to stop in the right place or have drivers who know the difference between north or south – needs to improve.
The company needs to enhance its corporate governance. It needs to act like a grown-up and manage issues with the maturity of any company claiming to have the same valuation. It should be fully transparent with the regulator and establish an independent ethics board with representatives from appropriate groups, including the Metropolitan Police.
We can be more ambitious though. At a time where pollution and congestion levels are growing, critics have rightly questioned how “efficient” it is to have hordes of cars hanging about merely so people can grab a cheap fare somewhere already served by a bus route. Why don’t we therefore use private hire regulation to more aggressively push greener vehicles? Rather than dish out licenses to any old fume spluttering old rust-bucket (not all Ubers are Priuses or E-class Mercs, which are pretty pollutey), there’s nothing to stop us changing the rules to only promote the very greenest vehicles.
The market would adapt to respond to this and such a move could help fuel the investment needed into vehicles and the charging infrastructure currently been debated.
Above all though, what companies can learn here is that taking any position for granted is risky. Investing in corporate governance, in people and in doing the right thing costs more but offers far more insulation when things run off course.
A recent seminar, hosted by Fieldfisher, a law firm, eloquently set the stage for London’s next great infrastructure project (assuming that the Third Runway will still be in legals in 2030). Even thinking about how to build a £30bn twin-tunnel bored through sticky London clay between Wimbledon and Tottenham Hale makes my brain hurt.
What’s worrying though, is that just as much energy and expense will go into a lot of needless legal and planning faff as the more virtuous task of avoiding the wealth of structures – and other tunnels – massed across the capital’s increasingly congested underbelly.
While respecting the limits placed on her by purdah, Michele Dix, chief executive of Crossrail 2, laid out the enormity of the task at hand. The cost of the scheme is now estimated at £30bn – up 10 percent from when it was originally announced, although the final cost could well be more.
Dissecting London diagonally from northeast to southwest will connect Surrey and Hertfordshire to the capital. But crucially, it will connect affluent areas such as Hertford and Wimbledon with less salubrious new stops such as Lea Valley which has swathes of undeveloped land sitting not 20 minutes outside the capital’s core.
Areas like Lea Valley which sit in the hinterland between the Victoria Line and TfL Line that conects Essex to the City could prove popular with developers as the land is cheap and well connected. A model for this could be Legal & General’s build to rent scheme on Ferry Lane, near Walthamstow down the road, designed by Assael Architecture.
L&G’s Pete Gladwell, presenting, outlined the vastness of the insurer’s appetite for housing. Its foray into residential investment follows Essential Living’s deal with TFL on the redeveloped Archway Tower which is now a RIBA-award winning building – the first purpose built rental block since Dolphine Square. The Tube owner gets a share of the rent as it has retained the headlease to the former brutalist office block.
The rail link would enable 270,000 more people to get into London each day. It would be built by the early 2030s. Ms. Dix promised that, as part of this, Crossrail 2 would also unlock many new areas for development and could pioneer land value capture in order to fund it.
Fairly capturing the masses of profits made around such schemes has been a longstanding challenge. For landowners lucky (or, in some cases, smart) enough to have owner or acquired sites around projects, the boon of infrastructure has been monumental. But the distant unfairness of private speculators gaining solely as a result of public investment pains many citizens. This matters because it contributes to many of the reputational hurdles developers face via the planning system: the prevailing feeling that the public does not benefit from development.
It’s important to address this, not simply for PR value but because without it, new railways won’t get built.
L&G’s Gladwell talked briefly around the potential for patient capital – such as insuers or pension funds – to invest more in infrastructure the way his company is now looking at long-term rented housing. Whether through equity investment or long-term debt finance, unwrapping more of the pension fund pounds currently tied up in stocks or bonds could put it to much better use in Britain. It’s fascinating to try and chart the bredth of L&G’s own activity – which stretches from funding East Anglia trains right through to clean energy.
With Brexit on the horizon, the need for Britain to be more self-sufficient and for its economy to be more balanced is obvious. As I mentioned in this Sky News interview (below) last week, it’s worrying that Crossrail 2 seems to be missing from the Conservative manifesto (where it was present in the previous two). It has to go ahead and while we’re cracking on, we need to ensure that land value capture is done right – and fairly. What that looks like precisely will have to wait until another day.