Uber Technologies Inc. (UBER) - Get Free Report shares jumped higher Monday after the ride-sharing group won a long-running battle with transport officials in London to keep its operating license in Europe's biggest city.
Deputy chief magistrate Tan Ikram, who presided over the lengthy appeal made by Uber to a Transport For London decision to remove the group's operating license in 2017, and then again in 2019, said he was convinced that the ride-hailing group "no longer poses a risk to public safety … despite historical failings" and granted it a license for the next 18 months.
Transport for London, which is headed by Mayor Sadiq Khan, had argued that thousands of Uber journeys in the capital were made in cars driven by non-licensed drivers using fraudulent IDs to log onto the group's platform.
"I find them, now, to be a fit and proper person to hold a London private hire vehicle operator’s license," Judge Ikram said. "I do, however, wish to hear from the advocates on conditions and on my determination as to the length of a license."
Uber shares were marked 5.7% higher in early trading Monday to change hands at $36.39 each, a move that would extend the stock's six-month gain to around 32%.
Uber's London business has proven controversial on a number of levels, including its use of a Netherlands-based sister company to avoid paying a 20% value-add-tax on rides booked by customers in Britain, a technique that one U.K. lawyer, who is bringing a case against the firm, has cost taxpayers nearly £1 billion.
Uber's business model in the so-called "gig economy", which uses self-employed drivers instead of hiring them as part of the company's full-time staff, is something that Britons have grown increasingly frustrated with in recent years and could resonate well with the political leanings of Mayor Khan.
London's Black Cab Drivers association, which represents the 85,000 drivers of the iconic taxis -- by some measures the most expensive in the world -- in the British capital, called the Monday verdict a "disaster".
"Uber has demonstrated time and time again that it simply can't be trusted to put the safety of Londoners, its drivers and other road users above profit," the Association said. "By holding up their hands and finally accepting some responsibility, Uber has managed to pull the wool over the eyes of the court and create a false impression that it has changed for the better."