| Hi there. It's Lizette. Uber Technologies Inc.'s dream of being the "Amazon of transportation" got a reality check this week, when London's transit authorities (again) stripped the company of its license to operate. The consequences will take time to play out. Uber can continue shuttling passengers while it appeals the decision, a process that could extend for months or even years. But graver than the threat of future expulsion from Uber's largest European market is how this undermines a strategy the company has pursued for the last year. Dara Khosrowshahi, the chief executive officer, repeatedly drew parallels to Amazon.com Inc. in Uber's roadshow for its initial public offering in May. The underlying message was that Uber's position as global ride-hailing leader was secure and that it can now use that position to branch into other modes of urban transportation—much as Amazon did with books. That pitch starts to fall apart when the core business is routinely under assault. Regulators in Britain's largest city said Monday that the ride-hailing company failed to ensure the safety of passengers and wasn't "fit and proper" to do business in the city. Last time, just a couple years ago, regulators said Uber hadn't properly vetted its drivers. This time, they said thousands of trips were conducted by unauthorized drivers masquerading as licensed ones by uploading their photos to legitimate accounts. To Uber's credit, it came forward in May and disclosed problems with the service to London regulators. Uber said 43 of its 45,000 drivers in London exploited the vulnerability in its app and that it has since been fixed. A spokesman for the company declined to say how widespread the problem was outside London but indicated that the incident prompted Uber to resolve issues elsewhere. Customers and regulators in the more than 700 other markets where Uber operates will have to wonder whether the glitch affected them.
Given Uber's checkered history, the reputational stain of failing to authorize its drivers is a bad look for a company that runs on customer trust. Now, more than ever, Uber needs sure bets. London is a mature market for Uber, meaning the company isn't spending as aggressively to recruit drivers and lure customers. It's the kind of city that's critical to Uber's plan to stop bleeding cash and fund the company's Amazon-like ambitions. Uber is spending to develop food and grocery delivery services, connect employers with contract workers, transport customers in helicopters, deploy electric bicycles and scooters for rent across major cities, book freight shipments for truck drivers and build cars that can drive themselves. That's after Uber eliminated some pricey experiments (RIP cloud kitchens) and retreated from some hyper-competitive geographies (goodbye, China). But the thirst to grow larger is core to the company's narrative and one that was sold to investors. Since taking the helm two years ago, Khosrowshahi has hustled to remake Uber's culture and set new priorities by slashing more than 1,000 jobs and reorganizing departments. He has pledged to turn a profit (a profit before interest, taxes and other expenses, at least) by the last quarter of 2021. And this month he explained to analysts how he'd get there: abandon markets within 18 months where Uber couldn't establish or defend a No. 1 or 2 position. Uber maintains a wide lead in London. There are at least a half-dozen competitors there that are orders of magnitude smaller, but those companies now have a distinct advantage: a license to legally operate. —Lizette Chapman | 
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