Transport for London has launched an investigation into ride-sharing company Uber, after a whistle-blower found drivers can get work by providing fake insurance documents.
The whistle-blower, who was already a registered Uber driver but has not been named, uploaded a fake insurance document from Freecover, an insurance company which does not exist, and Uber's computerised system accepted it, allowing the driver to continue picking up paying customers.
Uber's automated system lets drivers submit updated insurance and MOT documents, as well as their driving license, through the internet.
In a response to the whistle-blower's actions, Uber said on its website: "The fraudulent document has been incorrectly approved." The company also says it has reduced the number of insurers its UK drivers can use "to improve our systems...this will help prevent fraud."
Drivers posting on the UberPeople website are unhappy about this change. One said: "The idiots that thought [the whistle-blowing] up are going to negatively affect every Uber driver in the UK. That's a lot of enemies to make."
Picking up fare-paying passengers without valid taxi insurance is illegal and a breach of rules set by both Transport for London (TFL) and Uber. But with driver insurance premiums costing up to £4,000 per year, exploiting the exposed loophole would no doubt be tempting, especially for drivers who feel let down by Uber's changes to how much they earn from each ride.
Based in San Francisco, Uber has 15,000 drivers in London who work through its smartphone app, which connects them with nearby customers looking for a ride. The company is valued at more than £26bn ($40bn) and is expanding rapidly across the globe. It is currently seeking $1bn worth of investment to expand its business in China.
The breach in Uber's vetting procedure was described by Jo Bertram, the company's regional general manager for the UK, as: "A unique situation."
Bertram told the Guardian, who worked with the whistle-blower to reveal the issue that "it is absolutely not possible to cheat the system. Public safety is our number one priority. We have no interest in allowing any driver who is not fully licensed and insured on the platform."
Exploiting the system
A second anonymous Uber driver speaking to the Guardian said: "Photoshopping is what everyone is talking about. With the fares coming down you have to look at other ways of exploiting the system"
Uber admitted a member of staff had approved the fake Freecover document. It also permanently removed the whistle-blower from its system and reported him to TFL and the police. The whistle-blower claims he has his own separate insurance and said his actions were to highlight the vetting shortfalls to the public. He described Uber's reporting him as "absurd and uncalled for."
The company says it has a "backstop" insurance policy which covers every Uber journey, whether the driver has their own insurance or not, which would pay out if an uninsured driver was involved in an accident - but it is still against the law for drivers to not have their own additional insurance.
An Uber spokesperson said the newspaper had "helped identify an important point and we are always looking to improve our document management processes. We are going through our processes and evaluating them to make sure something like this can't happen again...it was a case of human error. The team has been spoken to to ensure our high level of practice has been maintained at all times."