Uber’s ride-hailing business hit with ban in Germany

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Another legal blow for Uberin Europe: A regional court in Frankfurt has banned the company from sending ride-hailing requests to rental car companies via its app — with the court finding multiple competition violations.

The ruling, over Uber’s dispatching process, follows a legal challenge brought by a German taxi association.

In Germany, Uber’s ride-hailing businessworks exclusively with professional and licensed private-hire vehicle (PHV) companies — whose drivers and cars have the necessary licenses and permits to transport passengers.So the court ban essentially outlaws Uber’s current model in the country — unless it’s able to make changes to come into compliance.

Uber can appeal the Frankfurt court’s judgement, but did not respond when asked whether it intends to do so.

The ban is enforceable immediately. It’s not clear whether Uber will temporarily pause service in the market to come into compliance — it has not said it will do so, suggesting it intends to scramble to make changes while continuing to operate. But if it does that, it risks fines if it’s caught breaching the law in the meanwhile.

Per Reuters, the plaintiff in the case, Taxi Deutschland, has said it will seek immediate provisional enforcement — with the threat of fines of €250 per ride, or up to €250,000 per ride for repeated offences if Uber fails to make the necessary changes.

“We will assess the court’s ruling and determine next steps to ensure our services in Germany continue,” an Uber spokesperson said in a statement. “Working with licensed PHV operators and their professional drivers, we are committed to being a true partner to German cities for the long term.”

Among the issues identified by the court as violations of German law are Uber’s lack of a rental licence; rental drivers it uses to supply the driving service accepting jobs via the Uber app without first returning to their company’s headquarters; and rental drivers accepting jobs directly in the app without the jobs being previously received by their company.

Uber’s P2P ride-hailing offering has been effectively outlawed across Europe since a 2017 decision by the region’s top court, which judged it a transportation company, not merely a tech platform — which means its business is subject to PHV regulations in each EU Member State. Compliance costs have thus been piled onto its model in the region. 

Uber argues that reform of German transport law is needed to take account of digital business models and app-based dispatch. In the meanwhile, its business demonstrably remains vulnerable to legal challenges around PHVs regulations.

The Frankfurt court ruling also comes hard on the heels of a decision by London’s transport regulator not to renew Uber’s license to operate in the U.K. capital.

The city regulator found a “pattern of failures” which it said put “passenger safety and security at risk” — including unauthorised drivers being able to pick up passengers as though they were the booked driver in at least 14,000 trips.

In that case, Uber can continue to operate in London during the appeals process. The company submitted an appeal last week.

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