German cabbies put the brakes on Uber

In an attempt to stop San Francisco-based Uber from cutting into their taxi territory, German cabbies have persuaded a judge to prohibit their rival from picking up passengers, alleging the ride-sharing startup was an example of a “locust share-economy” indulging in “anarchy capitalism.”

Ouch.

From the BBC:

A court in Frankfurt ruled that the firm lacked the necessary legal permits to operate under German law.

It has emerged that the firm was told last week that its “low-cost” UberPop service could no longer take passengers and faced a fine if it continued.

But an Uber spokesman said it had decided not to suspend the service, adding that the ban was not enforceable while an appeal process was ongoing.

“Germany is one of the fastest growing markets for Uber in Europe,” he said.

“We will continue to operate in Germany and will appeal the recent lawsuit filed by Taxi Deutschland in Frankfurt.

 

The New York Times pointed out that the ban is the latest legal woe for the San Francisco company: “Uber could face fines in Germany of up to 250,000 euros, or about $330,000, or its local employees could be jailed for up to six months if the company violates the temporary injunction, which was made last week but came to public light only on Tuesday.”

Uber remains defiant. As an Uber spokesman told the BBC, “You cannot put the brakes on progress. Uber will continue its operations and will offer UberPop ridesharing services via its app throughout Germany.”

A judicial spokesman in Frankfurt said the court, according to the Times,  “found that Uber posed unfair competition to the local taxi industry. It noted that Uber failed to have the necessary licenses and insurance for some drivers and that it could be selective in providing rides, while taxi drivers are required by law to accept anyone needing a ride.

“Our main concern is that, while competition is healthy, everyone has to be playing by the same rules,” said Arne Hasse, spokesman for the Frankfurt state court.

The court’s ruling applies to Uber’s low-cost “UberPop” program, which hooks up its drivers with passengers. The ruling does not apply to Uber’s high-end product, called Uber Black. That service comes with luxury rides and professional chauffeurs.

Valued at $17 billion, the privately held Uber has been on a global roll, offering its services in more than 100 cities in 45 countries. If heavy fines are imposed in Germany, the startup’s rumored IPO could be impacted.

But observers say a huge financial hit is a long shot. As the New York Times pointed out:

Because the court has no enforcement capacity, however, the taxi group that brought the case to court would have to file a separate complaint with the court over any violation of the injunction, case by case, and then the court would ask the police to act.

 

Credit: Associated Press

Patrick May Patrick May (323 Posts)

With more than 30 years on the front line of daily American journalism, I'm currently a staff writer with the San Jose Mercury News, covering Apple and writing people-centric business stories from Silicon Valley.