Uber Hit with Ban in Germany

Published on: 20 Dec, 2019

Uber Technologies (NYSE: UBER) was hit with another blow after a regional court in Frankfurt, Germany banned the Company from sending ride-hailing requests to rental car companies via its app, according to TechCrunch.

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

According to Reuters, the plaintiff in the case, Taxi Deutschland, is seeking immediate provisional enforcement, with threat of fines of EUR 250.00 per ride or up to EUR 250,000 per ride for repeated offences if Uber fails to make necessary changes.

In Germany, Uber’s ride hailing service works exclusively with professional and licensed private-hire vehicle (PHV) companies. All drivers and vehicles have the necessary permits and licenses to operate.

In the situation, it would prohibit Uber from operating its current business model in Germany, unless it can make changes to meet compliance.

Uber can appeal the decision, however, the Company did not respond to comments if it intends to or not.

The ban is in effect immediately, however, it is not clear whether Uber will pause services in the market. TechCrunch noted that Uber may likely continue to operate, while working towards operational 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.”

In the court filings, it claims Uber has violated German laws such as Uber’s lack of a rental license, the rental drivers hired to supply the driving service accepting jobs via 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.

The Frankfurt court ruling comes shortly after London’s transport regulator decided not to renew Uber’s license to operate in the United Kingdom, citing concerns over a “pattern of failure” and putting customers “safety and security at risk.” Uber submitted an appeal last week to fight the decision.

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Bryan Shin

Email: Bryan@financialinsiders.com

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