Uber has been banned in Berlin, but is continuing to operate in the German capital nonetheless. That’s a financial risk not only for Uber, but for its drivers too — and the company has not as yet promised to pay their fines.
The ban, described by Uber as “not progressive,” came through late Wednesday with immediate effect, meaning Uber is liable for a €25,000 ($33,462) fine each time it illegally carries a passenger. Its drivers — not that it admits to having drivers as such — will also be liable for fines of up to €20,000 ($26,780) for flouting the ban.
When Uber lodges its challenge to the ban, as it says it will, it may succeed in suspending the ban as it did in Hamburg last month, keeping everyone safe from being fined. However, it doesn’t appear to have done this yet.
Taxi association fight
Back in April, taxi operator Richard Leipold, who also runs city taxi association BTV, won a case against Uber because the firm’s cars are unlicensed but run like licensed taxis do – echoes of Uber’s travails in London and many other places in Europe. However, Leipold chose not to enforce the injunction at the time because, if it was overturned, he would have been liable for Uber’s lost earnings.
So on Wednesday, the Berlin Senate’s department of civil and regulatory affairs stepped in with its own prohibition order. It said it was banning Uber in order to protect passengers from the dangers of unlicensed drivers, and also to protect Uber’s drivers, who may not have the right kind of insurance to cover them in the event of a taxi-related mishap. It also noted that it was trying to protect the taxi industry.
Leipold welcomed the Berlin ban in a separate statement, in which he insisted that Berlin’s taxi industry had no problem with innovative apps, as long as they stick to the rules. He cited Taxi.eu, which acts as a European portal to licensed taxis, as an example. If Uber wins its challenge to the ban, it would be the city administration picking up the tab.
Uber will “stand behind” drivers
In a Thursday blog post, Uber said it would challenge the injunction, which it claimed “seeks to restrict freedom and limit mobility in Berlin and beyond.” However, it hasn’t actually filed its challenge yet. A Bloomberg report suggested that Uber has taken out extra insurance to cover its drivers, fixing at least one of the Senate’s complaints.
Uber maintains that it doesn’t have drivers — Fabien Nestmann, the service’s Munich general manager and national spokesman, told me on Thursday that it only provides a platform for drivers and passengers. This takes in both Uber Black (the pricier service) and uberPOP (the cheaper ride-sharing service), both of which are affected by the ban. “Drivers go online when they wish to do so and we’re certainly keeping the platform up in Berlin until further notice,” he said.
Has Uber warned its not-Uber-drivers that they face fines of up to €20,000 for continuing to use the platform? Nestmann said Uber was in “constant dialog” with them. Will it pay their fines? “We will stand behind our drivers very firmly,” he said, refusing to elaborate.
As I wrote in the context of Uber’s fight with London cabbies, it’s important to remember that this isn’t simply a case of dinosaurs resisting change. Berlin’s taxi drivers have to go through training and certification to legally do what they do, and there are restrictions on the number of drivers that are allowed to operate. It’s no wonder that they’re up in arms about services that “allow” anyone to suddenly become a taxi driver – and no surprise that the city’s unhappy about it too.
In the meantime, it’s all very well for Uber to say it will keep operating, but its drivers might want to think twice before doing so — at least until they get a firm promise from the company that it will pay their fines, or until Uber gets its challenge in.
This article was updated at 8.20am PT to emphasise that the ban may be temporarily lifted when Uber lodges its appeal.