German court orders Uber to suspend services across the country

Town car ride-hailing Uber

Uber is banned across Germany, at least for now. It emerged on Tuesday that the Frankfurt Regional Court imposed a preliminary injunction on Uber last week, ahead of a full court case over the service’s legality.

As the Frankfurter Allgemeine Zeitung reported, the court said Uber was illegal because its drivers do not carry the appropriate permits and insurance. Uber said it will fight the injunction, for which taxi industry body Taxi Deutschland had applied, and will not shut down in the meantime.

Uber has already had some success in similar circumstances in Hamburg and Berlin, where it got different courts to suspend the injunctions ahead of full court hearings. The company sort of won its Hamburg case last week – the court overturned that ban on the grounds that it was issued by the wrong city agency, but it also said that Uber’s drivers were “probably” acting illegally because they don’t have proper licenses, and that Uber itself was also likely breaking the law.

Uber maintains that its drivers are not its employees, and while the Berlin ban was briefly in place it refused to promise to pay those drivers’ potential fines. No drivers were fined in that period of several days between the injunction’s imposition and its suspension, but if the authorities had caught them ferrying passengers they would have lost up to €20,000 ($26,270) each time.

This time around, the stakes are much higher. Each illicit journey could cost up to €250,000, and Uber’s directors could also face jail. That’s a problem when they’re supposed to be aggressively expanding operations in Germany.

“Germany is one of the fastest growing markets for Uber in Europe,” Uber said in a statement. “We will continue to operate in Germany and will appeal the recent lawsuit filed by Taxi Deutschland in Frankfurt. We believe innovation and competition is good for everyone, riders and drivers, everyone wins… Uber will continue its operations and will offer Uberpop ridesharing services via its app throughout Germany.?”?

As for Taxi Deutschland, the association said driver and consumer protection laws cannot be easily overturned by a “neoliberal company” like Uber. It went on to accuse Uber of using its “billions of cash from Goldman Sachs and Google” to try to “overrun the market” while disguising itself as a “new economy savior.” Entertainingly, it also made reference to the “locust shareconomy.”

“An internet rating is intended to replace a proper examination by authorities?” asked Taxi Germany chairman Dieter Schlenker, referring to Germany’s laws around taxi roadworthiness and insurance.

By way of analysis, I’ll just sum up what I’ve said before. Perhaps the rules need changing, but it is deeply unfair to expect traditional cab drivers, who have paid dearly for their licenses with both training time and money, to just roll over when a new operation comes to town, pretending that the rules simply don’t apply.

German cab drivers aren’t resistant to change – they work with apps like Taxi.eu — but they’re right to demand a level regulatory playing field, and the authorities are right to try to give it to them. In the meantime, the authorities should also be making sure that the playing field remains suitable for a range of different business models while protecting both passengers and their drivers.

This article was updated at 3.45 AM PT to include quotes from Uber and Taxi Deutschland.

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