Uber hit by ride-sharing injunction in Germany

Uber’s ride-sharing service has been banned in Germany, the second time in less than a year that the smartphone app has faced a nationwide restriction in one of its most important markets.

The injunction imposed on the company’s UberPop service at Frankfurt regional court on Wednesday means it faces fines of up to €250,000 each time it operates the service in the country.

The ruling does not affect Uber’s other services in Germany but highlights the problems the company is having expanding its ride-sharing service in continental Europe.

It also comes just days after French police raided the company’s offices in Paris as part of a criminal investigation into UberPop, which has been banned in France since January 1.

Uber is already barred from offering a profitmaking, ride-sharing service by city authorities in Berlin, Hamburg and Düsseldorf because its partner drivers do not have a passenger transportation licence.

The company responded to these charges by slashing ride-sharing fares from €1.60 to €0.35 per km in these cities, making it impossible for drivers to make a profit.

The regional bans have effectively choked Uber’s growth in Germany. The company said ahead of Wednesday’s ruling: “In these cities . . . we cannot grow as quickly as is necessary to meet demand.”

But Uber said it will continue to offer UberPop in Munich and Frankfurt until Taxi Deutschland, the taxi operators’ association which brought the case to court, puts up the €400,000 security deposit required by the Frankfurt court ruling. Taxi Deutschland said on Wednesday that it planned to provide this security “promptly”.

Uber regards the bans in France and Germany as incompatible with its rights under European law, and has appealed to the European Commission. “This is above all a defeat for all those who desire more choice over their personal mobility. It is a defeat for the whole of society as personal transport services will, for now, remain expensive, and therefore not accessible to all,” the company said.

Dieter Schlenker, chairman of Taxi Deutschland, said: “We are pleased that justice has been reinstated today. Again, a court has determined that Uber bases its business model on a breach of the law.”

An emergency injunction banning UberPop was imposed in Germany last year, but it was overturned in September.

Uber has also said that it is working on an alternative ride-sharing service which would be compatible with German law.

The country’s taxi drivers are subject to extensive regulations including health checks, fixed fares and liability insurance, which taxi companies say is about eight times more expensive than a standard private driver’s insurance.

Mr Schlenker said the ruling would protect the jobs of about 225,000 drivers in Germany and ensure they are not replaced by “unqualified Uber-odd-jobbers”.

The San Francisco-based company, which closed a $1.2bn funding round in December that valued the company at $40bn, faces continued difficulties in Europe despite attempts to mend relations with regulators.

In January, Travis Kalanick, Uber’s chief executive, told the DLD conference in Munich that the company would create 50,000 jobs in Europe this year, part of a strategy aimed at softening the company’s combative image.