German court ruling effectively bans Uber from operating in Germany

German court ruling effectively bans Uber from operating in Germany
Finance

A Frankfurt court has effectively banned Uber’s ride-hailing service in Germany, according to Reuters, in yet another major setback for the company after losing its license to operate in London.

In Germany and much of the European Union, Uber exclusively works with licensed drivers through private hire vehicle companies, to comply with a 2017 decision from the region’s highest court. That ruling classified Uber as a transportation company rather than a tech platform, making it subject to each EU member state’s rules on private hire vehicles. 

Now, a Frankfurt court has ruled that Uber’s business model violates Germany’s competition rules. Uber presents itself to customers as the provider of the transport service, the court argued, and also selects specific drivers and prices. 

“From a passenger’s point of view, Uber provides the service itself and is therefore an entrepreneur,” according to the presiding judge. As such, the court said, the company must comply with laws on passenger transport.

The court ruled that Uber lacks the license necessary to employ for-hire drivers. The ruling also stated that drivers accepting jobs through the app instead of their official employer, and accepting each job without returning to their company’s main office, amount to violations of German law. 

Uber will be able to appeal the decision, but it will be enforceable immediately. The company hasn’t yet said whether it will take steps to comply while continuing to operate, risking fines, or if it will stop providing service while making the changes. 

“We will assess the court’s ruling and determine next steps to ensure our services in Germany continue,” an Uber spokesperson told TechCrunch. “Working with licensed PHV operators and their professional drivers, we are committed to being a true partner to German cities for the long term.”

Taxi Deutschland, the plaintiff in the case, said it would seek immediate enforcement of the ruling, with fines starting at €250 per ride and rising to €250,000 for repeated offenses. 

Last week, Uber appealed London’s decision not to renew its license over safety concerns. Uber has already been blocked from operating in Copenhagen and Hungary, and Germany represents Europe’s largest economy. It currently operates in seven German cities including Berlin, Frankfurt, and Munich.

The company recently reported net losses totaling $1.1 billion, in its first earnings report since going public. 

Photo by Matti Blume, MB-one [CC BY-SA 2.0 de (https://creativecommons.org/licenses/by-sa/2.0/de/deed.en)]

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