German court bans Uber

German court bans Uber

Summary: A Frankfurt regional court ruling has resulted in Uber being banned across Germany.

TOPICS: Start-Ups, Legal

A German court has slapped an injunction on the popular car pick-up service Uber, stopping it from operating across Germany, because it lacks the necessary legal permits.

The ruling, which Uber has indicated it will appeal, was issued by the Frankfurt regional court last week but only made public on Tuesday.

The San Francisco-based firm allows passengers to summon cars using an app on their smartphones and the service is often significantly cheaper than that of rival taxi companies, which lodged a complaint at the Frankfurt court.

Uber faces a fine of €250,000 if it ignores the ban.

The service, available in Germany since early 2013, has already been banned in a number of German cities, including Berlin.

Under the Frankfurt court's ruling, the ban is now nationwide.

The German taxi federation BZP welcomed the ruling, insisting that the legal permits required under German law "are not an end in themselves, but safeguard quality and customer protection."

"We're not frightened by new market players. But competition can only function if the same legal conditions apply to every one, including new market players," BZP said.

"Internet services do not operate outside the law."

Uber has been the subject of protests by taxi drivers in many European cities, including Paris and London.

Topics: Start-Ups, Legal

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  • While Germany is entitled to make its own rules...

    ...I don't see any real need for what amounts to a taxi service to be subject to federal regulation. It wouldn't hurt anything for the states to be allowed to make their own decisions on whether to allow services like Uber.
    John L. Ries
    • That isn't the only problem.

      The real issue is Uber's shady business model. They simply refuse to play by the rules and now they got the consequences.
      Their drivers have no insurance at all and they put traditional taxi services out of business because they don't give a damn about federal regulations.
      Whether these regulations are important or not is debatable, but personally I prefer transportation services to run under some guidelines to make sure I get from point A to point B in one piece... Either way, these regulations do exist so when Uber ignores them that gives them an extremely unfair advantage over the competition.
      Competition is a good thing. But it becomes useless or even an extreme pain in the ass if it doesn't happen on a level playingfield. That is not the case here, so I think Uber deserves this court ruling.
      • Works both ways

        Regulations can be and sometimes are used to maximize barriers to entry to the benefit of incumbent vendors and to the detriment of potential new entrants and consumers (even if such was not the intention). So the questions to be asked when imposing commercial regs are:

        1. Why is this necessary?
        2. Who is the regulation designed to protect?
        3. Who is pushing for it (if anyone)? Why (really)?
        4. What are the likely consequences, both good and bad?

        Back when I was a lot poorer than I am now, I avoided taking taxis because they were more than I could regularly afford (much cheaper to bus and bike) and I know that at least some of that cost was regulatory. Was I benefited by a service I couldn't afford to use? Really?

        Mind you, commercial regulations are frequently necessary, but they can be and are overdone. And it's important to remember that nothing is free, even inaction.
        John L. Ries
        • Mind you...

          ...there is no excuse for vendors to willfully break the law. Lobby for changes if you must and get the people on your side, but follow the rules.
          John L. Ries
      • Why do the regulations exist?

        Often in industries, it is main industry players that write the rules, and the rules favor the established players. I am not saying that regulations are all bad. Rather that once an industry is established, the established players are the onse who can afford to hire the lobbyist who inform the legislators and regulators about what laws need to be written. Frequently the rules stop being about public good and become more about protecting the established interest.

        Uber is a good example of how the market clearly wants fewer rules and better prices. The established player are only hamstrung by the rules because they help maintain them for their own benefit, not the benefit of the public or the market. If you want to hire a more expensive, but less risky service that is up to you, why should everyone have to have the same level of risk management as you?
        • It sometimes happens...

          ...but not always. To that extent, laizzez faire is as much of an overreaction as over-regulation is. The tricks are to make sure that the regulators are actually dedicated to using their authority to serve the public interest instead of their own, and to make sure that the regulations actually enacted do more good than harm (perhaps it would help if regulators were required to make a rational case for the regs before they take effect).

          As noted in the previous post, nothing is free, not even inaction.
          John L. Ries