The fight for ride sharing is on. Only last month the on-demand ride-hailing service Uber was looking at a ban in Berlin, Germany, on the grounds of passenger safety. That ban was subsequently suspended only days later. The court involved is still undetermined over the rules on the legality of the issue.
Seconds out, round two. Ding ding. Uber is now facing yet another legal injunction in the country, only this time a district court in the city of Frankfurt has issued a temporary ban against its service, applicable nationwide. The latest injunction, was issued towards the end of last week, is reported to be enforceable until the start of any hearing appealing the ban, this makes it very likely to be lifted in the near future.
The heavyweight in this title match is the German taxi industry. The problem is centred around the lack of an official permit for Uber to operate in the country under Germany’s Passenger Transport Act. The court is accusing Uber of unfair competition vs regulated taxi industries. This is apparently due to Uber’s undercutting price model, which relies on the driver using his or her own vehicle to offer a ride-hailing service.
A recent report in Spiegel Online noted the Frankfurt injunction carries a heavy penalty/fine of €250,000/$330,000 per violation, and even threats of jail time against Uber’s directors.
Dieter Schlenker, chairman of taxi companies’ co-operative Taxi Deutschland, provided a statement to the FT, which accused Uber of disingenuous behaviour, given how well funded the company is. “The Passenger Transport Act regulates the protection of drivers and consumers. That can’t easily be overturned no matter how neoliberal the company. Uber operates with billions in cash from Goldman Sachs and Google, wraps itself in a Startup-Look and sells itself as a New Economy saviour,” Schlenker said.
Uber currently has a $17bn valuation, and has huge funding muscle plus a array of big name backers, including firms such as Google and Goldman Sachs, fuelling the firms expansion programs.
In this latest bout in the ride-sharing fight, Uber is able to object to this latest injunction from Frankfurt and can ask for an annulment of the court’s decision. The company hadfiled an objection to the earlier ban in Berlin, and has been able to continue operating there in the legal interim period.
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