A court in Frankfurt, Germany has banned UberPop, the hugely popular internet service that allows cell phone users to arrange for rides with freelance drivers. The court ruled that UberPop created unfair competition for local taxi companies because the freelancers do not meet the same licensing and insurance standards required of taxi drivers. The court also noted that the freelancers could pick and choose which fares they would accept while taxis are required to provide service to everyone who asks for a ride.
“Our main concern is that, while competition is healthy, everyone has to be playing by the same rules,” said Arne Hasse, spokesman for the Frankfurt state court. The ban applies not just in Frankfurt but to all of German but does not apply to UberBlack, another online application which matches riders with chauffeur driven luxury automobiles.
The legal action was brought by Taxi Deutschland, a German trade group. In a statement, its chairman, Dieter Schlenker, compared Uber to a “locust”. He specifically attacks the investors behind Uber, saying, “Uber operates with billions of cash from Goldman Sachs and Google, wraps itself up to look like a start-up and sells itself as the savior of the new economy.” Uber is partially funded by Google’s venture capital unit.
In a statement, Uber said “You cannot put the brakes on progress. We believe innovation and competition is (sic) good for everyone – riders and drivers, everyone wins.”
Uber has faced stiff opposition from traditional taxi service providers all across America and in many European countries. A court in the UK is currently reviewing a legal challenge similar to the one in Germany. Supporters and opponents are lining up on both sides of the issue and conducting a war of press releases.
Oddly, the German court has no power to enforce its order. While Uber faces a fine of up to 250,000 Euros, Taxi Deutschland must file a new legal action if it wants to enforce the court’s decision. Uber remains defiant, saying it will continue to operate as usual while it appeals the Frankfurt court’s ruling.
Source: The New York Times