In its ruling, the Frankfurt Regional Court said the company could
no longer offer its phone apps to connect drivers with passengers,
stating that Uber's network of drivers lacked the necessary
commercial licenses to pick up passengers.
Uber responded in a statement that it planned to appeal the court
decision and in the meantime would continue operating across
Germany, a country where its customer base has grown fivefold so far
The court's decision raises the stakes for Uber in Germany. The
company has had to fend off legal challenges for months in Berlin
and Hamburg on issues ranging from licensing to whether its drivers
are fully insured to carry passengers.
But San Francisco-based Uber, which allows users to summon taxi-like
services on their smartphones, has faced regulatory scrutiny and
court injunctions from its early days, even as it has expanded
rapidly into roughly 150 cities around the world. German law allows
drivers to pick up passengers without a commercial license if they
charge no more than the operating cost of the trip. As the middleman
connecting drivers and passengers Uber stands to take a cut of any
charges and the court issued an injunction against the service.
The company offers two main services, Uber, its classic low-cost,
limousine pick-up service and Uberpop, a newer ride-sharing service,
which connects private drivers to passengers - an established
practice in Germany that nonetheless operates in a legal gray area
of rules governing commercial transportation.
"You cannot put the brakes on progress. Uber will continue its
operations and will offer Uberpop ridesharing services via its app
throughout Germany," Michel Doermer, an Uber spokesman in Frankfurt,
said in a statement.
Legal experts said the ruling would apply nationwide unless it
succeeds in overturning the injunction or limiting its scope.
Founded in 2009 and valued at $18.2 billion after its latest funding
round in June, Uber Technologies contends that it is an electronic
marketplace that connects drivers with customers, not a
transportation service itself.
Drivers must carry a valid driving license and undergo a background
check before they pick up passengers, Uber says. The suit was
brought by Taxi Deutschland, a Frankfurt-based consortium of taxi
companies operating in major cities across Germany. Taxi Deutschland
offers its own taxi-hire apps for smartphones.
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The ruling drew praise from other industry groups including Taxi.eu,
saying it put Uber drivers on a "level playing field" with the
150,000 drivers it counts in its pan-European network.
Germany's Federal Ministry of Transport issued a statement following
the court decision reiterating that rules on passenger transport
services were a matter regulated state by state.
Last week, an administrative court in Hamburg overturned a previous
Uber ban by the Hamburg Ministry of Economic Affairs, saying the
ministry did not have jurisdiction and that a ban would contravene
passenger transport regulations.
Uber has appealed a ruling against it in Berlin and continues to
operate pending a final verdict. Other German cities have also been
considering bans, according to media reports. Earlier in August, a
Paris court demanded that Uber change how its driver invoice system
works to meet local rules.
Even in its home city of San Francisco, Uber has had to overcome
legal and regulatory hurdles from city authorities concerned its
services sidestep rules governing commercial transport and by taxi
companies hoping to keep competition out.
Taxi drivers across Europe caused chaos in June by protesting
against the service but Uber services have continued to grow in
Uber last week said it was experiencing "huge demand" for its
services in German cities including Berlin, Frankfurt and Hamburg
and that it planned to expand into Cologne and Stuttgart by the end
of this year.
(Additional reporting by Christoph Steitz in Frankfurt and Jan
Schwartz in Hamburg; editing by David Clarke)
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