Blow for Uber as Finnish court orders two drivers to give up earnings

[September 21, 2016]  HELSINKI (Reuters) - Finland's court of appeal ordered two Uber drivers on Wednesday to give up their earnings to the state for not having a valid taxi license, dealing a blow to the ride-hailing service.

Uber Technologies Inc [UBER.UL], which has faced bans and protests from established taxi operators around the world, is legal in Finland provided its drivers hold a taxi license.

But the length of time it takes to get a permit has led some drivers to work without one, leading to a debate within Finland about whether the system should be reformed.

The government presented a bill on Tuesday to deregulate the taxi market from 2018, but the initial plan to let drivers earn up to 10,000 euros ($11,150) a year without a permit was dropped due to opposition from the nationalist Finns party, part of the coalition.

The appeal court decision, which confirms earlier local court verdicts, confiscates earnings of 12,250 euros and 2,800 euros respectively from the two drivers.

Uber's Finland country manager Joel Jarvinen said a police crackdown on drivers without licenses was regrettable at a time when the government was preparing changes in taxi regulation, but declined to comment further on the verdicts.

The rulings will likely be followed by several similar cases while current legislation is in force, the police said.

"Right now we have around 30 (Uber) cases proceeding to consideration of charges and a bunch of others under investigation," Inspector Pekka Seppala said.

According to Uber, more than 100,000 Finns have downloaded its mobile app, and thousands use the service every week.

While drivers will still need permits under the government's new bill, annual permit quotas and fare restrictions will be removed, which could help new entrants to the market.

"It is positive that the reform goes forward, it allows more flexible traffic solutions ... But it is regrettable that the bill does not take any notice of small-scale ride-sharing," Uber's Jarvinen said, adding the transition period felt long.

(Reporting by Jussi Rosendahl and Tuomas Forsell; Editing by Mark Potter)

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