Car-hailing service Uber is in more legal hot water, which could see one -- but not all -- of its services banned in Germany in the coming weeks.
A three-judge panel in the Frankfurt District Court in Germany has issued a preliminary decision banning UberPop across the country. The decision, rendered Wednesday, would mean the company's low-cost UberPop carpooling service will not be allowed to operate in Germany and Uber could face a fine of up to 250,000 euros (about $266,000) for operating the service after the ban is implemented.
Though that may sound bad, the nuances of the decision mean Uber isn't in as bad of a spot as some might think. For one, the ruling is preliminary and a full ruling won't be issued for three to four weeks. During that period, UberPop is allowed to operate, though it's likely that once the final ruling comes down, UberPop will need to immediately end service. In addition, the ruling has no impact on Uber's Uber Taxi and Uber Black services in Germany, which will continue to operate unimpeded.
Uber's car-sharing service is broken into several categories. Uber Black is the standard Uber service, providing customers the ability to hail a "high-end sedan" piloted by an Uber driver. The company's Uber Taxi operates in a fashion similar to other taxi services and uses the same kinds of cars as competitors. As they would with Uber Black and other Uber offerings, users of Uber Taxi can hail a cab from the company's mobile app, which connects riders and drivers.
UberPop, meanwhile, is a low-cost service similar to UberX in the US. Unlike other Uber services that have drivers who operate a vehicle designed for taxiing people back and forth, UberX (or UberPop as it's been known in Germany and Paris) is a peer-to-peer service that allows Uber users to pick up others and bring them wherever they're going. Because those drivers are just Uber users, some have argued that their lack of a taxi license makes operating UberPop illegal.
The lawsuit against UberPop in Germany was brought before the court by local taxi consortium Taxi Deutschland. The consortium argued that UberPop is illegal because its drivers do not have the proper licenses to cart passengers back and forth. It was a charge agreed to by the three-judge panel, which said that all drivers who taxi people to different locations must have a proper license.
The argument echoes the French government's sentiment in December when it banned UberPop from the country, effective January 1. The government agreed with taxi companies that argued Uber was benefiting from an unfair advantage by offering its UberPop service. Taxi licenses in the country can cost up to $300,000, and since UberPop drivers are not licensed with a taxi service, do not need to pay that significant cost to carry customers. Uber said at the time that it would challenge the ruling.
Uber said on Wednesday that it would also challenge the ruling sent down by the German court. In a statement, Uber's Munich general manager, Fabien Nestmann, said that while his company respects the German court system, it would "file an appeal against today's decision."
"This decision also affects the thousands and thousands of riders who have come to rely on a safe, affordable way to get around town and the drivers using the Uber platform to reduce the costs of running their own vehicles," Nestmann said in the statement, adding that Uber is already working on "an alternative ride-sharing service" that would fit within German regulations.
The court ruling is just the latest in a string of setbacks for Uber. Earlier this month, the company was forced to suspend its UberX service in Seoul after a months-long row with government officials. Uber has also faced cease-and-desist orders in Pennsylvania and Virginia and was forced to suspend service in Nevada and Portland, Ore., in the face of government resistance. The service was also banned last year from Delhi, India, after a passenger was allegedly raped by an Uber driver. Spain, too, has said the service is illegal.
Also this month, officials in the Japanese city of Fukuoka cracked down on Uber, saying that it violates the law by operating an unlicensed taxi service.
