A court in Germany has banned Uber from offering rides through rental car firms. It's another blow for the US ride-hailing company, which has had its European ambitions curtailed by the courts.
Image: picture-alliance/dpa/O. Berg
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A regional Frankfurt court found on Thursday that Uber's business model in Germany, which relies on the use of vehicles from local car hire companies, violated several anti-competiton laws.
The judges said the company was more than just a go-between connecting drivers and customers, and therefore should have a rental car licence of its own.
"From the passenger's point of view, Uber is providing the service," Judge Annette Theimer said, pointing out that Uber could pick the drivers and set the prices.
The court also noted that not all drivers returned to their head office in between rides as required by law, and accused Uber of not adequately checking the car rental firms it works with.
The court barred the company from offering rides through car hire firms with immediate effect but the judgement can still be appealed. Uber said its German customers could still use the app as it responded to the ruling.
"We will look at it closely and adapt our offer if necessary so we can continue to be there for our users and drivers," Tobias Fröhlich, its head of communications in Germany, said via Twitter.
A workaround
Unlike in other countries, Uber in Germany is not allowed to let nonprofessional drivers offer rides in their own cars, the result of an earlier court ruling. It operates in only a handful of large cities under an alternative business model of using licensed rental car and taxi companies.
Germany's federal association of taxis and rental cars welcomed Thursday's verdict.
"[the court] has made it clear that Uber's system is illegal in Germany," its chief Michael Oppermann said.
German online business federation Bitkom said it showed transport rules had failed to keep up with the times.
"The law protects the profits of taxi companies at the expense of consumers," its head Bernhard Rohleder said.
Uber: The highs and lows of the ride-hailing superstar
Disruption is its game and has turned Uber into a multibillion-dollar global giant. Despite regulatory hurdles and ongoing legal challenges, the company still has ambitious expansion plans for the future.
Image: Youtube/Denís Iglesias
Ride-hailing first tested in US cities
In July 2010, Uber went live for the first time in San Francisco before spreading to other American cities. It quickly grew into a global operation, and today offers ride-hailing services in 600 cities. Along with Airbnb, Uber has seized on the rise of smartphone apps to power the sharing economy. But its huge growth has been met with fierce opposition from regulators and traditional taxi firms.
Image: picture-alliance/Kyodo
Loved by users, hated by officials
Considered a godsend by many consumers, Uber was accused by licensed taxi drivers of circumventing costly transport regulations to undercut them on price. As the ride-hailing app expanded around the world, so did resistance to its attempts to overtake existing taxi operators. Protests and strikes broke out in dozens of cities, including one in Paris, France, where an Uber vehicle was overturned.
Image: picture-alliance/dpa/I. Langsdon
China venture backfired
Protests were not the only opposition to face Uber when it launched in China in 2014. Having made its name by offering low prices, it struggled to make inroads in the world's second largest economy, and eventually sold out to a well-connected local competitor, just as the Beijing government loosened the regulatory burden on ride-hailing apps. The failed venture cost it some $2 billion.
Image: imago/R. Wölk
Regulators get tough
At least nine European countries have banned or restricted Uber's operations, including Germany. The firm was forced to rework its business model after facing the ire of French regulators. In December 2017, the European Court of Justice ruled that Uber can be regulated by member states as a taxi service and not, as it argued, as a digital service provider, connecting consumers with drivers.
Image: Reuters/C. Helgren
Not 'fit and proper'
Regulators in London have terminated Uber's license to operate, citing irregularities in screening drivers and reporting serious criminal offenses. The firm is appealing. Amid complaints of labor rights violations, a British labor court ruled in November 2017 that Uber's drivers are employees – and therefore not self-employed – and ordered the company to pay the minimum wage and cover paid leave.
Image: Reuters/T. Melville
Bro culture comes unstuck
In June 2017, Uber CEO and co-founder Travis Kalanick stepped down after its corporate culture came under scrutiny. While the company faced accusations of dishonesty from global regulators, female employees complained of sexual harassment and an overall sexist and hostile culture at the San Francisco-headquartered firm. After an internal investigation, Uber launched a sweeping reorganization.
Image: picture-alliance/dpa/B. Pedersen
Drivers to be phased out
Despite the controversies, Uber continues to expand. It now offers car-pooling and food delivery services in several cities. In 2016, it tested the first driverless vehicles in the American city of Pittsburgh. It plans to introduce some 24,000 self-driving cars between 2019 and 2021 although drivers will still sit at the steering wheel, monitoring the vehicle.
Image: picture-alliance/AP Images/G. J. Puskar
Uber takes to the skies
Uber faces even more legal and regulatory hurdles for its next venture, which will allow riders to beat urban traffic jams by booking flying cars that will pick them up from skyports on roofs of office blocks. Dallas, Dubai and Los Angeles have given the go-ahead, involving aircraft that look like a cross between a small plane and a helicopter, with fixed wings and rotors. (Author: Nik Martin)
