The Frankfurt regional court has banned the activities of Amsterdam-registered Uber BV throughout Germany, in particular as far as ridesharing with private drivers is concerned (UberPOP, UberX in the US). Each infringement carries a fine of 250,000 euros or a prison sentence of six months. The judge decided that the German Passenger Transport Act (PBefG) also applies to the ‘technology and ridesharing-company’ Uber BV in Amsterdam. Uber BV, a name which regularly shows up in other countries where Uber operates, is the financial and operating company Uber uses in Europe, profiting from advantageous Dutch tax laws for foreign-owned companies.
To date, the activities of Uber(POP) were banned in Hamburg and Berlin. In Berlin, this was also true for the normal Uber-service (Uber Black), which uses private hire vehicles. Under German law, private hire cars must return to their base before they can accept another trip. In the Uber-system they continuously get new trip-offers. After Uber fought the court ruling, the ban was then lifted pending a final court ruling. This does not happen in the case of Frankfurt, as this is a civil case dealing with competition law.
In all three judgments UberPOP was declared illegal because dispatching to private drivers does not comply with German law. But unlike the cases in Hamburg and Berlin, the Frankfurt court case was civil and not administrative and was not brought by a local regulator but by Taxi Deutschland (‘Taxi Germany’), a group of cooperating radio circuits operating throughout Germany and using a country-wide app.
In a similar case against Uber, brought by a taxi company in Berlin, Uber was indeed condemned, but the entrepreneur – wary of immense claims for damages by the US giant – understandably shied away from having the judgment executed. Unfortunately, the massive financial clout behind the US company makes it difficult for smaller parties in the taxi market to protect their position via legal means.
For Uber, Germany is one of the most important markets in Europe. Uber is active in Frankfurt, Hamburg, Berlin, Düsseldorf and Munich. Last week, the company had just announced to go for faster expansion in Germany, probably adding seven new cities.
Dieter Schlenker, president of Taxi Deutschland, who successfully sued Uber BV, noted “that we are regulated by law. Which means protection of the driver and the consumer. That doesnt’t mean that any neo-liberal business unit can simply push these rules aside.” With the Uber-App in UberPOP-mode unlicensed drivers with unlicensed vehicles transport people and “this is not the revolutionary change travellers are waiting for.”
The president of the German taxi organization BZP, Michael Müller, says that this judgment confirms “our sense of justice”: “Transporting people must not be done without a permit from the government or with drivers who do not have a taxidriver’s license. This is done to ensure service quality and the safety of the customer. It is the only way you can be sure that the driver has regular medical checks and vehicles are getting regular technical checks. This way you can be sure that the car and the driver are adequately insured for such operations and that taxes and social contributions are paid.” Müller says the taxi trade is not against competition, providing the same requirements apply to all operators. And that also means Internet-entrepreneurs.”
CEO Hermann Waldner, CEO of Taxi.eu and Taxi Berlin, with over 5,000 taxis the largest taxi group in Berlin, was pleased with the verdict in Frankfurt “as a contribution to fair competition under the same conditions for all market parties.” Waldner who, via Taxi. Eu, represents some 100 taxi radio-circuits with 52,000 taxis in 9 European countries, also saw this ruling as an example to follow for judicial decisions in other countries.
Dieter Schlenker continues: “Uber works with billions of capital from Goldman Sachs and Google and promotes itself as a young start-up and sells itself as the forerunner of the New Economy. Uber rakes in money without even investing in the taxi trade and takes no responsibility: “drivers are not checked, are not insured, receive no fixed salary and the vehicles are not even licensed nor insured. Taxi passengers have no protection and tax payments aren’t made. In this form of cockroach-shareconomy both the state, society and the workers lose.”
Schlenker says that it is not “old versus new economy or modern versus old-fashioned,” Uber demands new laws and with loads of money from investors, attempts to steamroller the market creating new ‘facts’. In the meantime the transport by taxi is characterized as ‘old-fashioned’. It still makes no difference whether a ride is arranged via an app, or on a street corner or booked by phone. It still involves the transport of people by car from A to B.”
According to Schlenker, the state has created a set of checks on driver and vehicle in order to protect both taxi operator and driver. There’s also a proper insurance coverage attached to it. Recently a ‘hobby driver’ of Wundercar (similar to UberPOP/UberX) lost his insurance cover after the insurer had noticed that this driver was doing illegal taxi work. “Uber knows very well that in case of an accident in UberPOP, the taxi passenger is not covered”, says Schlenker. Moreover, in Germany ‘shared ride systems’ in which drivers offer a ride to people for a fee, but not for profit, have been operating legally for years.
Uber says it is only a ‘mediator’ and has nothing to do with the actual transportation, but according to (not only) German law instigating and helping to commit an offense or a crime are also punishable.
In almost all countries where Uber started and where it launched UberX (USA) or UberPOP, it draws heavy fire from the taxi and FHV industry for unfair or illegal competition. On June 11, taxi operators in several European countries protested against this American technology giant which is currently valued at over 17 billion dollars. Both in Amsterdam and Brussels UberPOP is prohibited. In Brussels more than 13 cars were seized already and in Amsterdam the national taxi-inspectorate (ILT) says it will “check rigorously for ‘pirate taxis’.”
Under its cheeky blog headline ‘Keep calm and Uber on’ Uber has already indicated it will certainly appeal against the decision of the Frankfurt court. According to the BBC German authorities warned Uber last week that its UberPOP service was in breach of German law and threatened a fine if it continued carrying passengers illegally.
But Uber says: “Trying to limit people’s choice doesn’t ever seem like a good idea. However, it was the idea behind the recent lawsuit filed by Taxi Deutschland in Frankfurt. We believe innovation and competition is good for everyone – riders and drivers, everyone wins. You can’t put the brakes on progress. The services offered via Uber’s app have been embraced by German riders and drivers. There is a reason why Germany is one of the fastest growing markets in Europe. It is because German people love smart choices, smart cities and Uber’s first class service.”
An Uber spokesmen told the BBC that the company with its’ ‘low cost’ service would not stop because a ban during the appeals procedures would be unenforceable, “We will continue our activities in Germany and appeal against the case which has been filed by Taxi Deutschland in Frankfurt. You can not slow down progress. Uber goes on and will continue to offer its services via its app throughout Germany.”
• Dieter Schlenker (Taxi Deutschland): “Uber rakes in money without even investing in the taxi trade and takes no responsibility.