Bits Blog: Uber Banned Across Germany by Frankfurt Court

LONDON – The ride-hailing service Uber is about to have a head-on collision with Germany's taxis and legal system.

A court in Frankfurt has issued an order barring Uber from operating in the country until a hearing later this year on the legality of the service, in which people use smartphones to book rides from freelance drivers.

Uber, an American company, faces fines of up to 250,000 euros, or $330,000, and its German employees face up to six months in jail if the company violates the temporary injunction, which was made last week but came to public light only on Tuesday.

The court ruled that Uber's drivers did not have the required permits or insurance to operate as taxi drivers.

Uber, though, said it would continue operating in Germany and would appeal the decision.

Until a final decision, Uber, a start-up that has been valued at $17 billion and operates in more than 100 cities in 36 countries, may be liable for the fines each time it violates the ban. Uber's local employees who coordinate its local activities could face jail time – but not drivers — under the court order, because the company is mainly responsible for facilitating the bookings.

Uber said in a statement: "We believe innovation and competition is good for everyone, riders, and drivers, everyone wins. You cannot put the brakes on progress."

German taxi associations, which have fought Uber's rise in cities like Berlin and Hamburg, welcomed the ruling, adding that the start-up should operate by the same rules that apply to other German taxi companies.

"We welcome fair competition and a level playing field for all market participants," Hermann Waldner, chief executive of the rival European taxi app taxi.eu, said in a statement. "The taxi industry is now more in demand than ever before, and this judgment is a step in the right direction."

Last month, Uber won a reprieve when a Berlin court suspended a ban by the city's authorities, who had previously ruled that Uber did not comply with passenger safety standards.

Earlier this summer, more than 10,000 taxi drivers from Madrid to London also took to the streets to complain about Uber, which they said did not comply with local rules that regulate the industry.

Taxi drivers and customers in several United States cities have also criticized the company's tactics. Uber has been accused of trying to poach drivers from rival services like Lyft, and some of Uber's drivers have been arrested for illegal activities.

The company says it is increasing competition in taxi markets, particularly in Europe, that have suffered from limited competition and high prices.

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