German court lifts ban on Uber car pick-up service

Deborah Cole
A customer uses an app for the popular car pick-up service Uber in Berlin, in a photo taken on April 24, 2014 (AFP Photo/Britta Pedersen)

Berlin (AFP) - Controversial but popular car pick-up service Uber claimed a victory in Germany on Tuesday when a court threw out an injunction levelled against its operations in Europe's biggest economy.

The regional court in Frankfurt ruled there was no need for an urgent temporary ban against the San Francisco-based firm, which allows passengers to summon cars using an app on their smartphones at prices that significantly undercut rival taxi companies.

The decision means Uber can resume operating legally in Germany, but must await a final ruling on a complaint by the taxi federation as to whether it has the necessary permits to run a business.

The judges handed the company a reprieve but indicated it still had serious qualms about Uber's business model.

"The court still considers it to be unlawful that Uber brings trip requests to drivers who don't have permits under passenger transport law and thus incites drivers to break the law," it said in a statement.

But it said that a temporary injunction was a legal measure only to be issued when there was a "critical, urgent need", which it said had not been demonstrated.

The cab operators federation Taxi Deutschland, which filed the initial complaint, said it would appeal the ruling to a federal court.

It argues that taxi drivers are subject to strict rules and must acquire expensive licences in Germany, making a private service a cheaper and thus unfair competitor.

"The taxi industry accepts rivals when they obey the laws. Uber does not," a federation spokeswoman said.

- 'More choice for everyone' -

But Uber's general manager for Germany, Fabien Nestmann, said the company had no intention of trying to muscle traditional car-and-driver operations out of the market.

"What we want is more choice for everyone," he said.

If Taxi Deutschland is unsuccessful with its federal appeal to win a new injunction, it may file a formal legal complaint against Uber which could tie the matter up in the courts for years.

Uber was defiant after the initial nationwide ban was levelled in late August even though it faced a fine of 250,000 euros ($324,000) every time it flouted it.

The company has been operating in five German cities, including Berlin and Frankfurt, since early 2013 and has trumpeted a major surge in business since the injunction.

But it has faced fierce opposition from local taxi companies, which have invoked court injunctions with some success.

The German government, which has faced criticism for entangling start-up firms in red tape, said it was looking at how well the legal landscape is equipped to deal with "digital sector" companies.

"It will be necessary in terms of our competitive standing to review and, if necessary, adapt existing regulations to the requirements of the digital world and consumers' new mobility needs," the economy ministry said in a statement when asked about the Uber case.

Following the Frankfurt ruling last month, the head of the group's Western European operations, Pierre-Dimitri Gore-Coty told AFP the company was "examining ways of changing the service" to comply with German law.

"We fought the same battle one and a half years ago" in the United States, he said.

Uber is expanding at a rapid clip and now operates in more than 100 US cities.

It has a foothold in 42 countries, with a strong presence in the Asia-Pacific region.

But its move into Europe has encountered opposition from taxi companies, including protests from London cabbies and legal injunctions also in France and Spain.