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German Court Lifts Ban on Uber Car for Hire Service

German Court Lifts Ban on Uber Car-for-Hire Service

By Reuters | Updated: 16 September 2014 21:19 IST

A Frankfurt judge has lifted a temporary injunction on online taxi service Uber, only two weeks after barring the Silicon Valley company from operating a novel car-sharing service across Germany.

Frankfurt Regional Court Judge Frowin Kurth said on Tuesday that the issues in the case brought against Uber by German taxi operator group Taxi Deutschland deserved a fuller airing in court, but lacked the urgency for a temporary injunction.

"There could still be grounds for an injunction" against Uber, Kurth said in deciding on the company's appeal of the court's original decision. "But during our deliberations it became clear there was no grounds for an immediate injunction."

Taxi Deutschland had sought the injunction as part of a civil lawsuit to bar the company's ride-sharing service, citing what it saw as unfair competition by Uber against the professional taxi drivers that it represents.

The original injunction barred Uber from using its Uberpop mobile phone app to connect ride-sharing drivers to potential passengers, ruling that Uber's network of volunteer drivers lacked the commercial licences to charge passengers for rides.

(Also See: Uber Germany Operations Barred by Court)

Each infraction of the court's injunction carried fines of up to 250,000 euros ($323,775). Uber quickly appealed the ruling, leading to Tuesday's hearing.

Taxi Deutschland said in a statement the judge's decision had nothing to suggest that Uber's ride-sharing service was legal under German law, and expressed bafflement over why he had reversed his decision.

"We can not understand this decision," it said. "The taxi industry accepts competitors who comply with the law. Uber does not. That is why we are announcing today that we will go immediately to appeal," the taxi association continued.

The judge said he would issue a written ruling eventually.

The lawsuit, which pits taxi operators against the fast-growing U.S. start-up recently valued around $18 billion, has underscored Germany's mounting unease over the impact of digital technology on established businesses and institutions.

Four-year-old Uber, which allows users to summon taxi-like services on their smartphones, has faced down regulatory scrutiny and court injunctions from its early days, even as it has expanded rapidly into roughly 150 cities around the world.

The judge said during the hearing that he considered Uber to be a direct competitor with taxi operators, rebuffing Uber's position that it merely operates an online marketplace to connect drivers with passengers. This, it had argued, should free it from rules governing taxis and other commercial drivers.

(Also See: Uber India Silent on RBI's Circular Mandating 2-Step Payment Verification)

German law allows drivers to pick up passengers without a commercial licence if they charge no more than the operating cost of the trip. As the middleman connecting drivers and passengers, Uber stands to take a cut of any charges and the court issued an injunction against the service.

The company offers two main services, Uber Black, its classic low-cost, limousine pick-up service, and Uberpop, a newer ride-sharing service, which links private drivers to passengers - an established German practice that nonetheless exists in a grey area for rules governing commercial transport.

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