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Cars and Transportation

Uber suffers legal setback in Germany

December 19, 2019

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.

The Uber logo on a smartphone screen
Image: picture-alliance/dpa/O. Berg

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.

Read more: Uber: Nearly 6,000 reports of sexual assault in US over 2 years

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.

The popular app-based service has faced several hurdles to its expansion goals throughout Europe as traditional taxi operators have fought back with court cases and protests, arguing its business model is unfair and puts customers at risk. Uber is currently appealing the denial of its licence to operate in London over safety concerns.

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se/ (AFP, dpa)

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