German court bans Uber car rental services in Germany
20 December 2019
A German court has banned Uber services in Germany stating that the US ride hailing company should secure necessary licence before offering passenger transport services using rental cars.
The verdict of the Frankfurt regional court, issued on Thursday, is effective immediately, but the court said it can be appealed.
The court had, in 2015, forbid Uber from matching up drivers using their own cars with ride hailers.
Uber’s service, which lets customers hail rides carried out in rented cars, is also illegal as it violated multiple competition rules, the court said.
The verdict effectively bars the company from sending ride-hailing requests to rental car companies via its app.
The ruling, over Uber’s dispatching process, follows a legal challenge brought by a German taxi association.
In Germany, Uber’s ride-hailing business works exclusively with professional and licensed private-hire vehicle (PHV) companies — whose drivers and cars have the necessary licences and permits to transport passengers. So the court ban essentially outlaws Uber’s current model in the country, unless it’s able to make changes to come into compliance.
It’s not clear whether Uber will temporarily pause service in the market to come into compliance — it has not said it will do so, suggesting it intends to scramble to make changes while continuing to operate. But if it does that, it risks fines if it’s caught breaching the law in the meanwhile.
“We will assess the court’s ruling and determine next steps to ensure our services in Germany continue,” an Uber spokesperson said in a statement. “Working with licensed PHV operators and their professional drivers, we are committed to being a true partner to German cities for the long term.”
Among the issues identified by the court as violations of German law are Uber’s lack of a rental licence; rental drivers it uses to supply the driving service accepting jobs via the Uber app without first returning to their company’s headquarters; and rental drivers accepting jobs directly in the app without the jobs being previously received by their company.
Uber’s P2P ride-hailing offering has been effectively outlawed across Europe since a 2017 decision by the region’s top court, which judged it a transportation company, not merely a tech platform — which means its business is subject to PHV regulations in each EU Member State. Compliance costs have thus been piled onto its model in the region.
Uber argues that reform of German transport law is needed to take account of digital business models and app-based dispatch. In the meanwhile, its business demonstrably remains vulnerable to legal challenges around PHVs regulations.
The Frankfurt court ruling also comes hard on the heels of a decision by London’s transport regulator not to renew Uber’s licence to operate in the UK capital.