Court lifts ban on Uber in Germany

Uber won the lifting of a countrywide ban on its ride-sharing service in Germany when a Frankfurt court ruled that taxi drivers had waited too long before seeking an emergency injunction.
The Frankfurt regional court had issued a temporary countrywide ban on the Uber Pop ride-sharing service this month, threatening fines of up to €250,000 for each trip conducted by Uber drivers in violation of the ban.
On Tuesday the court reversed that decision, saying that although some of the taxi drivers’ legal arguments against Uber were valid, the strict conditions needed to grant an emergency injunction were not met. Uber welcomed the decision to overturn the ban, saying it confirmed its understanding of the law.

Taxi Deutschland, the co-operative of German companies that brought the case, said it would appeal against the decision. It also has the right to file a regular lawsuit in lieu of a fast-track case.

Uber has faced political and trade union opposition to its business model in several European countries but in Germany the dispute has been particularly bitter.

Uber’s battle to establish its app-based ride-sharing service has exposed deep concerns in German societyabout the business practices of Silicon Valley tech companies and the challenge they pose to established industries.Taxi drivers have sought to characterise Uber as a wealthy investor-backed ultra-capitalist enterprise whose drivers operate without the proper permits, thereby threatening the more gentle but rules-governed German social-market economy.

Uber insists it is offering consumers greater choice and has promised to double in size by the end of the year by expanding in more cities across the country.

Given the large number of taxi drivers in Germany, its politicians must tread carefully, but as Berlin emerges as a start-up hub they are also reluctant to appear hostile to the digital economy.

Germany’s economy ministry has acknowledged that the country needs greater flexibility to engage with digital business models. The ministry said in a statement that it was prepared to “adapt existing rules to the demands of the digital world and the changing mobility needs of consumers”.

A spokesman said that this statement did not relate specifically to the Uber case, but to the sharing economy in general, and insisted that regulations concerning quality and safety should be maintained.

Uber Germany described the ruling as “an important step towards recognising Uber as an innovative and legitimate enrichment of the mobility business in Germany . . . We emphatically do not intend to push out traditional taxi businesses. We believe in the freedom of choice and trust the German consumers.”

Dieter Schlenker, chairman of Taxi Deutschland, said: “The ruling does not mean that the assignment of taxi-like journeys to private drivers without approval is legal . . . Politicians must think hard about in which direction they want to steer our society.”

The conflict between Uber and the taxi industry points to a wider malaise in Germany’s domestic economy – a hidebound service sector.

According to the OECD’s survey of the German economy this year, service sector incumbents receive an “elevated” level of regulatory protection. The complexity of regulation is one of the highest in the Oecd, the survey says.