German Court Bans US-Based Ridesharing Service Uber
A Frankfurt court on Tuesday barred the ridesharing service Uber from operating in Germany without a permit under the country's transport laws according to the Associated Press.
The court said Uber lacked the necessary commercial license to operate. Under German law only drivers can pick up passengers without a commercial license if they charge no more than the operating cost of the trip. Uber charges some tiers of drivers a 20 percent gratuity on all trips, so the court held it liable and issued an injunction against the service.
The court decision comes from a lawsuit filed against Uber by Taxi Deutschland, a German cab association that also offers its own taxi-ordering app.
The plaintiff's argued Uber didn't have to follow the safety and insurance regulations that apply to traditional cabs, that the app undermined their livelihood, and created unfair competition.
Thousands of drivers in London, Paris, Berlin and Madrid held a national day of action on June 11 protesting the service.
"It´s unfair competition," said José Antonio Benitez, 46 years old, who has been driving taxis for 21 years in Madrid, to the Wall Street Journal. "The government says they want a free market, but one that only hurts taxi drivers."
San Francisco-based Uber said in a statement it would use "all legal means" to fight the case.
"It's never a good idea to limit people's choices," Uber said. "We believe that innovation and competition is good for everyone -- it profits both drivers and passengers."
The ruling comes after Berlin authorities barred Uber from operation in the capital because of safety concerns.
There are thirteen active lawsuits filed against the company in the U.S. over regulations in cities such as Boston, Chicago, Houston, Oklahoma and Seattle, and 11 state insurance agencies are suing over its insurance practices in California, Connecticut, Illinois, Massachusetts, Nebraska and Ohio.
The San Francisco app company, Uber offers an online chauffer service, currently operating in 150 cities around the world.The plan works by enlisting drivers over 21, with personal auto insurance, who undergo a background check.
The company claims a driver in New York can make as much as $90,000 but investigations have proven otherwise.
"One uberX driver in New Jersey who drove 12 hours in one day says he made $180 in gross fares. So that's $15 an hour. But accounting for tolls, Uber's 20 percent cut, gas, car insurance, vehicle financing, and self-employment taxes, the driver really only made $54.50 for 12 hours of driving. So that's just $4.54 an hour -- far below minimum wage," according to Business Insider.
But New York City is not suing Uber, because the company complied with the rules and regulations stipulated by the Taxi and Limousine Commission.
"That's probably the big difference," said John McDonagh, a veteran New York cab driver told Latin Post. "What the taxi industry is complaining about is what the music industry complained about Napster, and all the new technology that came down the road, and what the movie industry is complaining about in that industry. That's just what's happening. What the taxi industry should be doing is trying to find out how to maximize the use of these apps then stopping them. Because it has helped me tremendously for getting extra fares."
McDonagh also said the Uber or Halo system will saturate the market to begin with, but then it will thin out. He said it is better for the customers, "It cuts out discrimination of anyone on the street. A lot of African-Americans complain they can't get cabs, cabs pass them up. With the new technology, if you get a hit you have to pick up that person, because on every fare you get a review and you do a review of the passenger. So if you get two or three complaints, 'He wouldn't take me because I'm black' or 'He wouldn't take me to where I wanted to go,' the company throws you off the app. We're getting closer and closer to the customer. When I started this a year and a half ago I could be ten minutes away from customer, now it is two or three minutes."
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