Free Way

Uber the Moon

Uber
Uber is now a driving force in Germany.
  • Why it matters

    Why it matters

    Uber’s ride-sharing service challenges taxi drivers’ business and the legal framework around it. Will Germany make space for this new business model?

  • Facts

    Facts

    • A court reversed the ban on Uber’s services which followed legal complaints filed by the taxi industry.
    • The ban in Germany was one of the most severe restrictions of Uber’s services which are offered in 100 cities in 45 countries.
    • In Germany, the dispute over Uber’s services rests on whether the service contravenes the German Passenger Transport Act; Uber said as it is an “intermediary” business, this does not apply.
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    Audio

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The reversal of a ban on Uber in Germany is just the latest twist in the rollercoaster fortunes of the ride-sharing service.

Uber can operate in Germany, judges said Tuesday, overturning a previous court decision stopping the service from connecting drivers using a smartphone application.

The court heard the arguments of taxi drivers who saw Uber as a threat to their business. But they found that the delay in challenging the service meant that the imposed ban had to be overturned.

Uber launched its service in Germany in April but had been banned from operating in the country after legal action was brought by Taxi Deutschland. Now the injunction has been lifted because the German taxi drivers’ association brought the case in August rather than within two months after its launch.

The dispute over whether Uber contravenes the German Passenger Transport Act remains unresolved. While the court reversed the injunction, it did not decide on this point.

Facing difficulties in entering the German market, Uber hired hotshot lawyer Rupert Scholz from law firm Hengeler Mueller.

“After all, when a used car is sold on eBay, it is the seller who is liable, not the auction platform.”

Rupert Scholz, Lawyer

Mr. Scholz, an expert in constitutional and European law and a former defense minister under former Chancellor Helmut Kohl, has written a powerful and compelling 18-page report questioning the judgments and decisions against the U.S.-based firm. His report was submitted last week to the district court in Frankfurt.

While judges have threatened Uber with fines up to €250,000 ($323,405) for each alleged offense, Mr. Scholz argues the company’s business model is legal in Germany. His primary argument is that Uber is not a taxi or transport operator covered under the German Passenger Transport Act, but a purely intermediary service. The cost of service is worked out between the driver and the passenger. If the driver lacks a license for transporting passengers, Mr. Scholz said, Uber should not be held responsible.

 

uber 2 dpa
Hit the road, Jack – all drivers are potentially taxis now. But for how long? Source: DPA

 

“After all, when a used car is sold on eBay, it is the seller who is liable, not the auction platform,” Mr. Scholz told Handelsblatt.

Additionally, Mr. Scholz believes previous decisions violate German constitutional law, which protects free choice of professions including intermediary services. Restrictions can only be put in place if there is “a direct threat to the common good.” The constitutional law expert said Uber doesn’t meet the criteria.

“At most,” Mr. Scholz said, “Protection against competition for the taxi trade is meant to be gained through the ban on intermediary services.”

Christopher Schlautmann writes about the retail industry for Handelsblatt and previously wrote for a trade magazine about the sector. To contact the author: schlautmann@handelsblatt.com

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