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Europe Considers Hitching a Ride with Uber

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Clearing the road ahead for Uber?
  • Why it matters

    Why it matters

    Ride-sharing service Uber has stirred up the Germany taxi industry, but the E.U. Transport Commissioner may prove to be a useful ally.

  • Facts

    Facts

    • Taxi unions and companies have strongly opposed competition from Uber.
    • A German court banned the UberPop app countrywide in March; the only cars that can provide rides for Uber in Germany are licensed taxi cabs.
    • E.U. Commissioner for Transport Violeta Bulc is considering legislation to allow the service to operate across Europe.
  • Audio

    Audio

  • Pdf

The U.S. app Uber is giving taxi services across the globe a run for their money – and has met with fierce regulatory resistance in Germany, France and other E.U. countries. Now, the European Commissioner for Transport, Violeta Bulc, is examining whether to liberalize taxi and chauffeur services market across the European Union.

Uber offers rides from regular drivers in unmarked cars to users based on a smartphone application. Its business model is different as opposition in Germany, and cases brought by taxi lobbies, forced Uber to work only with licensed taxi cabs.

Germany’s latest restriction came last month when a Frankfurt court had banned the UberPop ride-sharing service for not complying with industry requirements such as drivers who hold special licenses.

German Minister of Transport Alexander Dobrindt sees no reason to ease the strict regulation of taxi services in the country; no changes to the law are planned, according to a statement from his ministry.

“Uber and similar companies meet the expectations of at least a part of the population in terms of quality, price and availability.”

Violeta Bulc, E.U. commissioner for transport

But countries in the European Union have to respect the principles of E.U. law, which include “the freedom to offer services,” Ms. Bulc wrote to the chairman of the transport committee in the E.U. Parliament, Michael Cramer of the German Green Party.

In Ms. Bulc’s letter, which WirtschaftsWoche has obtained, she announced her intention to investigate the taxi and chauffeur service market and E.U. officials are already preparing the analysis.

Ms. Bulc’s review “will provide the necessary background for the commission to decide on the need for – and possible character of – any further action at E.U. level,” she wrote.

She added that, “the regulation and market situation differs from one member state to another and even from one city to another.”

Her statements put more pressure on national governments to take action.

Taxi Services vs UberPop-01

 

The E.U. Commission, as the executive arm of the European Union, can enact legislation which, if accepted, would be binding Europe-wide.

In her letter, Ms. Bulc showed support for Uber, the app which is run from San Francisco. “We have to acknowledge that the services provided by Uber and similar companies meet the expectations of at least a part of the population in terms of quality, price and availability,” she wrote.

Her letter described Uber as a start-up that offers “innovative and interesting transport services.” She added, “We also see it as part of the rapidly developing sharing economy, which potentially could make Europe more resource-efficient.”

In late February, Uber had filed a complaint against Germany to the E.U. Commission. Ms. Bulc’s division is also looking into complaints Uber has brought against France and Spain.

In its submission, Uber complained that German courts classify the start-up as a transportation company. The U.S. firm sees itself as a service provider that connects clients and third parties offering chauffeur services.

 


Video: Commissioner Hearings: MEPs question Violeta Bulc.

 

This article originally appeared in German weekly business magazine WirtschaftsWoche. To contact the authors: thomas.stoelzel@wiwo.de; silke.wettach@wiwo.de

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