Out-Law News | 02 Sep 2014 | 2:27 pm | 1 min. read
Uber, which enables users of its UberPop online application to book a car ride from a network of individual drivers not affiliated with official taxi companies, failed to obtain necessary permits for its drivers, a district court in Frankfurt ruled.
The court said Uber breached Germany's Passenger Transport Act and ordered it to stop operating, however Uber has said it will continue to operate pending its appeal against the judgment, the BBC reported.
"We will continue to operate in Germany and will appeal the recent lawsuit filed by Taxi Deutschland in Frankfurt," an Uber spokesperson said, according to the BBC's report. "You cannot put the brakes on progress. Uber will continue its operations and will offer UberPop ridesharing services via its app throughout Germany."
Taxi Deutschland, which operates a rival taxi-booking application, has referred to Uber as a "locust". It has claimed that Uber can pay less tax than official taxi companies because of its operating model and that the company offers less consumer protection than the taxi companies do because of the fact Uber's drivers have not had to obtain permits.
In a statement, Dieter Schlenker, chairman of Taxi Deutschland, questioned whether "an internet rating" could replace "replace a proper examination by authorities" and said "Uber accepts the fact that the passenger gets nothing in an accident," according to an automated translation of his statement.
On its website Uber confirmed that its drivers are "independent contractors" and that it conducts "a rigorous screening process to verify that every driver is insured and legally qualified to drive". It said it seeks customer feedback on every ride and takes the feedback "very seriously when evaluating our driver partnerships".
A spokesman for the Frankfurt court told technology news website Techcrunch that the court had found Uber's app to be in breach of "German unfair competition law"
"In Germany, commercial passenger transport is only allowed with a permission by the local authorities which the Uber drivers don’t have," the spokesperson said. "A hearing will only take place if Uber applies for it." He said the ban on Uber is effective immediately but that the company can apply for the ban to be suspended.