Uber Banned in Germany

[Wraith]

In what may be the severest crackdown on taxi app service Uber seen so far, Germany has banned the San Francisco-based company from operating throughout the country after a temporary injunction was issued by the Frankfurt regional court.

Uber will be subjected fines of up to €250,000 (£198,000) if it defies the ban. The injunction was imposed after the German taxi lobby challenged the company for non-compliance with existing transport regulations.

Chairman of Taxi Deutschland said in a statement:

The Passenger Transport Act regulates the protection of drivers and consumers. That can't easily be overturned no matter how neoliberal the company.

Uber operates with billions in cash from Goldman Sachs and Google, wraps itself in a Startup-Look and sells itself as a New Economy saviour.

Because the court's ruling is a temporary injunction, Uber will have the opportunity to fight the ban in a follow-up hearing.

An Uber spokesman responded today's developments: "Germany is one of the fastest growing markets for Uber in Europe. We will continue to operate in Germany and will appeal the recent lawsuit filed by Taxi Deutschland in Frankfurt. We believe innovation and competition is good for everyone, riders and drivers, everyone wins. You cannot put the brakes on progress. Uber will continue its operations and will offer Uberpop ridesharing services via its app throughout Germany.​"

Compared to the Frankfurt court, Transport for London (TfL) appears to be a model of laissez-faire. TfL has not taken any substantive action against Uber and back in July said as far as it was concerned the company was acting within the law.

The London Taxi Drivers Association had argued Uber was in breach of regulations governing taximeters, which can only be used by black cabs.

Tfl saw things very differently and issued a statement on 3 July saying: "In relation to the way Uber operates in London, TfL is satisfied that based upon our understanding of the relationship between the passenger and Uber London, and between Uber London and Uber UV, registered in Holland, that it is operating under the terms of the 1998 PHV(L) Act".

Uber has faced hostility from regulators and the established taxi industry across Europe. In France, this took the form of the notorious "15-minute" law. After a strong lobbying effort by Paris taxi unions, Uber drivers are now required to wait 15 minutes after customers place a booking to pick them up.

In April, a Belgium court ruling found Uber's operations illegal, and threatened heavy fines should the service continue to operate. With this level of opposition, it is little wonder that Uber felt it necessary bring in political heavyweight and former Obama strategist David Plouffe to smooth Uber's relationship with regulators and politicians.

However, Europe's political class are by no means united in their hostility to the US company The EU commissioner for the digital agenda and well-known Uber fan, Neelie Kroes, told Twitter her opinion of the Frankfurt court's ruling:

Source

The article is mostly focusing on Europe's anti-Uber efforts, but there's been plenty of that in the US too. Taxi lobbies around the world just don't like the idea that they might need to compete. The French law is extra ridiculous, though I suppose that's pretty standard for how the consumer is "protected" over there - by forcing all companies to have a minimum amount of shittiness.

Alternate Source, explains a couple things the other source didn't.

edit: Ooh, can we call them Big Taxi? That's the thing to do, isn't it? I'm calling the collective lobbies Big Taxi from now on.

[RandBlade]

Most important issue is insurance for me: Business class insurance for hire must be in place not just standard social, domestic and pleasure insurance. But it is in place, Uber provides it to their drivers. So the insurance issue is moot.

[Aimless]

Have they un-suspended the 15-minute law in France?

http://techcrunch.com/2014/02/05/cou...ers-in-france/

[Flixy]

Most important issue is insurance for me: Business class insurance for hire must be in place not just standard social, domestic and pleasure insurance. But it is in place, Uber provides it to their drivers. So the insurance issue is moot.

Err, I'm pretty sure they don't provide insurance here, and insurance for commercial people transport doesn't come cheap.

I have nothing against Uber, but I do agree with taxi drivers here that unlicensed, uninsured drivers with cars that are less safe are unfair competition. Uber has a drivers that do have taxi licenses etc as well, I'm fine with that, but the unlicensed drivers should be fined (as they are here).

I'm not saying the taxi license procedure shouldn't be modernised here, Btw, but simply starting to ignore laws is a stupid approach if you ask me.
And as proven by the fact they offer it themselves, there's no reason why you can't use Uber within the existing regulations. I can't really speak for other countries though.

[Aimless]

I suspect Uber makes it very difficult to realise a profit on the prohibitively expensive taxi licenses. Holders of new licenses may be able to lower their leasing fees, but those who're already out a couple of hundred thousand euros will be fucked, esp. if they're Small Taxi rather than Big Taxi.

[RandBlade]

Err, I'm pretty sure they don't provide insurance here, and insurance for commercial people transport doesn't come cheap.

Story I read on the BBC said that Uber pays for the insurance.

If they're driving uninsured then they should be arrested.

[Khendraja'aro]

They don't provide insurance. Because that's one of the major cost points for regular Taxi services.

One driver already lost his insurance contract, by the way.

Not to mention that they'll get problems with our labour laws. If drivers are making driving for Uber a full-time job then our courts will classify them as being regular employees instead of being self-employed (because that is one of the ways companies tried to get around having to provide coverage and such - the simply stated that the people working for them were "self-employed").

[Flixy]

Well every driver needs insurance here, but that usually doesn't cover commercial people transport. And if they do that, they're already acting illegally anyway if they don't have a license or a car that has been approved for it. Of course it's probably different in every country but over here they offered to pay the fines, but didn't mention providing insurance or accepting liability.

[Khendraja'aro]

The articles leave out one important detail, by the way: The up to 250,000€ fine is for each instance of a violation of the injunction. The first violation usually only incurs a small fine (say: 2,000€) but it will ramp up fast for each subsequent one.

[Dreadnaught]

I was gonna post this in the German Internet Lunacy thread.

Not to mention that they'll get problems with our labour laws. If drivers are making driving for Uber a full-time job then our courts will classify them as being regular employees instead of being self-employed (because that is one of the ways companies tried to get around having to provide coverage and such - the simply stated that the people working for them were "self-employed").

That sounds a bit weird. Sort of like saying if you are a freelancer, you are also an employee of whatever listing service gets you jobs?

[Flixy]

That sounds a bit weird. Sort of like saying if you are a freelancer, you are also an employee of whatever listing service gets you jobs?

I don't know German laws, but over here..

If you are a freelancer but work for the same client for a longer time, the tax agency will often classify it as being 'disguised employment' (not sure what the proper English term) and charge for the withheld taxes that would have been paid if you were actually employed, plus a fine. It's not quite as simple as that because it all depends not just on how much clients you have, whether you get paid per hour or per job, and a bunch of other criteria. A pretty big one is whether you have "entrepreneurial risk", which as a taxi driver you certainly do since you get paid per job, so it would be okay to be a freelance taxi driver for a company without being classed as a regular employee, here, especially if it's your own car. A lot of truckers are self employed and only drive for one client, too.

Same with a listing company, when it doubles as a temp agency you would be an employee, if you run your own enterprise, you wouldn't. A mediator/listing company does count as a single employer, no matter how many different clients you end up working for. Whether you are running an enterprise or not is up to the tax agency, like I said they have a number of criteria. You can get approval in advance, so the company hiring you doesn't have any risk.

[Khendraja'aro]

A pretty big one is whether you have "entrepreneurial risk", which as a taxi driver you certainly do since you get paid per job, so it would be okay to be a freelance taxi driver for a company without being classed as a regular employee, here, especially if it's your own car. A lot of truckers are self employed and only drive for one client, too.

There's one snag to that: If this one client is the only one you can easily get orders from, then you're de facto an employee; i.e. you have to be able to switch employers in order to be a real freelancer.

This is not the case with Uber: If you're driving for Uber you can't easily switch to a regular taxi company.

The "entrepeneurial risk" does not wash, by the way: Our courts have ruled time and again that shifting the risk to your employees by labelling them as freelancers is NOT allowed.

[Flixy]

Like I said, I just know the Dutch situation.

[Lewkowski]

Capitalism is always scary to socialists. God forbid the government allow consumers to vote which service they want to use with their wallets.

[Veldan Rath]

Again, it's more complicated than that Lewk. I love the idea of Uber, but there are some minimum standards they should adhere to.

Don't get me wrong, some of the barriers here in the US are put there to protect the taxi cab companies more than the consumer.

[Ominous Gamer]

In Tampa we are now jailing Uber and Lyft drivers, and the taxi commission is buying billboards in a smear campaign against ride sharing.

So fucking stupid.

[Khendraja'aro]

Ride sharing is not a problem.

If you're working for a taxi service you need the following:
a) an additional driver's license in order to be allowed to transport passengers (anyone can attain that one)
b) business insurance (again, anyone can get that)
c) a car which is serviced yearly instead of once every two years.

That's about it. I don't see where this is unreasonable in any way.

And just to make it clear: If you're driving a taxi without this business driver's insurance (i.e. you just have the regular one) and you're causing an accident, your insurance company will still pay the victim. But then they'll drop your contract and demand their money back from you.

[Lewkowski]

In Tampa we are now jailing Uber and Lyft drivers, and the taxi commission is buying billboards in a smear campaign against ride sharing.

So fucking stupid.

One of the few things I think you've posted I agree with.

[wiggin]

I think most of you are missing the point. Uber and other P2P-style car services can easily provide just as safe and well-regulated of a service without compromising their profit margins significantly, or changing the objections that traditional taxi services have to the model.

The reason goes back to the way that taxi services have been set up (at least in the US; I can't speak to the rest of the world). In most US cities, taxis operate as a government-organized cartel. Supply is intentionally limited and prices are intentionally fixed higher than market rates, and both are tightly controlled by governments. The basic logic is thus: taxis promise to follow a strict set of rules - notably, they can't reject unprofitable rides to/from poorly-traveled places, can't negotiate rates, etc. In exchange, they're guaranteed higher margins on profitable routes and limited supply. It results in substandard service for most consumers (longer waits during demand surges, higher prices, rigged markets), but protects those consumers who might not otherwise be served (or would be gouged by very high prices). Supply is capped by things like limiting total numbers (cf. the ridiculous cost of medallions in NYC), imposing unnecessary regulatory hurdles (unnecessary and expensive licensing requirements, stupid things like having to memorize the London street system in a world with GPS), etc.

Uber et al upend this basic tradeoff. There's no requirement for a P2P service to take all comers; furthermore, they can and do jack up rates for routes that would have been unprofitable (or when demand is high), something cabs can't do. So what you get is people taking profitable routes shift their demand to the cheaper P2P service, but everyone else (on unprofitable routes) sticks with cabs because they're cheaper and required to take the fare. Cabbies lose their custom, particularly their highest-margin custom. It's a classic problem that has been studied in great detail in its many different variations around the world. Other solutions have always existed (car services, etc.) but Uber et al makes it so much easier that it drives prices down and better matches supply to demand for most customers.


This is why cabbies around the world are crying foul. It's a reasonable complaint, and I don't think a regulatory framework has been built up to adequately address the 'public good' provided by taxi rules while minimizing the market distortion. My instincts are to feel little sympathy for an uncompetitive cartel like taxi cabs, and I like the use of technology to provide a faster, better, cheaper service (and often far friendlier, too!). Yet I think it's important to recognize that they are disrupting the traditional government-instituted model... and that model did have a worthwhile goal. Maybe it's best to scrap the model entirely and deregulate taxis - competition would certainly drive down prices in frequently traveled areas, but it would jack up prices during periods of high demand and limit service/dramatically increase costs for less traveled routes. Perhaps intervening in the market was a fool's errand to start with. Yet we can't just ignore the problem and suggest that cabs will have to cope, with their burdensome and restrictive regulation, while Uber and the like take all of their profitable custom. Something's gotta give.

[Flixy]

Good post, though the situation is slightly different here. I can of course only speak for the Netherlands

Over here, taxi services are regulated, but not really in a government-organized cartel. As far as I know there's no limit on the number of taxi licenses (for 15 years or so now), plus they are for the whole country, not just one city. The reasons for most regulations now are more safety and quality, which is especially important for places like Amsterdam, because of all the tourism. Basically a taxi needs an official, calibrated meter, so you can't be ripped off, there's a maximum tariff (that has to be in a highly visible place), drivers get a background check (on things like drunk driving, violent offenses, etc.), the cars are checked more often, it's properly insured, etc. And the taxi meter also checks the driver's driving hours, so you won't have a driver who hasn't rested in ages and might fall asleep behind the wheel (like truckers), and there's a central complaints board.

Now a service like Uber could, in principle, follow these rules easily, and in fact did so. They started here by rolling out two services for licensed taxi drivers, that could be ordered on the app, but had a price roughly the same as normal taxis while being somewhat more luxurious. Taxi drivers made slightly less money per ride (Uber charges relatively much), but made up for it with more rides. But then Uber started dropping prices, and self-employed drivers could make more money while working for themselves than by making marginally profitable rides for Uber, so they lost a lot of the drivers. So now they try to take the unregulated/illegal route.

I think this does show that if you include the costs for maintaining a car, license, insurance, etc., suddenly cheap services like Uber aren't that profitable anymore. The problem is, their new unlicensed drivers are not properly insured, don't have the right license, and they don't have an (expensive) taxi meter to ensure you can't be overcharged. That way they can offer rides cheaper, but only by breaking the rules taxi drivers do have to follow (and are heavily enforced against them). Which is, if you ask me, a good reason to cry foul as well - the only reason your competition is doing better is because they aren't playing by the same rules as you are.

Now, there is something to be said for deregulating the taxi system altogether, but at the same time those regulations exist for a reason - periods without it are still referred to as the wild west. There is a reason there has to be an officially calibrated taxi meter, and that taxi drivers got background checks. Of course, with apps like Uber which actually allow reviews, that would be less necessary, then again, there's still taxis on the streets as well and not everyone has that app. And making sure a car has proper insurance and that the driver has rested enough are regulations I don't see going away soon, and I'm not unhappy about that.

BTW, it's no coincidence Uber just started breaking the rules here, the taxi regulations are up for renewal IIRC so they are probably hoping to get some traction while breaking the rules, so the public supports them.

[Khendraja'aro]

Indeed. The injuction was based on the fact that the Uber cars don't follow the regulations pertaining safety and insurance.

[Ominous Gamer]

they can't reject unprofitable rides to/from poorly-traveled places, can't negotiate rates,

This is hardly, if ever, enforced. The system around here is that corrupt. It might be because of tourism in general, theme parks, or the cruise ships; but this sentence right here is why Uber and Lyft were so welcomed in my area by the general public.

[LittleFuzzy]

This is hardly, if ever, enforced. The system around here is that corrupt. It might be because of tourism in general, theme parks, or the cruise ships; but this sentence right here is why Uber and Lyft were so welcomed in my area by the general public.

It's not been my experience either. The only public good I'm aware of wrt taxis is a legitimate municipal interest in controlling congestion which regularly fails to be upheld in the face of regulatory capture.

[Dreadnaught]

There's one snag to that: If this one client is the only one you can easily get orders from, then you're de facto an employee; i.e. you have to be able to switch employers in order to be a real freelancer.

This is not the case with Uber: If you're driving for Uber you can't easily switch to a regular taxi company.

Is that because Uber is prohibiting them? Three weeks ago I was talking to a "regular" taxi driver who says he sometimes uses Uber when he does night shifts, particularly on weeknights. Basically he just goes back-and-forth.

[Flixy]

This is hardly, if ever, enforced. The system around here is that corrupt. It might be because of tourism in general, theme parks, or the cruise ships; but this sentence right here is why Uber and Lyft were so welcomed in my area by the general public.

I think that's also supposed to be true here, but I'm pretty sure over here that particular piece isn't always enforced either.

[Khendraja'aro]

Is that because Uber is prohibiting them? Three weeks ago I was talking to a "regular" taxi driver who says he sometimes uses Uber when he does night shifts, particularly on weeknights. Basically he just goes back-and-forth.

No. It's because the "normal" Uber drivers (read: the ones not working for a taxi company) don't have the insurance and the maintenance cycles. Your taxi driver would be the odd-man out, not the common case.

[Ominous Gamer]

Curious what maintenance cycles we are referring to. My 8 year old Saturn alerts me when I've gone to long between service (max being a year). and one of the positives of uber and lyft around here is that their cars are in a hell of a lot better shape than the actual taxis.

[earthJoker]

Never seen a taxi in bad shape over here.

[Ominous Gamer]

ours are nasty, generally retired police interceptors. although the bus system has been deploying those new nissan vans that new york had a bloody fit over. First lyft car I saw was a Benz in downtown tampa.

[Dreadnaught]

No. It's because the "normal" Uber drivers (read: the ones not working for a taxi company) don't have the insurance and the maintenance cycles. Your taxi driver would be the odd-man out, not the common case.

The maintenance cycle thing seems a bit weird. If the car isn't maintained, no taxi driver is going to make money on a broken-down car.

Also, Uber competitors (EG Lyft) would surely start appearing in Germany if, you know, the German government didn't shut them down.