Bloomberg News

Uber Faces Berlin’s Wrath as Car-Sharing App Flouts Ban

August 14, 2014

Uber Technologies Inc., the ride-hailing application that’s rankling taxi drivers from Boston to Tokyo, defied a ban in Berlin, risking a 25,000-euro ($33,000) fine every time it transports a customer in Germany’s capital.

Berlin’s senate yesterday prohibited the smartphone app, arguing that passengers who use the service aren’t insured in case of accident. Uber will challenge the ban “as soon as possible,” Fabien Nestmann, a company spokesman, said by phone.

“The service is continuing,” said Nestmann in an interview today. “We’re disappointed and think this prohibition order is the wrong approach.”

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Governments and regulators in cities around the world are restricting Uber’s business on the grounds it poses safety risks and unfairly competes with licensed taxi services. Cabbies with licenses that can cost 200,000 euros apiece have staged protests in European cities including London, Madrid, Paris and Berlin.

“Protecting passengers is the priority,” Berlin authorities said in an e-mailed statement. “The basic idea of protecting the taxi business has also been applied.”

Investors including Goldman Sachs Group Inc. (GS:US) and Google Ventures are pouring cash into the burgeoning market for apps that let users order taxis and cars or share rides using their smartphones. Uber, which is active in more than 40 countries, raised $1.2 billion in funding in June, giving it a value of $17 billion.

Extra Insurance

Uber’s Pop service is safe and the company has taken out additional insurance that covers everyone in case of an accident, Nestmann said. “We’re standing behind our platform and our drivers,” he said.

Uber, which operates in Berlin, Hamburg, Frankfurt, Munich and Dusseldorf, plans to start servicing Cologne and Stuttgart, Nestmann said.

About 7,800 licensed taxis operate in Berlin, according to the Taxi Verband Berlin Brandenburg e.V. lobby group.

Hamburg traffic authorities told Uber last month to stop operating in the port city, saying that transporting people without a license is against the law. Hamburg suspended the enforcement after the city’s administrative court asked for more time to look into the case, allowing Uber to run the app there for the time being. Uber continues to operate in the northern German city, Nestmann said.

The Hamburg court is reviewing written arguments from both sides on whether the ban must remain suspended while Uber fights it, tribunal spokesman Andreas Lambiris said in an interview today. He expects the court to issue a ruling in the case, handled under emergency proceedings, in September.

“We’re happy that we have started these discussions,” Nestmann said. “We believe that apps like Uber’s will be part of the mobility of the future.”

To contact the reporters on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net; Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Angela Cullen, Chad Thomas


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