Uber eyes aggressive expansion in Germany despite bans

FRANKFURT Wed Aug 27, 2014 2:49pm EDT

Transportation app Uber is seen on the iPhone of limousine driver Shuki Zanna, 49, in Beverly Hills, California, December 19, 2013. REUTERS/Lucy Nicholson

Transportation app Uber is seen on the iPhone of limousine driver Shuki Zanna, 49, in Beverly Hills, California, December 19, 2013.

Credit: Reuters/Lucy Nicholson

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FRANKFURT (Reuters) - U.S. car service Uber is planning an aggressive expansion in Germany despite a backlash from cities such as Berlin and Hamburg, which have questioned its right to operate in highly regulated markets dominated by traditional taxis.

The San Francisco-based company, which allows users to summon rides on their smartphones, announced late on Tuesday that it was experiencing "huge demand" for its services in German cities where it is not currently operating.

It plans to move into Cologne and Stuttgart later this year, and is also eyeing Nuremberg, Bonn, Essen, Dortmund and Potsdam. From now until the end of the year, it expects to double the number of subscribed users in Germany, after growing fivefold so far in 2014, the company said.

Currently, Uber operates in Berlin, Hamburg, Munich, Frankfurt and Duesseldorf. But it has run into trouble in the German capital and northern port city of Hamburg, which have banned the service over concerns that drivers lack licenses to carry passengers and do not have full insurance coverage.

However, the administrative court in Hamburg on Wednesday overturned the ban enforced by the Hamburg Ministry of Economic affairs, saying the ministry did not have jurisdiction and that a ban would contravene passenger transport regulations.

"We are delighted with today's ruling and more importantly pleased to continue offering Uber's great services to the people of Hamburg," a spokesman said in a statement.

Uber has also appealed the ruling in Berlin and continues to operate pending a final verdict.

Other German cities are also considering a ban, according to media reports.

Founded in 2009 and valued at $18.2 billion based on its latest funding round in June, Uber Technologies Inc describes itself as a marketplace that puts people in contact with each other, not a transportation service.

Drivers have to be over a certain age, have a valid driving license, and undergo background checks before they can pick up passengers.

Uber has faced regulatory obstacles in a number of European cities as well as legal challenges from taxi companies hoping to keep new competition out. Taxi drivers across Europe caused chaos in June by protesting against the service.

Earlier this month, a Paris court demanded that Uber change its invoicing system.

(Reporting by Ludwig Burger; Additional reporting by Victoria Bryan; Editing by Noah Barkin and David Evans)

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Comments (4)
mcgriff wrote:
This is a classic case of NIH.
As in- Not Invented Here.
I would wager that in a year or 2, the famous German internet clone company Rocket Internet, will be duplicating every facet of Uber’s business model, and marketing it everywhere that Uber is not located now, if they are not doing so already.
I feel this judgment by the Berlin authorities is anti-consumer, and protects vested interests at the expense of those who want more choice for their transportation needs.

Aug 27, 2014 10:43am EDT  --  Report as abuse
AlkalineState wrote:
This is like banning eBay so that Walmart can make more money. It is a temporary fix, it is inefficient, and smart consumers will always find ways around it.

Dumb move, Berlin.

Aug 27, 2014 11:58am EDT  --  Report as abuse
AlkalineState wrote:
“cannot tolerate, that passengers… are entrusted to unlicensed drivers or vehicles…”

So ban car pools too? Car pool drivers do not have a taxi license.

Aug 27, 2014 12:00pm EDT  --  Report as abuse
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