May 18, 2017 / 8:41 AM / 3 years ago

German case on Uber sedan service referred to European court

KARLSRUHE, Germany (Reuters) - Germany’s highest court on Thursday ruled that Uber’s Black service had violated the country’s competition laws, but referred the case to the European Court of Justice to decide whether its view was in line with broader European Union laws.

FILE PHOTO: A man exits the Uber offices in Queens, New York, U.S., February 2, 2017. REUTERS/Brendan McDermid/File Photo

It wants clarification from the higher European court before issuing a final ruling.

Uber, which allows passengers to summon a ride through an app on their smartphones, expanded into Europe five years ago but has been challenged in the courts because it is not bound by the same strict licensing and safety rules as some competitors.

The Uber Black service provides professional drivers in luxury sedans. The usual Uber service offering standard cars driven by freelance drivers was already suspended in Germany in 2015 after court challenges.

The Berlin government had already issued an administrative decision against Uber’s service staffed by professional drivers in 2014. A Berlin taxi firm brought the case at Germany’s Federal Court of Justice.

An Uber spokeswoman said the case would not affect Uber because it had already changed how it operates. Uber Black still operates in Munich but is now organized differently.

“The case therefore doesn’t affect our current product but is about a way of working that we have applied in the past,” the spokeswoman said.

Last week, Uber was confronted with the biggest challenge yet in Europe, after the European Court of Justice was advised to rule that the U.S. ride-hailing firm is actually a transport service, not an app.

On Thursday, the German court ruled that Uber Black had infringed German competition law because it assigned rides to drivers and rental car companies from its European headquarters in Amsterdam. Under German law, ride requests have to be made through sedan companies rather than to drivers directly.

Judge Wolfgang Buescher argued that Uber is not just an intermediary in this business but involved in financial management, organization and marketing.

A ruling by the European Court of Justice is expected to take at least a year before the German court takes a final decision.

Reporting by Ursula Knapp; Writing by Emma Thomasson and Michael Nienaber; Editing by Larry King and Pritha Sarkar

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