Uber pushes expansion despite legal pitfalls

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Tom Barfield - [email protected]
Uber pushes expansion despite legal pitfalls
Uber is going head-to-head with taxi services across Germany. Photo: DPA

Chauffeur car service Uber plans to expand into more German cities and double its activity in the country by the end of the year in the face of bitter opposition and a court case.


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Fabien Nestmann, Uber General Manager for Germany, told The Local that the number of people using Uber to order transport has multiplied fivefold since the beginning of the year.

“We've seen the number of people downloading the app and the number of those going on to become active users quintuple,” he said.

The Uber team also receives many emails from people hoping that they will soon offer their services in their town, Nestmann said.

The company currently operates in Berlin, Munich, Frankfurt (Main), Hamburg and Düsseldorf. Some of the cities with the greatest demand – Cologne, Stuttgart, Nürnberg, Bonn, Essen, Dortmund and Potsdam – will be next.

Uber registrations have been opened to potential users in those towns, with Cologne and Stuttgart likely the first targets.

Nestmann said that he aims to double the number of people taking rides with Uber's drivers in Germany between now and the end of 2014.

But one challenge will be finding enough drivers to meet the demand from potential passengers.

“It's true that in Munich or Berlin, sometimes there are few cars available on the app,” he admitted. “That's something we're definitely working hard on at the moment.”

But he added that since opening up Uber Pop, which allows anyone to register as an Uber driver, they had received thousands of applications.

Berlin ban?

However, Uber continues to face difficulties of a graver kind in Berlin. It is fighting a court case against the city Senate, which banned the service in response to widespread anger and accusations of unfair competition from taxi drivers.

A similar ban was overturned in Hamburg on Wednesday, with a court saying that the wrong city agency issued it. However, the judge did not pronounce on whether the Uber service itself is illegal.

Thousands of drivers across Germany joined strikes in June in protest against Uber's encroachment onto what has up until now been their turf.

Taxis take part in a demonstration against Uber at Berlins Olympic stadium. Photo: DPA

SEE ALSO: 'It can't go on like this': Taxi drivers in Uber protest

“We have to pay for all the costs and our licenses. They pay for nothing except their cars and petrol,” a Berlin taxi driver told The Local in June.

The company can continue to operate while the lawyers battle it out, but the potential remains for a total ban on its activity.

“I'd be lying if I looked around today and said that everyone is excited about Uber. There are, it's true, critical voices as well,” Nestmann said.

All on board?

At issue is exactly what kind of service Uber offers to drivers and clients in the eyes of the law.

Uber says that it offers a platform to facilitate 'ride-sharing' between private individuals, while its opponents say that it's offering a taxi service in all but name.

If the latter is true, the company would need to conduct more extensive checks on its drivers, for example regular health checks and verify their local knowledge.

Taxi drivers are also required to have an additional driving license, a clearly displayed registration number, and equipment such as a visible, illuminated fare meter in their vehicle, as well as more comprehensive insurance than a private driver.

Uber currently insures all its drivers for up to €3.5 million, but critics say this isn't enough to cover the potential damages from a serious car accident.

“We understand that we have more to do,” said Nestmann of the insurance question. “It’s something that's on our mind and which is really at the heart of the business.”

More stringent regulatory requirements could also wipe out the price advantage of around 20 percent which Uber currently enjoys over traditional taxis.

But Nestmann insisted that the company remains open to dialogue with its critics.

“What we want to do in the first place is inform them... that's how we can pre-empt many criticisms,” he said.

“When we started, the focus was on launching in Germany and getting the app started, and if we then realize that we need to do some public relations work then so much the better.”

Law change?

However much dialogue the company engages in with local authorities and competitors, the fact remains that it will likely fall foul of the laws regulating passenger transport sooner or later, according to lawyer Adolf Rebler writing in the Legal Tribune.

“The laws we're talking about are federal laws,” Nestmann says. “That's why we need to have a dialogue at the federal level... to show that we're creating a long-term framework which can serve everybody's interests.”

“Laws are written, laws are often renewed, and that's what we're thinking about right now.”

But referring to the Berlin ban on Uber Richard Leipold, head of the Berlin Taxi Association told The Local: "Parliament makes the laws, not a company from a foreign country."

"It's only a question of time before Munich, Frankfurt and Düsseldorf do the same [as Berlin]. I'm quite sure that Uber will lose. Uber Pop is absolutely against the law."












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