Germany bans taxi app Uber

“Despite having the most German-sounding name possible,” said Kevin Roose on Nymag.com, Uber has been banned in Germany.

Taxi Deutschland, the industry association, took Uber to court for non-compliance with German transport law. It says Uber’s drivers operate without the necessary permits.

Uber plans to keep operating while it appeals, even though it faces fines of up to €250,000 per trip.

The service allows customers to order and pay for a car with a private driver via a smartphone app. Uber has expanded to 3,200 cities since its inception in 2009, and has been banned in several of them.

What the commentators said

On the one hand, said Tim Fernholz on Qz.com, taxi regulations are there to protect passengers – think background checks and liability insurance. But there are also “rules designed to protect industry incumbents and create an artificially low supply of cabs”. These drive up fares and worsen service.

In Germany’s case, “there is too much legal cover for those protecting vested interests”, said the FT. Taxi apps aren’t the only internet services that promote consumer’s interests and have the potential to give the economy a big boost.

Germany needs to be “more open to this sort of innovation if it is to shake up its sleepy services sector”, which in turn is crucial to bolstering long-term growth. There is just too much red tape.

The regulation of professional services is stricter in Germany than in all but five of the 27 states monitored by the OECD think tank. According to the World Bank, Germany ranks 11th out of 189 economies for the ease of starting a business – worse than Iran, Russia and Senegal.

The likely upshot, concluded Kevin Roose, is that Uber will manage to rally customers to its side and the taxi lobby “will be made to look corrupt and protectionist”.

The courts will find a “halfway measure” that allows Uber drivers to operate if they get the proper licences. But with the German public less instinctively sympathetic to “brash…upstarts” than Americans, “the battle may be more protracted”.

Merryn

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