Uber Feels UberPop Hangover With French, German Legal Setbacks

  • Fined 850,000 euros in Paris, half of which is suspended
  • Frankfurt appeals court confirms UberPop ban in Germany

Uber Technologies Inc. is feeling the sting of European judges from Paris to Frankfurt over UberPop, suffering setbacks in France and Germany months after it took the ride-sharing option out of its app there.

On Thursday, a French criminal court fined the company and two of its executives a total of 850,000 euros ($960,000), half of which was suspended, and a German appeals court separately said it wouldn’t overturn a ban of UberPop in the country. French prosecutors had attacked Uber for fraudulent commercial practices and encouraging illegal activity through UberPop, as well as improper use of personal data.

“UberPop went on for months illegally, though the company and its executives knew very well what the applicable legal context was,” judge Cecile Louis-Loyant said in Paris. She fined Uber France 800,000 euros, the head of its French operations, Thibaud Simphal, 20,000 euros and Pierre-Dimitri Gore-Coty, the company’s general manager for Europe, the Middle East and Africa, another 30,000 euros, saying they incited others to break the law by working for the service, leading to riots and taxi strikes in the French capital.

UberPop, which allows anyone with a vehicle and driver’s license to offer a cab-like service, stopped in July in France and was banned in Germany in March 2015. Meanwhile Uber’s main chauffeured-car service, that requires registration with authorities, is still going.

Global Challenges

The car-hailing application started in San Francisco has faced regulatory challenges from its hometown and abroad in places including Munich, Stockholm and Mumbai. In a bid to appeal to regulators in Europe, founder Travis Kalanick met with lawmakers in Brussels last month to discuss Uber’s role in helping cities fix problems like traffic, parking and having too many cars on the roads.

Uber, which has its European hub in the Netherlands, can’t rely on EU freedoms to provide services among the bloc, because the drivers acted locally, presiding Judge Roland Vorbusch said at a hearing in the German case.

To read about Uber’s plans to work with carmakers, click here

“The appeals case is a formality" and the ruling won’t influence its German business, Uber said in a statement. "We’re only doing it because it raises fundamental questions if European basic liberties of technology companies.”

A Paris spokesman said while Uber would appeal the French ruling, it wouldn’t impact its services in the country. The company can appeal the German decision as well.

“We stopped UberPop last summer and we are still disappointed by this judgment,” a French spokesman for the company said in a text message. “The European Commission has just published guidelines that support such services.”

The European Commission published guidance earlier this month on how countries in the region should apply laws to the collaborative economy in areas such as tax, consumer, employment or who should be held liable when there are problems. Among recommendations, the Commission said absolute bans of an activity should only be a measure of last resort.

Regulation is only one part of Uber’s challenges as it expands globally. The company is also dueling with powerful local rivals -- such as Didi Chuxing in China -- and raised $3.5 billion from Saudi Arabia’s sovereign wealth fund this month to help fund its international growth.

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