Uber takes steps to protect its business after German court decision

Uber operates differently in Germany and Austria compared to the rest of the world. Rather than individual drivers, taxi companies organize and fulfill requests for rides, the company itself functions as an operator of a brokerage platform.

The problem for Uber is that the Frankfurt Regional Court has decided that Uber itself should be classified as a taxi company as it sets the prices on its platform before handing them over to specific providers. This revelation could prevent Uber from operating in Germany altogether and so the company has been forced to take action.

Get comprehensive access to global business, stock market and economic news, and trending topics like bitcoin and biotech. Born2Invest brings you the latest news from around the world and across the spectrum of the trusted global network.

Uber will operate with a single company per city

In order to get around this problem Uber will now only work with one taxi firm per city. This single company will now be responsible for setting prices for any journeys organized through Uber’s app. The move will ensure that Uber can continue to operate in Germany.

The company will also be forced to comply with the “obligation to return” regulation. In Germany a taxi must be returning to its base of operations before it is allowed to accept a new order. The court has ruled that Uber has not been sufficiently policing compliance with this rule.

Uber has therefore implemented a mechanism in its system to check whether drivers comply with the specification. In the event of violations, they are to be excluded from further mediation by Uber. “We have completely redesigned our mediation model to meet the requirements of the ruling of the Frankfurt Regional Court,” Uber’s head of Germany Christoph Weigler told the German Press Agency.

The company argues it is being unfairly targeted

These solutions were developed by Uber specifically for the German market, Weigler emphasized. “We are used to being in the spotlight, but it is surprising that we are apparently the only supplier from whom such a system design is required.”

Last Thursday, December 19, the Vereinigung Taxi Deutschland announced that it would quickly deposit the security deposit of $166,272 (€150,000) required to enforce the ruling it had reached. As a precautionary measure, Uber has now changed the mediation model. At the same time, the company is considering appealing against the ruling of the Regional Court.

__

(Featured image by Thought Catalog via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in DerStandard, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.