UberPop hits legal potholes in Europe

Ride-sharing service banned in Germany and declared illegal in France, Italy and Spain

PARIS • Uber Technologies 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 in those places.

A French court fined Uber €800,000 (S$1.2 million) on Thursday for running an illegal taxi service with non-professional drivers and slapped smaller fines on two of its executives in the first such criminal case in Europe.

The UberPop service connected clients via a smartphone app with non-professional drivers who used their own cars.

It was the first time executives from the world's most valuable venture capital-backed start-up had gone on trial, although the company has become embroiled in many legal battles as it has expanded to 60 countries since its founding in 2009.

In Frankfurt, a court upheld Germany's ban on UberPop on Thursday, rejecting the company's appeal against a ruling by a lower court which set stiff fines for any violations of local transport laws.

UberPop has also been declared illegal by courts in Italy and Spain, while appeals are pending in Belgium and the Netherlands.

The company's problems in Europe have led it to shift its focus to its main service staffed by professional drivers in black sedans, which has grown rapidly in France, Uber's second-biggest market in Europe just behind Britain.

"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; Mr Thibaud Simphal, head of its French operations, €20,000; and Mr Pierre-Dimitri Gore-Coty, the firm's general manager for Europe, the Middle East and Africa, €30,000, saying they incited others to break the law by working for the service, leading to riots and taxi strikes in the French capital. In each case, half of the fine was suspended.

The court did not follow the prosecutor's recommendation that the managers be banned from running a company in France. They had faced a possible maximum sentence of five years in jail and a €1.5 million fine.

A Paris spokesman said that while Uber would appeal against the French ruling, it would not impact its services in the country.

The company can appeal against 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 (EC) has just published guidelines that support such services."

The EC published guidelines earlier this month on how countries in the region should apply laws to the collaborative economy in areas such as tax, consumers, employment, and who should be held liable when there are problems.

Among the recommendations, the commission said absolute bans on an activity should be a measure only of last resort.

In a bid to appeal to regulators in Europe, Uber co-founder Travis Kalanick met lawmakers in Brussels last month to discuss the firm's role in helping cities fix problems such as in traffic and parking.

Meanwhile, former drivers of Uber and rival Lyft on Thursday filed lawsuits in a federal district court in San Francisco alleging that the ride- hailing firms broke a federal law by abruptly halting operations in the city after voters backed a measure requiring the firms to fingerprint drivers. The lawsuits said Uber and Lyft violated a law that requires companies to give 60 days' notice to employees before a "mass layoff".

The companies consider drivers to be independent contractors.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on June 11, 2016, with the headline 'UberPop hits legal potholes in Europe'. Print Edition | Subscribe