By Eric Auchard FRANKFURT (Reuters) - A regional German court has issued a temporary injunction against Uber, the U.S.-based online chauffeur service, saying its drivers lacked necessary commercial permits, potentially barring the company from operating in cities across Germany.
San Francisco-based Uber, which allows users to summon taxi-like services on their smartphones, has faced regulatory battles and court injunctions from its early days, even as it has expanded rapidly into roughly 150 cities around the world. In its ruling, the Frankfurt Regional Court said the company could no longer offer its Uber and UberPop phone apps to connect drivers with passengers, stating that Uber's network of drivers lacked the necessary commercial licenses to pick up passengers. German law only allows drivers to pick up passengers without a commercial license if the driver charges no more than the operating cost of the trip. Because Uber stands to take a cut of any charges, the court held it liable and issued an injunction against the service.
Legal experts said the ruling applies nationwide unless Uber appeals and subsequent decisions limit the scope of the ban. An Uber spokesman said the company was working on a response but had no immediate comment. Founded in 2009 and valued at $18.2 billion after its latest funding round in June, Uber Technologies contends that it is an electronic marketplace that connects drives with customers, not a transportation service itself.
Drivers must carry a valid driving license, have necessary local permits and undergo background checks before they pick up passengers, it says. The suit was brought by Taxi Deutschland, a Frankfurt-based consortium of taxi companies operating in major cities across Germany. Taxi Deutschland offers its own taxi-hire apps for smartphones.
The ruling drew praise from other industry groups including Taxi.eu which said it put Uber drivers on a "level playing with the 150,000 drivers it counts in its pan-European network.
Even in its home city of San Francisco, Uber has had to overcome legal and regulatory hurdles from city authorities concerned its services sidestep rules governing commercial transport and by taxi companies hoping to keep competition out.
Taxi drivers across Europe caused chaos in June by protesting against the service but it has continued to grow in popularity. Uber last week said that it was experiencing "huge demand" for its services in German cities including Berlin, Frankfurt and Hamburg and that it planned to expand into Cologne and Stuttgart by the end of this year. In the last four months of this year, Uber had expected to double the number of subscribed users in Germany, after growing fivefold so far in 2014, the company said.
(Additional reporting by Christoph Steitz in Frankfurt and Jan Schwartz in Hamburg; editing by Susan Thomas)