In another legal blow, Uber will not be allowed to operate its business in Germany. On Thursday, a regional court in Frankfurt banned the ride-hailing service provider to operate in Germany as it found multiple competition violations.
The German court has asked Uber not to send ride-hailing requests to rental car companies through its apps. The recent ban increases Uber's troubles and comes weeks after it was The Transport of London last month declined Uber's request for a new London license.
Uber faces a new legal challenge
The German court said that Uber lacks necessary license to offer its customers in Germany transport services using rental cars. Uber follows a different business model in Germany. The company's ride-hailing business works with professional private-hire vehicles. These vehicles and their drivers need to have licenses and permits to transport passenger.
Uner sends ride-hailing requests via its app to these requests to these rental car companies. So, Uber effectively will not be allowed to do so now. The company either has to change it business model in that country or come up with an alternate solution. Moreover, the court also said that Uber's service in that country, which allowed customers to avail ride in cars owned by rental companies, failed to comply with the competition rules.
Crisis deepens for Uber
The ban is effective immediately but Uber can appeal the court's judgment. This is not the first time that the company has invited trouble in Germany. Back in 2015, Uber was pulled up by the court for not complying competition rules.
"We will assess the court's ruling and determine next steps to ensure our services in Germany continue," an Uber spokesperson said in a statement. However, it is unclear if Uber will for the time being halt it services in Germany till it makes changes to come into compliance. The ruling effective immediately but Uber can appeal against the verdict.
In November, Transport of London declined the ride-hailing service provider's request for a new London license citing reasons of multiple breaches that put riders and their safety at risk. Uber, in a last attempt to regain its license in London, filed an appeal at Westminster Magistrates' Court last week. However, the appeal can now potentially make it a lengthy legal process for the ride-hailing company to start operations in one of its most important markets.