German court bans Uber's ride-hailing services in Germany
reuters.com
reuters.com
Here is some context on how things worked thus far: Since Uber is not allowed to dispatch directly to independent drivers (see the ruling from 2015), they instead partnered with rental-car companies that employ the drivers. So in theory, Uber would dispatch a ride to one of their partners, who then dispatches it to one of their drivers. In practice, however, everything worked just as you know it from other countries, with the only difference being that Uber would send an email to the business owner containing two links: one to accept the ride and one to decline. Whenever the business owner clicks accept, the driver would get a text message with the approval. But at this time, he already would have accepted the ride in the app and be on his way. So effectively, the business owners had zero control.
It is no surprise that the Taxi companies are mad, because they are unable to compete under the current set of rules. In addition, Uber has heavily subsidized rides with discounts of up to 50% for multiple weeks and generous hourly guarantees for their partners.
Apart from subsidies Uber might use, why aren't taxi companies able to compete? Is something stopping them from doing exactly what Uber is doing (Such as have good apps, pre payment etc.)? If that's the case, that they are bound from developing their own business by regulation - why is that?
In open market, taxi business in its current form would be dead long time ago. But not if you gave state-guaranteed monopoly on a service that many people simply need and have few other options.
Where I live, taxi drivers need to purchase medallion from given municipality, a massive investment. You can't just slap a taxi logo on the car and start driving people. From customers perspective this is a monopoly since they are all the same, charge all the same, have all the same drawbacks and most people hated them. From customer's perspective, they are indeed a 'taxi company'.
Uber was the first competition to entrenched taxi driving business.
it looks more like a franchise than competing businesses.
i don't think a business should be allowed to offer services below cost, nor should it be allowed to break the law, but on the other hand, the restrictions that exist in some places make no sense. a rental car has to return to the main office after each ride ??? what kind of nonsense is that?
What if the law mandates that some services can only be provided in a certain way? If a simple label swap could give a free pass then why stop at taxis? "I did not steal that money, I was just providing a free surprise disposal service. Would it help if I sent a bill?"
Germany actually considers Taxis part of public infrastructure, even if universally outsourced. The assumption that profitable routes subsidize less profitable is deeply embedded in the system. It's similar to how no amount of free market ideology should allow emergency rooms to cherry-pick.
I should imagine "not wanting to lose thousands/millions every month whilst they pay for people to develop software, etc." is a big factor. Life is a lot easier when you can throw money at problems like Uber, especially if you're (unfairly) subsidising your service to drive competitors into the ground.
(Caveat that I’m going entirely off your comment, with no background info): the middlemen businesses sound like small taxi companies, where the bookings come from Uber rather than directly from customers. Why can’t the taxi companies compete by building an app that provides the booking part?
Yes, why can't they ? Turns out building apps users will use is not a commodity that can be bought off the shelf.
They have. The ruling is completely arbitrary.
Uber pretended to not be part of the transaction, while they were a) the public face to the customer, b) offering the ride at a given price, c) negotiated with a specific driver to fulfill it (and only then got the middleman on board to sign off on the transaction).
As usual for Uber they went for the sketchiest way possible to deal with regulations, as if they're looking for ways to argue about them in court as often as possible.
Their problem: no court (except one) in Germany makes law because we don't have the Anglo-saxon concept of case law.
Their differentiators though were primarily the crazy amount of VC money they were willing to lose and the fact that they had absolutely no qualms about trampling about each and every law they could. To the point that they would break laws that they didn't even need to.
But asking for forgiveness when you have a ton of VC money is obviously better than not messing up in the first place.
Only good thing is thst, I hope, the market is seeing through these criminals (at best).
It's nice to see European bureaucracy at work and actually enforcing rules. Seems like it's much more resistant to regulatory capture than the US where, looks like, you can just flaunt any laws if you have enough money.
I don't necessarily agree with their arguments, but I also don't think Uber should get a "free ride".
https://apps.apple.com/de/app/free-now-mytaxi/id357852748?l=...
Cash? In Germany? Outrageous!
(When in Rome, do as the Romans do)
There are still a few people that use it exclusively, but they're getting rarer each year. You can pay with cash almost everywhere though, so I can understand how this believe keeps getting repeated
What do they do wrong?
Uber has the advantage of being ubiquitous among a certain class of travellers - this obviously is not an insurmountable advantage, but it does mean I naturally tend towards using Uber when travelling unless there's a particularly compelling local alternative.
Everything else about your taxi service sounds good, and I'd be more than happy to use them, I'm just lazy. (And from other comments, I see that there's taxi company apps like FreeNow which seem to be gaining regional market share?)
Once they become habituated to one app, they would be very sticky.
Which is funny because Uber's shtick is to complain about the evil taxi cartels, while statements like yours indicate that they're really the biggest of them all.
But the fact that they offer a fairly consistent experience certainly does help them.
By rolling with an approved and expensed option, which eliminates certain amount of ambiguity, does not imply that Uber is part of a cartel; irrespective of it's licensing woes and/or impending banishment from multiple lucrative markets. At present, it does not even enjoy a majority position to form an alliance, let alone collude with locally competitive operators.
Price is secondary to some extend.
For example, they can't make up their own prices (neither higher nor lower).
There are few taxi companies with more than 20 cars, and most seem to gravitate around 3 cars. Such a company doesn't build "its [own] app".
If your entire operation is controlled by the (county) government, it seems to make sense to ask that government for help. But they didn't even do that: Courts are independent.
They're mad because it ruins their monopoly. Taxis are ridiculously expensive in Germany, also known to use tricks to charge you extra. I would never consider ordering a taxi here.
Order a taxi during "peak hours": 5 EUR. Then they charge you with an "approaching fee". Basically, they make you pay for the distance they traveled on their way to pick you up.
So last time I took one, I jumped in and was already charged for 21 EUR before the ride even began. The ride itself just cost 10 EUR...
In North and South America, and in other European cities (though certainly not all!), my experience has been that Uber is 99% of the time
1. better UX, and 2. cheaper
than taxis, _generally_. In Berlin, taxi service is generally professional/clean/fine, but it's quite expensive, and when I travel to other places I get quickly spoiled by the Uber experience/cost. I understand why they ban it here, but from an end-user perspective, really wish they didn't.
I avoid it at any cost, even when they're free, for example when public transportation has issues they offer free taxis to the affected passengers. I always opt out for walking, renting a bike, if it's close, or paying for an uber if it's a longer distance, rather than driving for free with the taxi.
The only advantage taxis had over uber is that there's more of them, and during some larger events such as Oktoberfest uber was always fully booked.
The regulation needs to be relaxed so that uber, and others, can compete based on their service - not some other rules and weird laws like the one mentioned in the article "that hired cars have to return to a rental firm’s main office after carrying out a ride,"
Or, you know, Uber respecting regulation and adhere to it?
But that, of course, would completely kill their business model, which essentially is not really a cab service, but regulation arbitrage. At least until the law cracks down on them.
Sometimes breaking the law in the cause of good is justified. But Uber isn't doing civil disobedience, it's a greedy multinational that unilaterally decided to ignore the laws that stand between them and their profits. Such behavior has no place in a civilized society.
Now they can fuck off and I am very happy to hear this. Also hoping they lose their appeal in London and disappear for good. Their self-driving car efforts failing miserably and the VC money running out is just the icing on the cake.
They've been good at forcing the existing taxi/transport industry to modernise but now that they've done that it's time to say goodbye to their fraud & lack of ethics and open the doors to competitors who do much better on those fronts.
i think uber is by far the best thing to happen to transport and part-time work in decades. i've known so many drives all around the world working for uber 1-2 hours per day. even knew a guy that worked for them just 2 trips per day: his daily commute.
just the feeling of not being denied service because you're brown, or that you want to travel to a certain neighbourhood, is a vast, vast improvement over the incumbents.
of course the taxi drivers don't want to change their horrible service. they paid good money for a job that will hopefully be completely automated in the near future.
"They've been good at forcing the existing taxi/transport industry to modernise"
if by modernise you mean "hire more expensive lawyers to sue everyone", then you're right.
Being "employed" by a company that ignores laws and has zero support for their drivers ("partner" drivers as they call them) is the best thing?
> by modernise you mean "hire more expensive lawyers to sue everyone", then you're right.
A lot of local transport companies now have their own app that offers the same experience as Uber.
> if by modernise you mean "hire more expensive lawyers to sue everyone", then you're right.
10 years ago in Dublin, taxis would ignore you on the street, not show up when booked, charge an extra €2 for card payments( or tell your their machine wasn't working, take a detour via an atm and leave the meter running for all of it), overcharge on routes, just flat out not travel to certain areas because they're too far.
Since Uber came along, all of those companies now have their own apps (or are blanketed under whatever MyTaxi is called today), take full card payments, are reliable, and I've found the quality of drivers has improved vastly. I don't agree with Uber or how they behave, but they've certainly modernized the taco industry.
In my region (in Germany), up to 4 passengers: €2.50 base fee + €2.20/km. 36€/hr if you want them to wait for you. Larger car (6 passengers + lots of room for luggage) is 15€ extra.
Fixed price to the near-by airport, other destinations can be pre-calculated on request.
Those prices are valid all day and night, no matter if there's a concert/soccer game/whatever competing for the company's attention.
Seems pretty transparent to me: I know today what I'd pay for any given route in 2 months. Uber? Can be anything from ultra cheap to ultra expensive depending on the mood of their algorithm in the given moment.
A key part of why Uber failed in Germany is also that our taxi market is massively and properly regulated which means the selling points of Uber being a better taxi service simply were irrelevant here - our taxis come when you order them, the drivers are competent and will take you on the most efficient way possible to your destination and the pricing is consistent no matter if it's day or night, if it's high demand time thanks to e.g. a trade fair or not, or if you're drunk or sober. The only thing that sucks is that many do not take cards, but that's a cultural thing - Germans love their cash.
I think it has to do with generations. I see more and more stores (even bakeries, O.M.G.!) accepting cards without lower limits - and I live in a town with ~80.000 people.
Give it some more years, and it will work out.
In the UK I sometimes pay for a single Banana by card, 50p (0.6€).
When I do, I wonder if the highest carbon footprint was from the payment processing or the banana processing!
expensive, poor service where incumbents reign supreme. immigrants and the night economy workers are constantly being discriminated against.
the "german model" is an antiquated POS that already died out.
That might not fit their business model and the regular cab model might be bad but I'm not convinced that the Uber/pseudo ride share alternative is all roses either. It certainly can't be the solution to just replace badly behaving incumbents with some cheap startup that doesn't even employ their drivers.
> some cheap startup that doesn't even employ their drivers.
the world has changed decades ago. i think it's time for your laws to change as well.
overall your comment reminds me of this:
“When behavior runs into poor design, behavior always, and I mean always, wins.” —@asymco
It's gonna be real fun for Uber and the other "gig economy" exploiters if Warren or Sanders win.
The European approaches to worker protection aren't a thing the world has just moved on from because they want a more convenient and slightly cheaper cab service. My comment was meant to point out that these regulations don't just mean to stifle some radical new business model. I for one can live without yet another industry based on worker exploitation, we've got enough of those already. Or maybe, to encourage discussion rather than dismissing that view: what upside would the German society have from relaxing that legislation? That sector could use some deregulation, sure, but I don't see the point of replacing it with a player that wants none.
Maybe we could leave that to German society and politics instead of letting some money-drunken American jackass[0] run the show?
Which is exactly what the court is doing, so: mission accomplished.
[0] I mean Kalanick is gone, but that lack of ethics still seems to be very deeply embedded within that organization.
So if I don't agree with the laws in your country then you should change them too?
overall your comment reminds me of this:
“The problem with the race to the bottom is that you might win.” — Seth Godin
I'll be sticking with the private alternatives like Über, Sixt Ride, etc.
It's a common pattern, a lot of things are backward and lagging behind the times in Germany, and so many Germans are convinced it's better that way, but they still change, just 10 or more years later.
I'll update my opinion when international debit and credit cards are universally accepted rather than needing bank cards.
That's coming now that credit cards aren't fleecing merchants anymore: they just weren't competitive against bank cards (or, gasp!, cash) until ~10 years ago with their ~3% fees.
That dropped to ~1.5% 5 years ago due to EU regulations and is now limited to 0.3%, which is, surprise surprise, the fee we had for bank cards.
So it's not due to "backwards Germans", or due to the "free market", it's due to regulations that credit cards are now making inroads, because their operators were forced to make a competitive offer.
With an experience of two surveillance states on German soil in the 20th century (of which one ended just about 30 years ago), it is a very good idea to use a very privacy-conscious method of payment whenever possible. Currenly cash is arguably the best option for this.
Flexibility of working hours is a big thing. People like to be able to drop shifts and pick them up as and when they need. If they need more money in the run up to Christmas they can put more time in.
The other is that the firms aren’t exactly bastions of fairness either. I hear time and again that the operators give the jobs to their favourite staff, or as described; whoever is fucking the operator. The concept of working for a boss and having to deal with some fundamental injustice seems to ring true. For better or worse Uber is seen as ‘fair’ to the drivers, at least on the whole. The rules are at least laid out, keep your rating clean and we’ll give you jobs just like anyone else.
If true, people wouldn’t be complaining about surge pricing. People just want cheap, quality, fast service. They don’t care about fair.
The transparency provided by electronic records and payment of taxi rides does lead to better service though.
Consumers are the ones likely to complain about surge pricing.
Drivers are the ones who (in the example given) do want fairness from the dispatcher, which they sometimes don’t get with traditional taxi companies and human dispatchers, but presumably do from Uber’s algorithm.
They still find plenty of unfairness in Uber from the individual to Uber relationship, such as the fees for one, but there seems to be less injustice between fellow drivers compared to traditional firms.
But the drivers do, which is a source of complaints in places where taxi service is considered to be an extension of public transport. Uber-like companies (it's not just Uber, MyTaxi/FreeNow suffers from this as well) are notoriously unreliable if you live in or want to go to places further away from the city center or otherwise inconvenient for the drivers, or if your start or destination suggests you might be inconvenient to handle. For instance, I've had trouble getting a ride to a maternity hospital in the city center, and only got one after I switched the destination to a nearby beauty salon. I confirmed this when talking later with the drivers over other rides - they see the requests to/from hospitals, they just skip them.
In this way, an algorithm is fairer than dispatcher for the drivers, but the dispatcher is fairer for the passenger.
The algorithm is the dispatcher, and theoretically, would weed out drivers that discriminate after a certain number of incidents. I don’t see why a human dispatcher has less reason to discriminate than a driver. Presumably, discrimination is to maximum use revenue, which is in both the driver and dispatcher’s interest.
[1] https://www.cnet.com/news/court-strikes-down-uber-car-servic...
The new operation was to only dish the rides out to rental companies and using a bit of trickery to work around the previous ruling and some regulation, that has been killed off too now.
The question is whether it makes sense in Europe at scale, or whether it should be limited to the kind of low-density urban developments that are typical for the US.
That sounds pretty awesome, to be fair.
At least "taxi cartel" is a very popular phrase in Uber's PR.
Why do you need special permission from the State to let people buy someone's driver services through your site? It's just commerce. Pay taxes on it, sure, but call it being a pirate? Whose property rights are you pirating?
Let's look at an alternative end game: drivers start to market themselves to passengers directly, and keep all the money. Well how do they do that - obviously on the same place, it has to be centralized somehow, there has to be a place to look them up.
So there would be some cheap free alternative where drivers can sign up but keep all of the cash from each ride. All right, nobody's built that yet.
Since it costs just a few tens of hours of development time and hosting that is just a few dollars a month, suppose you build that.
Should you, TeMPOraL, be legally forbidden for making that free web site, yourself, literally coding up a place where where drivers can coordinate with passengers and keep all of their earnings?
Because, after all, by your standard this makes you a pirate.
Uber isn't a small underdog that bends some rules here and there. They're a large multinational backed by billions of dollars, whose modus operandi is blatant disregard of the law and antisocial behavior.
Personally, I do believe most of the intellectual property laws range from bad to wrong to batshit insane, but I don't start a company whose main business model is violating these laws, and using investor money to keep the enforcement at bay.
Now granted Uber is a business, there are certain minimum compliance things such as taxes. But I don't share your view that everyone needs to follow all rules no matter how technical.
In a sense it's clear that uber is "just an app".
But if you look at Uber's history, you get quite a different picture. They went into the ride share business knowing they'll be violating many major rules in most cities they try to operate, and then they just proceeded to violating those rules without attempting to find a better solution; instead, they continue to burn money to escape enforcement, and they've built special software whose explicit purpose is to help them hide from regulators.
Uber's approach to local regulations is entirely antagonistic, which is something I don't like. Adding to that all the other stories about their abusive behavior with respect to drivers, customers and journalists, it paints to me a picture of a very antisocial company - in the sense that they're willing to exploit and abuse anyone for profit, without paying any attention to laws. It's a much different thing than discussing an off law that's arguably unjust or out of touch with reality.
why are you basically OK with legal enforcement of the status quo to the point that you want a company to be unable to float its alternative model? I really don't get it.
It means operating without a proper license, in this case from the government. You may have heard pirate radio referred to as "stealing the airwaves", one could also say that pirate taxis are "stealing the public road space", both of which are public/shared property.
>Because, after all, by your standard this makes you a pirate.
It's not TeMPOraL's standard, it's the government's standard and the laws that matter and which make it a "pirate".
The problem with Uber is that they've entered this regulated space and unilaterally decided to ignore all those regulations. Sure, they don't get the special benefits, but they also don't share the burdens. Thus they easily outcompete the taxis on the profitable routes, leaving the regular taxi companies to work the unprofitable ones, which they usually are required by law to serve.
There are taxi companies, but people are free to get a taxi permit and be a taxi driver without a boss. These guys use Uber now, and it seems to be working good.
The rating of drivers and customers seems to be well received, especially from my conversations with drivers. Also you have history in the Uber app, so if something happens, you forgot something, you know which car and which driver, or the driver knows which customer. This is almost impossible in a regular taxi unless you take time to bother to write down the driver details and the taxi car number.
There is still some issues with drivers not getting appropriately compensated for trips, and there's been a lot of attention to drivers not getting the extra cut of the surge pricing, Uber takes it all. Obviously not fair, but in the bigger picture of things it is good.
And they, along with AirBnb, are certainly not part of the 'sharing economy'. In the same way that Couchsurfing is sharing economy while Airbnb is running an accommodation business, Blablacar is sharing economy/ride-sharing, Uber is a taxi booking company just like the thousands of minicab firms that already exist. I welcome innovation and Uber clearly has a useful product (though by no means unique), and if investors are happy to risk billions of dollars being spent in market entry that's fine, but your growth strategy can't be to trample over regulation.
If it's bad regulation, sure you can lobby to change it and then structure your business around that. But a level playing field in which all competing business operate is essential both to ensure businesses themselves comply and consumers know the levels of protection they can expect.
This ruling is rather incongruent with the recent Airbnb ruling (1) where Airbnb was ruled to be nothing more than an "information society service". (Rant: you could apply this label to anything from a public library to a sadistic secret service.)
Comparable to Uber, Airbnb makes money per transaction, yet claims it is no more than an information medium.
I used to operate several large classifieds sites in the Netherlands, and am rather certain that as soon as the platform starts collecting per-transaction fees, it becomes part of the transaction, as it is in fact a broker between two parties.
In my (consumer) view: Uber adds value and convenience to a city and threatens an inefficient and monopolistic status quo (at least here in the Netherlands), whereas Airbnb turns housing into business cases, for better of for worse (and in Amsterdam: for worse).
1: https://www.theguardian.com/technology/2019/dec/19/eu-court-...