LONDON - A court in Frankfurt has banned U.S.-based popular online chauffeur service Uber from operating in Germany until a hearing this year on whether it unfairly competes with local taxis.
In its ruling, the Frankfurt Regional Court said the company could no longer offer its phone apps to connect drivers with passengers and said that Uber's network of drivers lacked the necessary commercial licenses to pick up passengers.
Uber, which allows people to use their smartphones to book rides with freelance drivers, said it would continue operating in Germany and would appeal the court's decision.
But Uber could face fines in Germany of up to 250,000 euros, or about $330,000, or its local employees could be jailed for up to six months if the company violates the temporary injunction, which was made last week but became public only on Tuesday.
The court in Frankfurt found that Uber posed unfair competition to the local taxi industry. It noted that Uber failed to have the necessary licenses and insurance for some drivers and that it could be selective in providing rides, while taxi drivers are required by law to accept anyone needing a ride.
"Our main concern is that, while competition is healthy, everyone has to be playing by the same rules," said Arne Hasse, spokesman for the Frankfurt state court.
Uber in a statement noted that Germany was one of its fastest-growing markets in Europe and said, "You cannot put the brakes on progress."
"We believe innovation and competition is good for everyone riders and drivers, everyone wins," the company said.
Other German taxi groups, which have fought Uber's rise in cities like Berlin and Hamburg, supported the recent ruling, adding that the start-up should operate by the same rules that apply to other German taxi companies.
"We welcome fair competition and a level playing field for all market participants," said Hermann Waldner, chief executive of the rival European taxi app taxi.eu, in a statement.
"The taxi industry is now more in demand than ever before, and this judgment is a step in the right direction", said NYT.
This summer, more than 10,000 taxi drivers in cities including Madrid and London took to the streets to complain about Uber, which they said did not comply with local rules regulating the industry.
Taxi drivers and customers in several United States cities have also criticized the company's tactics. Uber has been accused of trying to poach drivers from rival services like Lyft, and some of Uber's drivers have been arrested for illegal activities.
Uber says it is increasing competition in taxi markets, particularly in Europe, that have a history of limited competition and high prices, said NYT