Uber and Its Executives Are Fined in France

http://www.nytimes.com/2016/06/10/technology/uber-and-its-executives-fined-in-france.html

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As part of the continuing global backlash over the popular ride-sharing service, Uber and two of its senior European executives were convicted and fined nearly $500,000 in France on Thursday for running an illegal transportation business.

In its push to expand around the world, Uber, the fast-growing start-up that is now worth $62.5 billion, has become a target in many of the 300 cities where it operates. Traditional taxi drivers in France and other European countries have fought to restrict the company, saying that Uber does not comply with local rules and, in some cities, may represent a threat to public safety. The company denies these accusations.

The latest ruling in France — the result of a lengthy legal process that dates to early last year — relates to UberPop, the company’s low-cost service, in which drivers do not have professional livery licenses. After a series of strikes by the taxi unions and the banning of UberPop in France, Uber eventually suspended its low-cost service in the country last summer.

As part of the French judge’s ruling on Thursday, Uber will have to pay a fine of $906,000, though half of that figure was suspended. Pierre-Dimitri Gore-Coty, the company’s head of Europe, the Middle East and Africa, and Thibaud Simphal, Uber’s general manager in France, must pay an additional combined penalty of $28,500.

The two executives were convicted of deceptive commercial practices and complicity in operating an illegal transportation service. They were cleared of some related charges linked to privacy complaints.

“The judgment does not impact our service in France today — which now connects more than 12,000 professional drivers with 1.5 million passengers — but we will appeal,” Gareth Mead, an Uber spokesman, said in a statement on Thursday.

Despite the French court’s penalties, the fines were significantly less than what the judge could have imposed. Uber could have been forced to pay up to $1.7 million, and its executives could have faced up to five years in prison and a $340,000 fine each. French taxi unions had also called for the Uber executives to be barred from working in the transportation industry, pleas that were ignored by the French court.

In the wake of Uber’s regulatory troubles in France and elsewhere in Europe, the company has increasingly turned its attention toward new markets, particularly in the Middle East and Asia.

This month, the company said it had raised $3.5 billion from Saudi Arabia’s Public Investment Fund. It is also expanding aggressively in China, although it continues to face cutthroat competition: Didi Chuxing, a local rival, last month raised $1 billion from the American tech giant Apple to bolster its own ride-booking smartphone application.