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France Says It Will Ban Uber’s Low-Cost Service in New Year France Says It Will Ban Uber’s Low-Cost Service in New Year
(about 2 hours later)
PARIS — When you call up Uber, the popular ride-booking service, through its smartphone application, various levels of rides show up, from budget commuter cars to premium black sedans. PARIS — The problems facing Uber, the popular ride-booking service, are going from bad to worse.
It is the lower-cost service, called UberPop in Europe, that is increasingly in the cross hairs of regulators and taxi drivers from London to Madrid. On Monday, the French government announced that the company’s lower-priced UberPop service would be banned on Jan. 1, the latest in a number of setbacks for Uber, which is facing bans in several cities worldwide.
Only days after Uber dodged a potential ban in Paris, the French government on Monday indicated that the company’s low-cost service could now be outlawed nationwide as of Jan. 1. France’s announcement has again put the spotlight on Uber, an American company that has been attracting criticism across the globe that it does not comply with local licensing laws. It also follows steps by policy makers in Amsterdam, Delhi and elsewhere to ban its services.
The potential ban — Uber says that it will challenge any legal ruling to block its services — has put the spotlight on UberPop, which has been attracting criticism across Europe and elsewhere that Uber does not comply with local licensing laws. It also follows steps by policy makers from Amsterdam to Delhi to ban the ride-booking company as not complying with local laws. Uber says that it will challenge any legal ruling —including the potential ban across France — that would block it.
The low-cost service, which allows any approved driver with a car and a proprietary Uber device to pick up passengers, is similar to the UberX product offered in the United States. Neither service requires drivers to have specific licenses demanded of traditional taxi drivers. France’s move came only days after Uber dodged a potential ban of UberPop in Paris. Parisian taxi associations had filed a lawsuit against Uber, saying that the company should not be permitted to operate in the city where the one-time fee for a taxi license costs up to $300,000.
But critics contend that the service represents unfair competition for other taxi operators, and falls afoul of many licensing rules across Europe. That has led cities across Europe, including Brussels and Berlin, to outlaw the budget car service. A local judge on Friday decided not to ban UberPop, prompting cabdrivers in the capital to stage a go-slow strike on Monday in protest of the company, which is valued at $40 billion, or almost the same as General Motors.
“Currently, those who use UberPop are not protected in case of an accident,” Pierre-Henry Brandet, the French Interior Ministry spokesman, told the French news channel BFM TV, on Monday. “So not only is it illegal to offer the service, but for the consumer, it’s a real danger.” In the latest legal twist for Uber, Pierre-Henry Brandet, the French Interior Ministry spokesman, said Monday that new legislation called the Thévenoud Law — which requires all drivers who chauffeur paying passengers to have a license and appropriate insurance — would form the basis of the ban. UberPop does not meet the licensing requirement.
Uber does not break out revenue figures for its different services, though in France — one of the company’s largest markets — roughly 40 percent, or 200,000 people, use the low-cost option — where fares can run more than a third below standard taxi rates The low-cost service is used by roughly 40 percent, or 200,000 people, of Uber’s customers in France, and its fares can run more than a third below standard taxi rates. UberPop is similar to UberX in the United States, with neither service requiring drivers to have the licenses required of traditional taxi driver. Any approved driver with a car and a proprietary Uber device can pick up passengers.
The company says that its low-cost service has proved popular with users throughout Europe, and that existing taxi associations are fighting hard to outlaw it because they do not want the competition in an industry whose rules have not changed for decades. Critics contend that the service represents unfair competition for other taxi operators, and falls afoul of many licensing rules across Europe. That has led cities across Europe, including Brussels and Berlin, to outlaw the budget car service.
“Currently, those who use UberPop are not protected in case of an accident,” Mr. Brandet told the French news channel BFM TV, on Monday. “So not only is it illegal to offer the service, but for the consumer, it’s a real danger.”
Customers who call up Uber through its smartphone application find various levels of rides, from budget commuter cars to premium black sedans. The company says that its low-cost service has proved popular throughout Europe, and that existing taxi associations are fighting to outlaw it because they do not want the competition in an industry whose rules have not changed for decades.
“Consumers are adopting UberPop very quickly,” said Pierre-Dimitri Gore-Coty, Uber’s regional general manager for Western Europe, adding that in cities like Brussels, the low-cost service is the only product that the company offers. “Traditional taxi drivers have always had a lot of power. Every time governments have tried to modernize the industry, it has proved problematic.”“Consumers are adopting UberPop very quickly,” said Pierre-Dimitri Gore-Coty, Uber’s regional general manager for Western Europe, adding that in cities like Brussels, the low-cost service is the only product that the company offers. “Traditional taxi drivers have always had a lot of power. Every time governments have tried to modernize the industry, it has proved problematic.”
Uber’s other ride-booking services, including those involving traditional taxis and luxury sedans that require chauffeur licenses, charge more than UberPop. Rivals, including Lyft, which is currently available only in the United States, also offer low-cost ride-booking services, though global regulatory attention has so far primarily focused on Uber’s activities. Uber’s other ride-booking services, including those involving traditional taxis and luxury sedans that require chauffeur licenses, charge more than UberPop. Rivals, including Lyft, which is available only in the United States, also offer low-cost ride-booking services, though global regulatory attention has so far focused on Uber.
Uber is facing a string of global problems, not just in Europe. In India, one of the company’s black sedan drivers was accused of raping a passenger. And in Australia, Uber began raising its rates on Monday just as the police surrounded a cafe in Sydney where an armed man was holding hostages. The move, which Uber calls surge pricing, is governed by an algorithm and kicks in when demand for rides in an area spikes. Many people who were stranded in the area were asked to pay roughly four times the normal rate, according to complaints on social media, though Uber quickly capped how much drivers could charge passengers. In India, one of the company’s black sedan drivers was accused of raping a passenger. And in Australia, Uber began raising its rates on Monday just as the police surrounded a cafe in Sydney where an armed man was holding hostages. The move, which Uber calls surge pricing, is governed by an algorithm and kicks in when demand for rides in an area spikes. Many people who were stranded in the area were asked to pay roughly four times the normal rate, according to complaints on social media, though Uber quickly capped how much drivers could charge passengers.
The legality of Uber’s low-cost service lies at the heart of the most recent dispute in France. Parisian taxi associations staged a go-slow strike on Monday in protest of the American company, which is valued at $40 billion. While a Paris judge ruled last week that UberPop could continue operating, Mr. Brandet, the Interior Ministry spokesman, noted that a French criminal court in October had fined the company $124,000 for deceptive marketing, saying that Uber was operating a taxi service, rather than a ride-sharing program. Uber is allowed to continue operating as it appeals that decision.
While a Paris judge ruled last week that Uber’s budget service could continue operating here, Mr. Brandet, the Interior Ministry spokesman, noted that a French criminal court in October had fined the company $124,000 for deceptive marketing, saying that Uber was operating a taxi service, rather than a ride-sharing program. Uber is being allowed to continue operating as it appeals that decision.
The October decision “is exactly in line” with the government’s thinking, Mr. Brandet said, which calls for “better regulating the profession to avoid unfair competition.” Those who operate such services, he said, could face two years in prison and fines of up to $370,000.The October decision “is exactly in line” with the government’s thinking, Mr. Brandet said, which calls for “better regulating the profession to avoid unfair competition.” Those who operate such services, he said, could face two years in prison and fines of up to $370,000.
To adapt to the challenge posed by Uber and similar services, the French government passed new legislation called the Thévenoud Law. It would require all drivers who chauffeur paying passengers — including Uber drivers — to have a license, obtainable after 250 hours of training, and to have appropriate insurance. UberPop does not currently meet the licensing requirement, which has led to officials’ and opponents’ accusations of illegal operation. To adapt to the challenge posed by Uber and similar services, the French government passed the Thévenoud Law require that all drivers who chauffeur paying passengers have a license, obtainable after 250 hours of training, and appropriate insurance.
But Roméo Pestana, president of the French Taxi Association, said it was not clear whether the Thévenoud Law could be used successfully to outlaw Uber, since it left open some room for the service to claim that its rights of entrepreneurship were being harmed. Roméo Pestana, president of the French Taxi Association, said it was not clear whether the law could be used successfully to outlaw Uber because it left room for the service to claim that its rights of entrepreneurship were being harmed.
Nor, with just two weeks left in the year, have crucial elements of the law been settled. That fact figured in the legal decision on Friday, in which the Paris court, though partly siding with Uber’s opponents, said it could not apply legal remedies against Uber for that reason. It also said any challenges should be heard by a criminal court. And with just two weeks left in the year, crucial elements of the law remain to be settled. That fact figured in the legal decision on Friday, in which the Paris court, though partly siding with Uber’s opponents, said it could not apply legal remedies against Uber. It also said any challenges should be heard by a criminal court.
Uber has sought to play down safety concerns about its low-cost service. Uber has sought to play down safety concerns about its low-cost service. On its French driver recruiting website, it assures applicants that they do not need any insurance beyond what is standard for their vehicles. All UberPop trips are covered by commercial liability insurance with a $5 million per accident maximum, it says, which covers any damage or injuries caused by the driver.
On its French driver recruiting website, it assures applicants that they do not need any insurance beyond what is standard for their vehicles. All UberPop trips are covered by commercial liability insurance with a $5 million per accident maximum, it says, which covers any damage or injuries caused by the driver.
“Of course, we take seriously any comments from French officials,” said Mr. Gore-Coty of Uber, who added that UberPop would still be available in France after Jan. 1. “But this law is extremely fragile. It’s being challenged all over the place.”“Of course, we take seriously any comments from French officials,” said Mr. Gore-Coty of Uber, who added that UberPop would still be available in France after Jan. 1. “But this law is extremely fragile. It’s being challenged all over the place.”
And while some in France have called for the outright banning of Uber’s services, other lawmakers have thrown their support behind the company and the wider so-called sharing economy, which allows people to rent out spare rooms or earn extra cash by chauffeuring others around town.And while some in France have called for the outright banning of Uber’s services, other lawmakers have thrown their support behind the company and the wider so-called sharing economy, which allows people to rent out spare rooms or earn extra cash by chauffeuring others around town.
Talking at a tech conference in Paris last week, Emmanuel Macron, the French economy minister, sided with Uber, saying that the company should not be banned in Paris. Talking at a technology conference in Paris last week, Emmanuel Macron, the French economy minister, sided with Uber, saying that the company should not be banned in Paris.
“You have to be disruptive,” he added.“You have to be disruptive,” he added.