Uber über alles

Uber can steer round German roadblock

Uber is in yet another jam. A Frankfurt court has forbidden the online chauffeur service from organising ride-shares in Germany. The firm will keep on anyway, which may at first smack of Silicon Valley arrogance. But the rules are outdated and Uber is sticking up for consumers. The tech upstart will probably prevail.

The San Francisco-based firm has angered traditional taxi drivers and authorities from Paris to Seoul. Now its cheaper "UberPOP" service has fallen foul of German law, which says unlicensed motorists can pick up passengers but can't turn a profit. Uber plans to keep on selling while it contests the ruling, despite potential fines of 250,000 euros per offending journey.

Uber is, of course, acting out of self-interest. The firm, which recently raised funds at an $18.2 billion valuation, says Germany is one of its fastest-growing markets. There's an element of culture clash too: West Coast entrepreneurs versus the country where pedestrians stop at red lights on empty roads late at night.

But Uber's opposition is also logical. Germany's current framework dates back more than 50 years. Back then, public transport was stretched and few households could afford cars. Protecting cab drivers by limiting competition made sense.

Times have changed, though. Today's cities are clogged. By matching cars and passengers, smartphone apps like UberPOP can help mitigate congestion. Extra competition would benefit consumers by driving down prices. And satellite navigation systems have made the seasoned taxi driver's local knowledge less valuable.

There's a precedent, too. Way back in the pre-internet era, Germany's constitutional court ruled in favour of commercial ride-sharing centres which organise long-haul trips. The same principle would apply to Uber's case now. The company, of course, wants to disrupt lucrative local markets across the world. So it's unlikely that this German obstacle will be the last one the company hits.