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07/08/2015

Uber launches UberX service in Germany as Europe cools on restrictions, Its drivers, whom Uber Berlin general manager and Uber Germany spokesman Fabien Nestmann says have “been through the struggles,”

Uber launches UberX service in Germany as Europe cools on restrictions

Uber

Uber has launched its UberX platform in Germany, as the company persists with what has become one of its most difficult markets. From today, UberX is available in Frankfurt, Hamburg, Düsseldorf and Munich, with the service set to roll out in capital city Berlin in a few weeks.

To counter previous blocks by authorities, all drivers on the UberX platform have a concession from the Passenger Transport Act; are registered as private hire cars; and are covered by a commercial transport insurer. Mediated UberX partners are self-employed, and have several vehicles and drivers on their books. Under the new platform Uber acts solely as the provider of the technology and brand name.

It will, the company says, be cheaper than rivaling car hire services in the city. However, the price will not be as low as Uber POP, the peer-to-peer service the company retained in Germany following its last round of legal sparring. Uber POP circumvented regulations by offering rides at the minimum operating cost, which left a sparse, yet visible, presence in the country.

Its drivers, whom Uber Berlin general manager and Uber Germany spokesman Fabien Nestmann says have “been through the struggles,” will be assisted in gaining the relevant paperwork to drive under UberX, while “it is fairly likely” that Uber POP will be discontinued.

As of January this year, Uber had 1,600 drivers in Germany, and 50,000 active users. Despite some experts suggesting the company may skip the country altogether, Nestmann told Red Herring that it remains a vital market.

“Germany is the important economy right now in Europe – that is clear,” he said. “Germany has 80 million people, so it’s the biggest country in Europe. What we’ve seen is that there is an interest in Uber in Germany: we’ve seen it from the client side, we’ve seen it from the driver side.”

In more good news for the Silicon Valley firm, Belgian capital Brussels u-turned on its opposition to Uber, drafting legislation for January 2016 that would turn its 700 drivers in the city into independent, tax-paying contractors. It reverses a ban last year that coincided with large-scale protests in London, Paris, Madrid and Berlin.

Red Herring reported on Uber’s difficulties in the latter last November, after the company’s drivers were deemed a safety hazard by local authorities, and banned. The ban was later lifted amid outrage from then-European Commissioner Neelie Kroes, who said: “Slamming the door in Uber’s face doesn’t solve anything.”

“Brussels is very encouraging and there are other examples,” said Nestmann. “At the end of the day, legislation in most countries right now is national regulation or local regulation. But certainly, any city in Europe that takes an approach of looking into the future, seeing what is possible, is acting as a lighthouse that we can take heart from.”

Nestmann added that Germany’s existing legislation has barely changed since the sixties, citing a number of laws the firm has been working with authorities to change.

“You have a return-to-garage clause for for-hire vehicles, where after every trip they must return to their place of business before being considered for another trip,” he said. “That, just ecologically, is absurd, and economically for those people it’s absurd…and in times of congestion it doesn’t make sense to mandate more traffic.

“Then there is the city knowledge drivers have to take which is very cumbersome,” added Nestmann. “Of course everybody wants to be driven by someone who knows the city very well, but in times of navigation systems…I think it’s time to either look for a very slimmed-down knowledge test, or to say that navigation systems can do the job. Then there is the fact that in German law there is no place for agents such as Uber.”

Oleg Kamberski, head of passenger transport and taxis at the International Road Transport Union (IRU), claimed that Uber is welcome on the continent “once they are playing by the rules.” But “because of their reputation I would doubt it.

“In the U.S. they started with Uber POP which was forbidden by the courts,” added Kamberski. “Then they stepped up to UberX with insurance, then they moved for approval. So we’ll see what happens.

“Even in the U.S. we have seen how drivers have come back to the taxi system,” he added. “Europe is a different ball game. The quality of service here is quite high. Take Germany: the general level of taxis is very high. And when you see what Uber is doing in competitive markets like the Netherlands, they are one among many.”

Uber has, since its 2009 inception, become one of Silicon Valley’s biggest businesses. It has raised $5.9 billion to date, with a further round to come, and is currently valued at $41 billion. It is now present in 290 cities worldwide, and claims to complete a million trips per day between its 160,000 drivers.

However it has faced stiff competition from European cities and governments, where taxi regulations are tight and services professionalized. For example to become a licensed London ‘black cab’ driver, one must complete ‘The Knowledge’, a gruelling four-year-plus committal of the city’s streets to memory. Last April thousands of black cabs choked London’s main streets, to protest a lack of protection from apps such as Uber.

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