French Court Delivers a Blow to Uber

French Court Delivers a Blow to Uber

On Friday, the highest administrative court of France approved two of the three main restrictions on chauffeured and private vehicle services like Uber, which were introduced last year. Complaints of unfair competition had been lodged by traditional cab drivers, which led to this decision. Uber is basically an online service that uses a smartphone app for helping passengers in linking with drivers. The service did claim a victory when it challenged the regulations by asking the court to allow it to charge passengers according to the miles or kilometers traveled rather than providing an asking price at the time of booking. The decision was in Uber’s favor.

However, UNT, a French taxi drivers’ organization, said that the illegality of Uber’s practices had been confirmed by the court and urged the government to shut down applications that don’t follow the rules. According to the constitutional council of France, drivers of private chauffeured vehicles must return to their parking lot or base where they wait for new fares. This means that they are banned from driving around in search of new fares. The council also supported restrictions on apps such as Uber that uses smartphones of clients to show them the availability of the nearest drivers.

Legal challenges are faced by Uber in various European countries where protests have been carried out by licensed taxi drivers. A spokesman of the San Francisco based company said that it was a requirement of their business model to charge customers according to kilometers and also added that there wouldn’t be much difference if a limitation on location apps was placed. Nevertheless, the UNT said that this ruling would bring an end about to the practice of roaming on the public highways in search of customers that had been implemented by Uber drivers.

A Paris appeals court had held back its ruling on whether to ban the separate UberPOP online service of the firm as it was waiting for the court’s decision. This service is a rather informal operation that links potential passengers with private drivers at lower rates as opposed to traditional cabs. Three competing car services namely Transdev Shuttle, GreenTomatoCars, LeCab and taxi unions brought the case before the appeals court. Two Silicon Valley entrepreneurs had created Uber when they had become frustrated at the difficulties associated with hailing a cab in Paris.

The service is now available in 270 cities and launched an application in 2010. In France, the government had aimed to eliminate, or at the very least, reduce the conflict between Uber and taxis by reworking the rules on how chauffeured cars and traditional taxis compete. There have been rumors that Uber will be going public because it is seeking a credit line worth $1 billion from banks. It is talking to a number of banks in order to obtain the loan and is in negotiations with around six to seven banks. The funding is not needed for the day-to-day operations either so it could be for the company’s IPO.

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