Following Uber Plea, European Commission Investigates Germany’s Restrictions

Transportation company Uber is having a rough time in Europe. It faces many legal challenges in major European countries, including Germany. The company requested an investigation from the European Commission to see whether Germany’s restrictions on its services are legal and don’t violate the EU law, the Financial Times reports.

In Germany, Uber had a few problems with local governments. The service was banned in Berlin and Hamburg, and district court in Frankfurt later issued a temporary nationwide ban. But the court order was lifted a few weeks later.

While Uber isn’t banned in Germany, many parts of its services are hindered. In particular, Uber drivers can’t accept another ride before dropping off their passengers — this makes the service less attractive for drivers as they spend more time looking for clients and less time driving with a client in their car.

Uber also needs to hold a taxi operator’s license in Germany and comply with all the existing taxi laws. The company probably finds these rules too restrictive for its relatively new offering. That’s why it is trying to work the European Commission angle.

This is smart for a few reasons. First, the European Commission has been sympathetic to Uber in the past. Lobbying at the European level could be easier as some local governments are more averse to innovation than the European Commission.

Second, the European Commission has always been pro-competition and pro-free market — it has been a deregulation champion for many years. That’s why Uber and the European Commission should get along as Uber is creating more competition in the transportation industry.

Finally, if Uber’s lobbying effort succeeds, the company may kill two birds with one stone. Using Germany’s restrictions, Uber could get the European Commission to regulate the transportation and ride-sharing industry across Europe. The Commission is considering regulating this industry, and it would make local bans obsolete.

Now the challenge is that Uber doesn’t know how the Commission will regulate its activities. The company is hoping that it will protect its activities more than anything.

When Uber launched UberPOP in Europe, many professional drivers saw the new service as unfair competition. UberPOP was banned in Brussels, the Netherlands and France. Uber France leaders were recently taken into custody for running illegal taxi operations.

Following another ban in Spain, the European Court of Justice will declare whether Uber is a transportation company or a digital service. This decision is essential as the European Commission won’t be able to do much if the Court of Justice states that Uber is a transportation company. In this case, Uber will have to follow existing rules in all European countries.