Uber, the on-demand ride sharing platform, is reportedly retrenching its operations in Germany. According to the reports, the company will be pulling out of three cities including Frankfurt, Hamburg and Dusseldorf, leaving active operations in Berlin and Munich.
Uber's decision to pull out came after a Frankfurt regional court release a ban in March on the company using unlicensed drivers. According to Tech Crunch, the court ruled that each violation would be subject to a €250,000 ($270,000) fine. The legal battle was steered by Taxi Deutschland, a German taxi operator group who targeted the lower cost UberPop service.
While Uber initially said that it would continue its operations in the cities by offering its limousine service and licensed taxi drivers, the company has now decided to retrench after realizing that it can't run a reliable service because it can't get enough drivers.
"For many prospective Uber partners the process of registering an independent rental car enterprise has proved as too costly and time-consuming," Uber said in a statement on Friday, as per Reuters.
A Taxi Deutschland spokeswoman, on the other hand, claimed Uber had in fact only managed to sign up "around 10" drivers in Frankfurt while there are 4,000 in the city. She also emphasized that the company's business model in Germany makes it an unattractive option for licensed radio taxi drivers as Uber takes a 20 percent fee from drivers.
"Uber is way more expensive, they've got hardly any customers and they only operate with their app. And this is why [Uber's business model] couldn't work," Taxi Deutschland spokeswoman said, noting that there are some 255,000 licensed taxi drivers in the nation. "So the regulations can't be too complicated! Well-regulated markets with consumer protection are very difficult for Uber to conquer. Any society which has consumer protection in place will be an extremely difficult market for Uber."
Meanwhile, Uber's move isn't particularly surprising for Germans who decided nine months ago that Uber drivers need to obtain the same licensing as commercial taxi drivers in order to transport passengers to and from their destinations, Digital Trends noted. While Uber will still carry on their operations in Berlin and Munich, the latest withdrawal appears to mark a turning point in the longstanding battle between German lawmakers and the much controversial company.
"Plenty of people in Germany want to press a button on their phone and get a safe, affordable ride with Uber," Uber Germany general manager Christian Freese said, as per The Verge. "Yet we've found the requirements, even for licensed services, to be very complex. Uber is increasingly popular in Munich and Berlin so we have decided to focus our efforts there."
For now, Uber has vowed to "intensify the dialogue" with legislators in hopes of making a stronger comeback. Freese added that the company remained committed to expanding its services in Germany, and will continue to talk with politicians and regulators. However, Germany is not only the concern of the company as it seeks rapid growth and expansion. In fact, Uber has seen major pushback through protests, arrests, and full-out bans in European countries such as France, Italy, and Spain.
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