A judge in Milan has shut the door on Uber’s ride-sharing business in Italy, dealing a major blow to the bn (£26.6bn) US company’s ambitions in Europe.
Tuesday’s ruling that Uber’s Pop service creates “unfair competition” effectively holds the private company to the same standard as a public taxi service.
UberPop, similar to UberX in the UK, allows users of the Uber smartphone app to order a ride from a driver without a commercial licence. By contrast Italian taxi drivers are highly regulated with severe limits on availability of taxi licences.
That fact, the court ruled, made UberPop illegal, just like any other taxi company operating without a licence. Uber has argued that it is essentially a technology company and differs from a traditional taxi service because it limits its availability to users of its app, and does not pick passengers up off the street.
UberBlack, which uses drivers with professional licences who have been vetted by the company, will continue to be available in Milan and Rome.
The news further complicated Uber’s plans to expand in Europe, where Uber’s chief executive, Travis Kalanick, said earlier this year that he would create 50,000 new jobs by forging “new partnerships” in major European cities.
Since then, Uber has faced more road blocks than green lights. It is the subject of a criminal investigation in the Netherlands and an injunction against it in Geneva. Its peer-to-peer unlicensed services in Germany, France and Spain have also been banned.
The company is also facing trouble closer to home. US authorities are examining why some British users of its taxi-booking app were allegedly charged for rides they did not book or make. Uber said it had seen no evidence of a security breach.
Compared to its legal woes in other European cities, Uber had been operating in Italy without the restrictions that it has faced elsewhere. But the company now has weeks to cease operating its Pop service or risk heavy fines.
“We are obviously very disappointed by today’s decision on UberPop, a decision that we respect but that we do not understand,” said Zac de Kievit, the legal director of Uber Europe, adding that he was most concerned about drivers who were suddenly facing unemployment.
De Kievit said Uber would appeal against the decision and pointed out that the European commission had said that member states ought to ensure “fairness, proportionality, and no discrimination” in the regulation of new technologies.
Carlo Alberto Carnevale Maffè, a business professor at the Bocconi school of management in Milan, where Uber is based, said the judge’s ruling was “embarrassing” and “entirely ideological”.
“It is a very bad sign of the limitation of innovation [in Italy],” he said. “This is the first case that I know of where a single judge – one person – can decide to stop a service at a national level on the basis of an [unsubstantiated] economic and theoretical argument.”
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