Despite raising a war chest of some $8 billion thus far, on-demand ride sharing platform Uber is retrenching its operations in Germany—pulling out of three cities (Frankfurt, Hamburg and Düsseldorf), leaving active operations in just Berlin and Munich.
The move follows a Frankfurt regional court ban on Uber using unlicensed drivers, issued back in March, according to Tech Crunch.
The court ruled that each violation of the ban would be subject to a €250,000 ($270,000) fine. The legal challenge was driven by German taxi operator group Taxi Deutschland targeting the lower cost UberPop service.
At the time, Uber had said it would continue operations in the cities, offering its limousine service and licensed taxi drivers, but has now decided it’s not able to run a reliable service with only those fallback options 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 picked up by Reuters on Friday.
Writing in an email sent to Uber driver in Hamburg, the company notes it has found the “local conditions difficult to build a reliable switching platform for car rental companies”, saying it has been unable to guarantee both high demand for its service and enough drivers to supply passengers wanting to use Uber in the city.
It goes on to say it has decided to “pause Uber in Hamburg temporarily”, as of November 9, adding that is working “with politicians and local authorities” to try to find a long-term solution for its business in Germany.
Although it is continuing to operate in Berlin, the UberPop service has also been banned there—with a Berlin court upholding a ban on the service back in April on passenger safety grounds. So in Berlin, Uber runs a service that uses regular licensed taxis to fulfill rides hailed via its app.
In a statement provided to TechCrunch, Uber’s Christian Freese, GM for Germany, added: “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 and suspend our operations in Frankfurt, Düsseldorf and Hamburg.
“We know this will be disappointing for riders and our partner drivers in those three cities, so we are looking at how we can support them. Uber remains committed to expanding its services in Germany, and will therefore continue its engagement and dialogue with politicians and regulators.”
The UberPop service has also been banned in multiple other locations in Europe, including France, Belgium, Italy, Spain and the Netherlands.
An equivalent service operating inside Iran has also faced stiff competition from established networks, including the Tehran Taxi Association.
