Uber Says It Will Continue Service in Germany Despite Ban

The San Francisco-based ride-hailing app will face fees of $328,000 each time it operates in the fast-growing European market.

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By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

Uber's plans for world domination have hit an expensive wall.

The District Court of Frankfurt has ruled that Uber is not operating within German law, and the ride-hailing company could face a fine of 250,000 euros, or $328,000, per violation.

The move comes just a month after Uber, which has received more than a billion dollars in venture capital from power players including Google and Goldman Sachs, was informed that a German regulatory ban on the service had been temporarily suspended.

Related: Stop Playing So Nice With Your Competition

The latest ruling asserts that Uber's operation violates The Passenger Transportation Act, according to a statement released today from the Taxi Deutschland, a German industry trade body. In the Uber ride-hailing system, drivers are not controlled, regulated or insured, the group said. Furthermore, Germany does not collect taxes on the fares.

Dieter Schlenker, the chairman of Taxi Deutschland, asserts that the Uber system is bad for both "society and employees," according to a translation of the statement, which was published in German.

Related: Looking to Be Everywhere, Uber Opens Its API to Big-Name Companies

Despite the ruling, Uber published a blog post today saying it isn't going to stop operating in Germany. The aggressive move is risky, but Germany is a lynchpin in Uber's expansion plans. Uber, which is headquartered in San Francisco, says Germany is one of the fastest growing European markets.

"Trying to limit people's choice doesn't ever seem like a good idea. However, it was the idea behind the recent lawsuit filed by Taxi Deutschland in Frankfurt," Uber wrote. "We believe innovation and competition is good for everyone – riders and drivers, everyone wins. You can't put the brakes on progress."

Uber says it will carefully review the claim from the District Court of Frankfurt, but that it plans to appeal the claim and "vigorously defend" its stance.

Related: Uber Hires Former Obama Campaign Manager to Battle the 'Big Taxi Cartel'

The Uber vs. Germany battle is a chapter of a larger innovation vs. regulation war. It's not clear who is going to back down in the battle, but Uber has deep pockets and popularity on its side, so it may very well be a long, drawn-out saga.
Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

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