Germany still tough on tech companies, Uber learns

Ride-hailing services goes offline in three German cities due to regulations

Succumbing to pressure from new regulations, ride-hailing company Uber has decided to pause its service in three German cities: Düsseldorf (population 599K), Frankfurt (701K) and Hamburg (1.8 million). The service will continue to operate in two of the country’s largest cities, Berlin (population 3.6 million) and Munich (1.4 million).

When it comes to new technologies upheaving the status quo, Germany has demonstrated itself to be something of an inverse San Francisco. In San Francisco--and much of the Bay Area--innovations are often welcomed with open arms, embraced and cultivated for several years before seeing any stiff regulations barring their progress.

The obvious example is Airbnb, which avoided paying hotel taxes for six years before the city finally clamped down.

Germany, on the other hand, has proven to be unwavering when it deems that new technologies overstep their bounds. For example, Google has butt its head against data privacy rules in the country for several years. Last year, Hamburg's data protection commissioner Johannnes Caspar issued an order declaring Google to be acting unlawfully when accessing private user information without their express consent. This past April, Caspar rejected Google's appeal against the ruling.

Though the story in Uber wasn’t related to data privacy, the anti-innovation song remains the same.

Back in March, a German court issued a ban on Uber's use of unlicensed cab drivers to power its service. Each violation would be subject to a €250K fine (about $270K). This rule specifically singled out Uber’s lower-cost UberPop service, much to joy of traditional taxi services, so the company continued operating by only providing limousine and licensed cab drivers.

However, the limitation proved to squeeze Uber too tightly, so they’re suspending their services for the time being. I’ve reached out to confirm whether this is a temporary retreat or fairly permanent. Of course, Uber says it will be working closely with government officials to advance its operations as it has across the world.

The company, which has raised around $8 billion and has been estimated to be worth up to $50 billion, has been scoring hits and misses across the globe as it pours money and manpower into almost every large international market. Here's the tally from last month:

• Hit: London's High Court ruled that Uber's smartphone app is technically not a taximeter, and therefore does not break the law.
• Hit: India's government shared new rules that would open the doors to Uber and competitors, as long as they apply for permits from state transportation departments.
• Miss: China proposed new e-hailing rules that could hinder the company's ability to operate effectively in the country.

We’ll update this piece when we hear back from Uber on their future plans for the German market.