France fines Uber $1 million for illegal taxi service

Ronny Kerr · June 9, 2016 · Short URL:

UberPOP completely skirted the law, ignoring license and insurance requirements

This is the fraction of its last funding round that Uber will have to pay for its lawbreaking in France: 1/3500.

A French court today fined Uber 800,000 euros (approximately $906,000) for illegally operating UberPOP in the country, according to Reuters. Akin to UberX in the U.S., but with even less regulation, UberPOP effectively allowed anyone with a car and a phone to offer rides through the platform.

Uber says it will appeal the decision.

"We stopped UberPOP last summer and we are still disappointed by this judgment," an Uber spokesperson said. "The European Commission has just published guidelines that support such services."

The European Commission, the executive body responsible for proposing legislation and implementing decisions within the European Union, said last week that EU member states should only ban "sharing economy" services like Uber and home-rental site Airbnb “as a measure of last resort.”

The guidelines are partly based on the fact that Uber, Airbnb, and similar sharing economy services contributed about 28 billion euros (approximately $31 billion) to Europe's economy in 2015. Additionally, the Commission said that member nations have no reason to protect existing business models, like taxi companies. Popularity of the services could be another factor, as polls have shown that one in six Europeans already use sharing economy services.

Even so, Uber faces existential questions throughout the EU. Courts in Germany, Italy, and Spain have already deemed UberPOP an illegal service, and appeals are pending in Belgium and the Netherlands.

Originally launched in February 2014, UberPOP eventually grew to 10,000 drivers, all while skirting or outright flouting the law. France officially banned the service in January 2015 under the Thévenoud Law, which required that drivers carrying passengers for hire need to have licenses and insurance. Uber ignored this and kept operating UberPOP until things came to a head in July, with massive taxi driver demonstrations in the streets and the arrests of Uber France CEO Thibaud Simphal and Uber Europe GM Peirre-Dimitri Gore-Coty. The photo at left, from a June 2015 protest, shows riot police pushing an overturned car.

At that point, Uber finally suspended the service.

Though Simphal and Gore-Coty each faced a possible maximum sentence of five years in jail and a 1.5 million euro fine, they got off a lot easier: Gore-Coty was dealt a 15,000 euro fine and Simphal a 10,000 euro fine.

Uber continues to operate in France with more than 12,000 professional drivers (across its other services uberPOOL, uberX, uberGREEN, uberBERLINE, and uberVAN) serving 1.5 million passengers.

Though Uber already plans to appeal the decision, it’s not doing so because it can’t afford the fine. The company just last week closed a massive $3.5 billion round of funding from the Saudi Arabian government, so a $1 million fine is just a small drop in the bucket. But Uber is fighting legal battles on many fronts in many countries around the world, as it seeks to keep the opportunities open for still-growing services.

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Uber is a ridesharing service headquartered in San Francisco, United States, which operates in multiple international cities. The company uses a smartphone application to arrange rides between riders and drivers.