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French Law That Banned UberPop Service Survives Legal Challenge
French taxi drivers faced riot police officers as they demonstrated against Uber’s UberPop service on the Paris ring road in June.Credit Ian Langsdon/European Pressphoto Agency

The Constitutional Council in France upheld on Tuesday a law that banned Uber’s low-cost ride-hailing service, a much-awaited decision that underscores how national courts are enforcing limits on the company’s expansion into new markets.

The decision from the council upheld a section of a transportation law approved by the French Parliament late in 2014.

The law included a ban on the company’s UberPop ride-booking service, which used drivers who did not have a professional license to pick up paying passengers. UberPop is cheaper than Uber’s standard offering.

The council rejected Uber’s argument that the law would have also made ride-sharing illegal, affecting an accepted form of reducing travel costs for many people in France.

The council said in its decision that ride-sharing was unaffected and that the law and the ban “conformed to the Constitution.”

The ruling follows violent protests from Paris to Marseille by many French taxi unions. The protesters had argued that UberPop represented unfair competition for standard taxi services and did not comply with strict transportation rules.

It is unclear what the practical consequences of Tuesday’s ruling will be. In July, the company suspended its UberPop service in France until the Constitutional Council made its decision.

An Uber spokesman, Gareth Mead, said that the company was disappointed by the decision but that it would not have much immediate impact on its current business in France.

“We suspended UberPop in light of the risk of violence to our riders and driver partners and we will maintain this suspension — the majority of our business continues unaffected,” Mr. Mead said.

He added that there were more legal cases and decisions in the pipeline and that while the Constitutional Council had upheld the transportation law, that ruling cleared the way for the other cases against Uber to proceed.

For instance, a French local court declined last year to ban UberPop. That case went before the Paris Court of Appeal and was suspended pending the Constitutional Council’s ruling. The case will now go forward, Mr. Mead said.

Two Uber executives in France are set to stand trial on Sept. 30 on behalf of the company in connection with charges including “deceptive commercial practices” and illegally organizing taxi services through UberPop.

The company has been on a recent charm offensive in France after it was caught off-guard by the violent opposition to UberPop, which allows anyone with a car to pick up passengers through the company’s smartphone application.

Uber has claimed that the transportation law, which bars drivers who lack professional licenses from picking up passengers, unfairly benefits taxis and should be repealed.

Parisian taxi drivers say they must pay as much as $270,000 for a license to operate and argue that Uber has the unfair edge.

The company, which is now valued by investors at roughly $50 billion, has faced regulatory problems in many places it operates, including the United States and South Korea.

Its service, which allows people to hail a ride via an app, has expanded to more than 300 cities in over 50 countries.

In many countries, policy makers and taxi unions have argued that the company does not follow local transportation and safety rules. Regulators also have raised concerns over Uber’s working practices, as the service relies on drivers who are independent contractors, not full-time employees.

Uber has often continued to offer its services despite legal demands that it stop operating. It also has brought legal challenges against regulators when it believes they are hindering the company’s growth.

Unlike Airbnb, the home-rental company, which has actively built a relationship with French policy makers, Uber initially failed to foster close connections with policy makers when it expanded into France in late 2011, according to people with knowledge of the matter, who spoke on the condition of anonymity because they were not authorized to speak publicly.

In recent months, however, Uber executives have contacted many of France’s leading politicians in an attempt to counter claims that some of the company’s services are illegal, though some lawmakers remain skeptical over the company’s aims.

“Modernity is innovation, the quality of service, the sharing economy,” said Bernard Cazeneuve, France’s interior minister, after the anti-Uber demonstrations in July. “It is not black-market jobs and clandestine work organized against the rule of law by Uber.”

To counter opposition in France and other European countries, Uber has started to lobby the European Commission, the executive arm of the European Union, to weigh in on whether nations have the right to ban the company’s offerings.

A Spanish judge also recently referred a case against Uber to Europe’s highest court, which will now decide whether the company is a transportation service, which would force it to follow existing rules, or a mere digital service, which would give the company greater leeway.

As Uber’s legal challenges mount, the company’s executives have stressed their willingness to use European courts to fight against the perceived dominance of the region’s taxi industry.

“If governments take decisions that we believe are contrary to European law, then of course we will have to decide what to do next,” Mark MacGann, Uber’s head of European policy, recently told reporters when asked about potential future legal action. “Regulation in some countries was written decades ago before we all carried smartphones in our pockets.”

Read more http://rss.nytimes.com/c/34625/f/640387/s/4a137176/sc/7/l/0L0Snytimes0N0C20A150C0A90C230Ctechnology0Cfrench0Elaw0Ethat0Ebanned0Euberpop0Eservice0Esurvives0Elegal0Echallenge0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm


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