A German taxi organization won a fast-track ruling that may halt the use of Uber Technologies Inc.'s ride-hailing application in the country.
Uber drivers don't have the necessary permits to carry passengers under German law, a Frankfurt court said in the emergency ruling dated Aug. 25, citing evidence provided by Taxi Deutschland Service Gesellschaft fuer Taxizentralen eG.
Governments and regulators in cities around the world are restricting Uber's business on the grounds it poses safety risks and unfairly competes with licensed taxi services. The Frankfurt case is one of at least four legal actions against the company in the country.
Neil Gordon-Henderson, an Uber spokesman, said the company will appeal and continue to operate in Germany, one of its fastest growing markets.
"We believe innovation and competition is good for everyone, riders and drivers," he said. "You cannot put the brakes on progress."
Investors including Goldman Sachs Group Inc. and Google Ventures are putting money into the burgeoning market for apps that let users order taxis and cars or share rides using their smartphones. San Francisco-based Uber, which is active in more than 40 countries, raised $1.2 billion in June, giving it a value of $17 billion.
While the decision was issued under a fast-track procedure, the judges reviewed arguments submitted earlier by Uber to fend off such an order.
Under the ruling, Taxi Deutschland, a Frankfurt-based association of German cab dispatcher, can ask the court to impose a payment of as much as 250,000 euros ($328,000) each time Uber violates the ban.
Taxi Deutschland will monitor Uber and will ask the court to impose the sanctions, its spokeswoman Anja Floetenmeyer said.
"We're not afraid of our adversary because the law is on our side," she said. "Goldman Sachs and Google can pour as much money in as they want. Even Uber has to abide by the law."
If a private party enforces a preliminary court order in Germany, it may have to pay damages if the other side later overturns the ruling in court. A similar ruling won by a cab driver in Berlin earlier this year wasn't enforced because of the risk.
Hamburg traffic authorities told Uber in July to stop operating in the port city, saying that transporting people without a license is against the law. The city's administrative court last month ruled that the wrong city agency issued the ban and Hamburg can't enforce the restriction while it reviews a challenge filed by the company.
Berlin issued a ruling blocking the service in August and a case over its enforcement is pending at an administrative court in the German capital. The cities of Munich and Dusseldorf are also considering bans. The city authorities say the service is illegal because the drivers offering rides via Uber's smartphone app need a cabbie license and aren't properly insured.
--With assistance from Stefan Nicola in Berlin.
To contact the reporter on this story: Karin Matussek in Berlin at kmatussekbloomberg.net To contact the editors responsible for this story: Anthony Aarons at aaaronsbloomberg.net Chad Thomas