Uber suffers fresh legal setback in Germany

A German court on Thursday barred Uber from offering rides through car hire firms, saying it lacked a licence to do so, in the latest legal setback for the US ride-hailing app. A regional court in Frankfurt found that Uber's business model, which relies heavily on the use of vehicles from local car rental companies in Germany, violated several anti-competition laws.

The judges said Uber should have a rental car licence of its own because it was more than just a go-between connecting drivers and customers. "From the passenger's point of view, Uber is providing the service," said judge Annette Theimer, pointing out that Uber set the prices and could pick the drivers.

The court also accused Uber of "not adequately checking" the car hire companies it works with, noting that not all drivers returned to their head office in between rides as legally required. The ban is effective immediately but can still be appealed.

Uber downplayed its impact, saying it could continue to offer rides through independent contractors via Uber Taxi. But the ruling is yet another blow to Uber in Germany, where a court in 2015 banned it from letting non-professional drivers offer rides in their own cars - severely curtailing the firm's ambitions.

The federal association of taxis and rental cars welcomed Thursday's verdict, saying the court "had made it clear that Uber's system is illegal in Germany". Uber stressed that customers could still use the app and said it would consider making changes to its business model to comply with the ruling.

"We will look at it closely and adapt our offer if necessary so we can continue to be there for our users and drivers," tweeted Tobias Froehlich, head of communications for Uber in Germany. The Californian firm has long faced an onslaught of legal challenges in Europe, where taxi drivers have furiously accused it of not playing fair.