In a statement issued by the German capital’s local government on Thursday, officials explained that as Uber cars aren’t traditional taxis, passengers using the service may not be covered by insurance.
Officials said if Uber failed to comply with its order, they’d hit the startup with a 25,000-euro ($33,400) fine. The ruling follows another ban imposed by officials in neighboring Belgium in April.
“The decision from the Berlin authorities…is seeking to limit consumer choice for all the wrong reasons.”
Fabien Nestmann of Uber Germany said his company plans to challenge the decision and “fully expected” that “Berlin will follow the Hamburg authorities’ lead and overturn the prohibition order.”
He added, “The decision from the Berlin authorities is not progressive and it’s seeking to limit consumer choice for all the wrong reasons. As a new entrant we’re bringing much-needed competition to a market that hasn’t changed in years. Competition is good for everyone because it raises the bar and ultimately it’s the consumer who wins.”
Nestmann said Uber wanted to play its part “in building smart cities of the future where innovative urban transport solutions such as Uber will be an integral part of the transport mix.”
Related: Cab drivers in Europe protest against Uber
App- and web-based startups like Uber, which challenge traditional models of service delivery, are causing authorities and competing businesses around the world to carefully consider how they handle such services.
Uber rival Lyft recently ran into trouble with New York City officials, while room-rental service Airbnb has also faced criticism from a number of hoteliers and apartment owners.
Another car-related app, MonkeyParking, recently ended operations in San Francisco following a cease-and-desist order from the City Attorney’s office, while Uber itself has faced protests from traditional cab firms in many countries, including a Europe-wide demonstration by taxi drivers in June.
