April 16 (Bloomberg) -- A Brussels court’s decision to ban cars using Uber Technologies Inc.’s taxi application is “crazy” and protects a “cartel,” European Union Commissioner Neelie Kroes said, adding to a global debate about the legality of ride-sharing.
The comments were a welcome piece of good news on the regulatory front for Uber. Although the service has surged in popularity by letting users in cities including New York City, Paris and Tokyo book rides from smartphones, Uber is facing increasing challenges from a taxi industry that’s trying to safeguard its turf.
“This decision is not about protecting or helping passengers,” Kroes, who is in charge of promoting technology and innovation in Europe, said of the Brussels ban on her website yesterday. “If Brussels authorities have a problem with Uber, they should find a way to help them comply with standards.”
Cars in Brussels that use the app will be subject to a 10,000 euro ($13,820) fine after the ruling, said Pierre-Dimitri Gore-Coty, a spokesman for San Francisco-based Uber. He declined on comment on whether the company will appeal.
Recent lawsuits in Chicago, New York and Seattle are targeting ride-sharing services like Uber and Lyft Inc. There’s also a wrongful death case filed in San Francisco, where a 6- year-old child was struck and killed by an Uber driver.
French President Francois Hollande attempted to impose a 15-minute pickup delay on Uber and other private car services, which was struck down in February by the constitutional court. Parisian taxi drivers blocked traffic from airports that month to protest about private car services, which don’t have to purchase a taxi permit at a cost of more than 200,000 euros.
Uber’s Gore-Coty said that the “UberPop” product used in Brussels isn’t comparable to professional services because it’s aimed at individuals who drive their own cars and pick up passengers a few times a week.
“We’re very committed to finding ways so that our product stays in the city,” Gore-Coty said. “We’ve had a lot of support from people in the city.”
Still, Brussels limits taxi licenses to keep the industry viable, and Uber drivers will have to follow rules to ensure safety, said Joris Poschet, a spokesman for transport minister Brigitte Grouwels.
Uber, which has a high-end service for limousines and luxury cars as well as lower-priced options for cars driven by ordinary people, is expanding outside the U.S. into Europe and Asia, and is available in almost 100 cities, according to its website.
Venture capitalists are piling into the market. Uber raised $258 million last year at a $3.5 billion valuation from investors including Google Inc.’s venture arm. Lyft raised $250 million this month from Alibaba Group Holding Ltd. and others.
Lyft, like Uber, is based in San Francisco, where there’s no shortage of challenges. California’s insurance regulator said last week that car-booking services run by Uber, Lyft and Side.Cr LLC are creating “serious” gaps in coverage for drivers, passengers and pedestrians.
--With assistance from Andrew Harris in federal court in Chicago, Ari Levy in San Francisco and Andrew Clapham in Brussels.