Uber may sound like a successful name for a company operating in Germany, but in reality the American ride sharing service has seen nothing but struggles in the country, and with the recent announcement that service in Frankfurt is now suspended, the road is looking pretty bumpy for the company’s German endeavors.
When Uber entered the German market, it’s anyone can be a taxi concept came under scrutiny as the country’s regulations did not quite match up with the startup’s strategy. Germany takes their taxi licensing seriously and have not let up in their fight to get Uber off the road.
Since losing a number of court battles in various German cities, Uber has been forced to retreat from most areas, and with this week’s withdrawal from Frankfurt, one of the country’s most popular cities, Uber is going to have to look at whether or not it is worth fighting to stay active in the remaining two cities: Berlin and Munich.
“Have we made mistakes? Absolutely,” Mark MacGann, Uber’s head of European policy told CNBC. “But the current system in Germany artificially protects incumbents who think they have the right to own the market.”
Uber’s expansion into Frankfurt seemed like a great idea on paper, as the city puts a cap on the number of taxis, often causing a demand that far exceeds the number of available rides. Throw in the fact that Uber was often one-third cheaper than traditional taxis, one would think that Uber would be a hit.
Even though the service didn’t become an overnight hit, it upset enough of the traditional taxi services that were legally not allowed to increase their fleets to keep up. As their fight put an increased amount of pressure on Uber, the company became more aggressive, ultimately turning off potential new customers.
CNBC has a lot more on the story of what went wrong in Germany and what the company faces if they decide to continue fighting for space on German roads. Check it out in the source link below.