French court upholds ban on unlicensed taxis, hitting Uber

An Uber app on a mobile phone in Washington, D.C.
Andrew Caballero-Reynolds | AFP | Getty Images

France's highest administrative court on Friday backed restrictions on unlicensed taxi services in a decision adding to U.S. start-up Uber's legal troubles.

The San Francisco-based company, which connects drivers with passengers through a smartphone app, faces legal challenges in several European countries where licensed taxis drivers have protested against what they see as unfair competition.

France's constitutional council said that unlicensed taxis had to return to their bases after dropping off a customer or await new fares from a parking lot, upholding a ban on them driving around looking for new clients.

The court also backed restricting apps like Uber's that both indicate the location of near-by taxis to potential clients on their smart phones and their availability.

A Paris appeals court had been waiting for the decision before ruling on whether to ban Uber's unlicensed taxi service, known as UberPOP.

Uber the next Facebook?

The case before the appeals court was brought by three competing car services—LeCab, GreenTomatoCars and Transdev Shuttle—and taxi unions.

It sought to ban the UberPop service that allows drivers to use their private cars to offer rides to others at cheaper rates than traditional taxis.

The constitutional council, however, rejected fare restrictions that would have prevented Uber's drivers from charging by the kilometre and which a spokesman for Uber France said was the most important part of the ruling for the company.

Created by two Silicon Valley entrepreneurs frustrated by difficulties encountered when trying to hail a cab in Paris, Uber's popular app was launched in 2010 and is now available in nearly 270 cities.

In France, the government sought to calm conflicts between taxis and Uber by reworking the rules on how traditional taxis compete with chauffeured cars.