Uber executives found guilty but avoid jail in landmark French ruling

Uber executives found guilty but avoid jail in landmark French ruling

by Anne-Sylvaine Chassany and Leslie Hook  2016-06-13 12:12:55.0

A FRENCH court has found Uber and two of its executives guilty of starting an “illegal” car-booking service, in the first criminal ruling to target managers of the California car-hailing app that has disrupted the taxi business around the world.

The court ruled Uber was guilty of “misleading commercial practices” and facilitating an illegal taxi operation as it fined the company €800,000. It also ordered Pierre-Dimitri Gore-Coty, head of Uber in western Europe, and Thibaud Simphal, head of Uber in France, to pay €30,000 and €20,000, respectively.

But the court stopped short of imposing prison sentences or barring the executives from running companies in France, Uber’s second-largest market by revenue.

A portion of the fines was “suspended”, meaning Uber and the executives will pay only half unless they commit another crime.

Although the ruling is the first criminal conviction the company has suffered, it comes amid a growing European backlash.

The start-up was banned in Spain for one year and UberPop — its now-defunct service that connected customers with drivers without professional licences — has been outlawed in Germany, Italy, Belgium and parts of Sweden.

Uber also pulled out of three German cities last year, saying regulations had made its business untenable.

The Paris convictions came the same day a court in Frankfurt rejected Uber’s appeal against a judgment that imposed a Germany-wide ban on UberPop. Dieter Schlenker, head of Taxi Deutschland, a trade association, said the judgment “benefits all those who find it hard to defend themselves alone against the interests of big corporations”.

The battles are taking a mounting toll. In the US, recent fines include a $100m settlement of a class action lawsuit. Legal and regulatory uncertainty is a key obstacle to any eventual public offering.

Speaking at a Berlin conference on Wednesday, Uber CEO Travis Kalanick denied Europe was “difficult ground”, noting that the company had experienced regulatory problems on its home turf of the US as well.

“This is not just a European thing,” he said. “In the US, we’re just two years ahead of schedule.”

The French executives spent a night in jail last June and stood trial in February after taxi drivers wreaked havoc in the streets of Paris to vent their anger over UberPop. The company suspended the service in July after demands by President Francois Hollande’s government.

Uber said it would appeal against the verdict. “We stopped UberPop last summer and are still disappointed,” the company said. “The judgment does not impact our service in France today.”

Residents of other large French cities have quickly adopted Uber’s traditional service, which uses licensed drivers. The country now boasts 12,000 professional Uber drivers and 1.5-million customers using its app. Since suspending UberPop, its service has continued to grow.

© 2016 The Financial Times Limited

An Uber logo. Picture: REUTERS/ROBERT GALBRAITH

An Uber logo. Picture: REUTERS/ROBERT GALBRAITH

A FRENCH court has found Uber and two of its executives guilty of starting an “illegal” car-booking service, in the first criminal ruling to target managers of the California car-hailing app that has disrupted the taxi business around the world.

The court ruled Uber was guilty of “misleading commercial practices” and facilitating an illegal taxi operation as it fined the company €800,000. It also ordered Pierre-Dimitri Gore-Coty, head of Uber in western Europe, and Thibaud Simphal, head of Uber in France, to pay €30,000 and €20,000, respectively.

But the court stopped short of imposing prison sentences or barring the executives from running companies in France, Uber’s second-largest market by revenue.

A portion of the fines was “suspended”, meaning Uber and the executives will pay only half unless they commit another crime.

Although the ruling is the first criminal conviction the company has suffered, it comes amid a growing European backlash.

The start-up was banned in Spain for one year and UberPop — its now-defunct service that connected customers with drivers without professional licences — has been outlawed in Germany, Italy, Belgium and parts of Sweden.

Uber also pulled out of three German cities last year, saying regulations had made its business untenable.

The Paris convictions came the same day a court in Frankfurt rejected Uber’s appeal against a judgment that imposed a Germany-wide ban on UberPop. Dieter Schlenker, head of Taxi Deutschland, a trade association, said the judgment “benefits all those who find it hard to defend themselves alone against the interests of big corporations”.

The battles are taking a mounting toll. In the US, recent fines include a $100m settlement of a class action lawsuit. Legal and regulatory uncertainty is a key obstacle to any eventual public offering.

Speaking at a Berlin conference on Wednesday, Uber CEO Travis Kalanick denied Europe was “difficult ground”, noting that the company had experienced regulatory problems on its home turf of the US as well.

“This is not just a European thing,” he said. “In the US, we’re just two years ahead of schedule.”

The French executives spent a night in jail last June and stood trial in February after taxi drivers wreaked havoc in the streets of Paris to vent their anger over UberPop. The company suspended the service in July after demands by President Francois Hollande’s government.

Uber said it would appeal against the verdict. “We stopped UberPop last summer and are still disappointed,” the company said. “The judgment does not impact our service in France today.”

Residents of other large French cities have quickly adopted Uber’s traditional service, which uses licensed drivers. The country now boasts 12,000 professional Uber drivers and 1.5-million customers using its app. Since suspending UberPop, its service has continued to grow.

© 2016 The Financial Times Limited

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