In a first for the European Union, Uber has suspended operations in Hungary, blaming new legislation that makes the company ‘impossible to operate’ in the country.
A new law comes into force this week that allows Hungarian authorities to block ‘providers of taxi services operating without a proper dispatch centre’ for up to a year at a time. Parliament passed the legislation last month, but is an unpopular move with Uber, who point out that their drivers ‘have licenses and pay proper taxes’, and are simply using their own vehicles to generate some income. It denies vehemently being a taxi firm, but simply a service to match paying customers with drivers.
Uber currently functions in 21 EU countries, and over 50 across the globe. It currently has complaints sitting with Brussels again France, Germany and Spain, arguing that national or regional policies are restrictive for it to operate within. However, this is the first instance that it has actually stopped operations in an EU country.
Uber entered the Hungarian market in November 2014, and have 1,200 drivers and 160,000 riders on their books. They have, however, seen months of protests by licensed taxi drivers in the capital Budapest, who say that the service is affecting their business; as the fares are cheaper, and they’re not affected by stringent licensing laws.
Of course, these laws don’t apply to Liftsharers – as no profit is being generated, and drivers were already making the trip.
A government ministry said that Uber had decided to leave Hungary “rather than to agree to operate legally and compete fairly on the market with tax-paying Hungarian taxi drivers. The government supports innovative solutions, but is committed to ensuring that players on the passenger transport market operate according to the law and pay taxes under equal terms,” said a statement by the National Development Ministry published by the MTI news agency. Uber acquired an edge over other market competitors by dodging taxes and disregarding rules and regulations”.
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Author Lex Barber