There is good news for all hard-working Uber customers in Austria. The Supreme Court (OGH) in Vienna has decided that the company's recently changed business model is legal.
Fact check: Does this ruling mean that Uber's future is secured? The discussion as to whether the American ride-hailing company's business model is legal has preoccupied the Austrian administration and judiciary for years, but Austria is not the only case here. (There were also heated discussions in Germany and other EU countries about the legitimacy of the company). This means: Uber's future is not secure!
The business is definitely economically lucrative , with 2,800 vehicles on the road in the federal capital Vienna alone and generating 1.5 million euros a month for the US company.
After Uber was briefly banned in Vienna, the company converted its branch in Austria and then continued the business with a travel agency license.
In October 2019, the Viennese taxi drivers (specifically the taxi company 40100), who wanted to force the business model out of the market at all costs, achieved a partial victory before the Vienna Higher Regional Court, which classified Uber's business practices at the time as unlawful.
There was a risk of a fine of up to 100,000 euros for each additional journey accepted.
The previous taxi companies' argument is that an Uber driver does not have to obtain his own taxi license and cannot guarantee sufficient insurance coverage for passengers in the event of an accident.
The actual reason is probably the ongoing price war.
On Uber, the price is determined via the app and is made up of the demand of the searching customers and the cars available. A trip from A to B can cost 5 euros at 11:00 a.m. and suddenly cost 10 euros at 11:00 p.m. due to increased demand. The advantage for customers is the clear price transparency. The price of the booked trip is fixed when you order a car and cannot be influenced by traffic jams or other traffic disruptions.
The situation is different with normal taxi companies, where the fare consists of a mixture of a fixed flat rate, time spent and kilometers. For many customers, it is therefore often impossible to estimate how much the trip will ultimately cost.
Now the matter was heard before the highest court of the Republic and Uber won in the final instance. The judges ruled that “a business license for the travel agency business is required for the arranging of passenger transport (to be carried out by other transport companies”). At least the company's existence is secured until September 2020.
In response to the disputes between Uber and the other taxi companies, the National Council passed a new law, the so-called “Lex Uber”, which provides for the merger of the taxi and rental car industries. The taxi companies' lobbyists in particular campaigned strongly for the rapid implementation of the law. This is due to come into force in September 2020.
The new law represents a bitter defeat for Uber, as the reform stipulates that every car transport company has uniform tariffs and that every driver must purchase a taxi license in advance. The US company's last hope remains that an amicable agreement can be reached, especially with regard to the fixed price, as without such an arrangement there would be no leeway for Uber.
In summary, according to the Supreme Court ruling, Uber currently has a valid business model, but the ruling could become obsolete after the new “Lex Uber” comes into force and force the ride-hailing company out of the Austrian market from September 2020.
Sources:
ORF: Year-long dispute: OGH agrees with Uber
Courier: Taxi achieves another stage victory over Uber
Nachrichten.at: OGH ruling: Green light for Uber in Austria
Small newspaper: Uber earns 1.5 million euros per month in Austria
Author: Alexander Herberstein; Article image Shutterstock / By Frederic Legrand – COMEO
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