With shutdown in Spain, Uber sputters into the new year

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Old 02-Jan-2015
Post With shutdown in Spain, Uber sputters into the new year

In dealing with regulators, Uber typically takes a "beg for forgiveness, rather than ask for permission" approach. That doesn't always work out so well.

The latest country to put up roadblocks against the ride-sharing service is Spain. Uber, which runs an app that pairs passengers with drivers using their own cars, announced late Tuesday that after a Spanish court issued an injunction, it is "respecting the law" and "temporarily suspending" its service.

Uber had been operating in Spain since April.

Over the past year, Uber has grown by leaps and bounds. The San Francisco-based company started 2014 running its service in about 60 cities and now is in more than 260 cities in 50 countries. But that rapid expansion has brought with it battle after battle. Beyond Spain, Uber has also clashed with regulators across the US, as well as in Germany, France, the Netherlands, India, Thailand, the UK, China and Korea.

Those clashes haven't dulled Uber's quest for new markets. In early December, the company announced that it had pulled in $1.2 billion in new funding, which would largely go toward expansion in the Asia Pacific region.

Less than a week later, a judge in Spain ordered Uber to end all operations in that country, saying its drivers have no official authorization to operate and are unfairly competing with licensed taxis. The judge also demanded that Spanish telecommunications operators and banks not support Uber's app.

Now with Tuesday's receipt of the formal ruling, Uber's service is on hold while the company appeals the decision.

We will "collaborate with Spanish politicians to develop the modern framework needed to create a permanent home for Uber and the sharing economy," Uber Spain's country manager Carles Lloret wrote in a blog post. "We will also collaborate with the national government's working group to develop modern regulations for new technology-enabled services."

Around the world, regulators' complaints regarding Uber vary from wanting stricter rules on insurance, car inspections and driver background checks to having problems with the company's permitting process.

Uber suspended operations in Portland, Ore., earlier this month over permitting, and last month shut down its service in Nevada over what the company called "confusion" about its business model. On Wednesday, French regulators published a decree that pledged a crackdown on Uber drivers who lack professional licenses, according to the Wall Street Journal.

Despite Uber coming up against regulatory roadblocks worldwide, it appears the company will continue its approach that deals with regulators after the fact. During an interview with the Wall Street Journal a couple years ago, Uber CEO Travis Kalanick insisted that Uber is legal, despite officials' concerns.

"We don't have to beg for forgiveness because we are legal," Kalanick told the Journal. "There's been so much corruption and so much cronyism in the taxi industry and so much regulatory capture that if you ask for permission up front for something that's already legal, you'll never get it."

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