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Varga launches investigation of Uber

Hungary’s economy minister Mihály Varga today ordered the ministry and its institutions to launch an investigation in connection with the operation of San Francisco-based transport service Uber in Hungary, the minister wrote on his Facebook page today.

“Every passenger has the right to affordable, secure, clean and punctual taxi service. However, if a player appears in the market that does not keep itself to the fundamental conditions for transporting people, and gains advantage on the market, and what is more does not pay taxes, then steps need to be taken,” Varga wrote on his Facebook page.

According to Varga, Uber offers taxi services in Hungary without paying the necessary taxes, and drivers are chiefly working in connection with a firm in the Netherlands. Varga added that these driver offer services, but lack the professional background needed to offer such services. “The situation cannot remain like this,” Varga noted.

Uber is keen to engage in discussions with key decision makers and is open to co-operating with the government to set up a regulatory framework that will ensure a secure, environmentally friendly, and efficient alternative to traditional taxi services, Uber’s local implementation manager Rob Khazzam told vg.hu at the end of February. Uber Hungary Kft., incorporated in 2013 with a registered capital of HUF 500,000 and has a legal seat at law firm Nagy és Trócsányi Ügyvédi Iroda, a company affiliated with the current Minister of Justice, vg.hu added.

Approximately 60 cabs protested in mid-March in Budapest against Uber, precisely the service’s free promotion announced for a weekend in that same month. The protest involved a drive through the city center ending near the Castle District, Hungarian blog Kettősmérce reported late yesterday.

Uber launched its services, available through a smartphone application, in more than 200 cities around the world.

The company advertises a base fare in Budapest of HUF 300 and a HUF 130 per-kilometer fee, while the base fare for Budapest taxis was set at HUF 450 with a per-kilometer fee of HUF 280 as per a decree established in September 2013.