The U.S.-based ride-sharing service says new laws, created to appease taxi drivers, make it impossible for it to operate here.
U.S.-based ride-sharing service Uber said on July 13 that it is leaving the Hungarian market after months of demonstrations by taxi drivers led the Hungarian government to introduce tough new laws regulating drivers for hire. If the regulatory environment changes in the future, Uber said it would resume its service.
Uber said in a statement that the new law taking effect on July 24 makes it possible for “Uber drivers to lose their licenses or the license plates of their cars, despite the fact that they have all the necessary licenses and pay the required taxes”.
The company said it does not wish to expose drivers to these risks.
Uber had negotiated with the government in an effort to find legislation that would protect taxi drivers while letting the ride-sharing service operate, but the law finally passed seems to make it impossible for Uber to work in Hungary.
Hungary’s National Development Ministry alleged in its own announcement on July 13 that Uber would rather leave the country than engage in lawful operations, enter fair market competition with taxi drivers and pay taxes appropriately, according to Hungarian news agency MTI.
The ride-sharing service said the new legislation made it impossible to operate and alleged that the change is putting 1,200 people out of work, making it hard for them to take care of their families or to take advantage of modern technology.
Uber said it believes the Hungarian government’s decision opposes the European Commission’s policies as well as the attitudes of other European countries. It listed Estonia, Latvia, Lithuania, Poland, Spain, Ukraine, and the United Kingdom as countries that “decided to aim to regulate the sharing economy to be forerunners in the digital economy”.
The ride-sharing service currently operates in 480 cities globally. It says that the Hungarian law that blocks its operations is “unique in the world, and Budapest is this way becoming the only big city in the region that will not be offering the services of Uber”, the statement noted.
Uber had 160,000 users in Budapest, around 39-40% of Uber trips were ordered by foreigners, and most of their clients were between 20 and 35-years-old, Zoltán Fekete, the operative director for Uberʼs business in Hungary said, according to Hungarian news agency MTI.
The Hungarian operations of Uber received greater attention from the government here after taxi drivers conducted almost a dozen protests this year alone. The demonstrators complained that Uber drivers do not follow the same regulations as taxi drivers, and they could offer lower fares by essentially operating unlawfully.
The government, pressured by the taxi drivers, adopted changes that all but turned Uber cars into taxis.