Uber Banned From Operating Car-pooling in Israel

As of Wednesday, Uber Day and Uber Night will be not be allowed to run cars through their app due to insurance issues; taxis can continue to run

FILE PHOTO: A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017.
FILE PHOTO: A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017. Brendan McDermid/REUTERS

The U.S. ride-sharing service Uber was ordered by a Tel Aviv court on Monday to halt the limited service it provides in Israel as of 10 AM Wednesday, a Tel Aviv judge ruled on Monday, issuing an injunction in response to a petition filed by competing companies. 

Tel Aviv District Court Judge Eitan Orenstein issued the injunction after concluding that because Uber drivers lacked insurance to cover their passengers, he could not allow the company to provide its UberDay and UberNight ride-sharing services. The services, which are available only in the Tel Aviv area, make use of private cars and drivers. However, Uber’s ride-hailing service for taxi service may continue, the judge ruled. 

“If they don’t have insurance, I won’t allow them to travel even a meter,” Orenstein said. But he also had harsh words for the Taxi Driver Association, which together with Gett, the Israeli ride-sharing service formerly known as GetTaxi, had brought the suit: “You can’t stop progress. We’ve moved from the horse and wagon and we’re moving forward.”

Uber started service late last year with UberNight, which connects drivers with people needing a ride during night hours and charges only their share of the cost of the trip. It expanded a month ago into 24-hour service with UberDay in the hope that the two pilot programs would eventually pave the way for a full out launch of all its services in Israel. 

But Uber has met with formidable opposition, not only from the taxi drivers who stand to lose business from the competition but from the Transportation Ministry.

In May, the ministry sued Uber on the grounds that regulations forbid accepting money from passengers unless the driver has a taxi license. The case, which is still pending, names Uber’s local manager, Yoni Greifman, and six drivers as the accused. 

The ministry claims that not only the driver, but the passengers are in violation of the law. “Someone boarding an Uber car is a criminal - both driver and passenger,” a source at the Transportation Ministry, speaking on condition of anonymity, told TheMarker.

“The ministry is conducting a legal petition against the company, and there’s the possibility of filing of an interim injunction against its activities and the opening of a full criminal proceeding.  A criminal proceeding will be conducted against anyone who provides the service or is a passenger and against the company itself. The legal counsel of the transportation ministry is working with all the relevant parties to find the most appropriate path forward,” the source said. 

Advocates for ride- and car-sharing sites like Uber cite the paucity of public transportation in Israel compared to other Western countries and crushing traffic as reasons why the company should be allowed to operate in Israel. Israel’s transportation system is further compromised, they say, because there is no public transportation on the Jewish Sabbath. 

The injunction against Uber is the latest in a string of international setbacks relating to sexual harassment, data privacy and business practices at the company. The reputational damage has been such that Uber executives are traveling the globe to reassure regulators that the company is changing the way it does business, Reuters reported on Monday.

The company said it would comply with the Israeli court injunction, halting the UberNight and UberDay services in the Tel Aviv area, but signaled that it hopes to reach a long-term accommodation to allow it to operate in the country.

Uber said it remains committed to working with the Israeli authorities “to explore how technology can improve our cities with safe and affordable transportation alternatives”.