Uber on Collision Course With Israeli Authorities Over Ride-sharing

The service will now be available 24/7, with the Transportation Ministry saying that’s illegal

File photo: Ordering Uber via its app.
ANDREW CABALLERO-REYNOLDS/AFP

Uber plans to introduce the final stage of its ride-sharing service in Israel on Thursday, putting it on a collision course with the government.

Until now, Uber had let users share rides with its service Uber Night, which operated in the Tel Aviv area and allowed passengers to hitch rides with drivers for pay. Starting Thursday, the service will be available 24 hours a day, seven days a week.

The Transportation Ministry has strongly objected to Uber’s service, arguing that it violates the law forbidding drivers to charge passengers if they don’t have a license to do so.

The new service will be called Uber Day, and Uber says it is adapted to suit the Israeli regulatory regime.

A Transportation Ministry source told TheMarker on Wednesday, “Obviously if someone gets into a vehicle via Uber’s service he is breaking the law — both the driver and the passenger.”

The source said the ministry is waging a legal battle against the company and is considering seeking a temporary restraining order as well as full criminal proceedings. Such proceedings would be launched against the company as well as its users, the source said.

The Transportation Ministry filed an indictment against Uber in the Tel Aviv transportation court in May, arguing that Uber Night enabled drivers to transport passengers for pay, violating the law. The indictment was issued following a six-month undercover and public investigation.

Another indictment was issued against Uber Israel chief Yoni Greifman, as well as six drivers who carried passengers in their own cars. That case is still waiting to be heard in court.

“A year after we launched our ride-sharing pilot Uber Night, we’re expanding it and offering passengers an efficient, safe and cheaper means of transport during the day as well,” Greifman said. “Tens of thousands of Israelis already use ride sharing apps, and we’re sure that Uber Day will offer another attractive option and limit private car ownership in the future.”

Uber added on Wednesday that drivers were eligible to charge users no more than the cost of maintaining a vehicle, as calculated by the Tax Authority.

Asked by TheMarker whether Uber drivers needed to report their revenues, the Tax Authority said the matter was being examined.

According to the indictment filed six months ago, Uber has recruited drivers with private vehicles and takes as commission 25% of what they charge passengers. The indictment also details rides that ministry investigators took with Uber drivers, including one in Tel Aviv from Arlosoroff Street to the Tel Aviv Port for 32.90 shekels ($9.37) — slightly less than a taxi would have cost.

That driver earned 800 shekels over a weekend driving for Waze, including a 100-shekel bonus and minus Uber’s commission, according to the indictment.