Credit: Taxiarchos 228/Wikipedia

France charges Uber bosses over 'illegal' practices

French resistance to the taxi-hailing app intensifies, but Uber remains defiant.

by Adam Gale
Last Updated: 17 Sep 2015

It’s a difficult question, how to react to a brash, disruptive startup like Uber, but the French appear to have found an answer: ‘with extreme prejudice’. Authorities in France have charged two Uber executives with ‘complicity in the illegal exercise of the taxi profession’ and ‘misleading commercial practices’.

Western European general manager Pierre-Dimitri Gore-Coty and French boss Thibaud Simphal had been arrested on Monday in connection with a complaint from a taxi union. Now, they face trial at the end of September.

At times there can be something comfortingly familiar about the way the Gallic nose turns up at laissez faire economics. We expect disgruntled Parisian taxi drivers to hold riotous anti-Uber strikes, as they did last week. But even for the French this is pretty extreme.

Of course, they have a point. The service at issue – UberPop, the name of the taxi-hailing app service in France – is technically illegal under French law, because Uber drivers are unregulated and as such pay less tax. ‘UberPop should be dissolved and branded illegal and cars should be seized,’ said French president Francois Hollande.

Uber has complained to the European Commission and is challenging the law in France’s constitutional court, which should rule on the matter by the end of the summer.

Given France’s economy-dragging commitment to protecting its industries (remember this is the nation that prevented yoghurt-maker Danone from being bought by Pepsico on ‘national security grounds’), Uber and its 1,500 drivers in France probably shouldn’t hold out too much hope.

Still, this probably isn’t going to worry the Uber mothership too much. The firm has already raised $6bn (£3.8bn) in venture capital funding and is hoping to get another $1bn or so by issuing bonds that will later convert to equity, ahead of an eventual IPO.

Investors clearly aren’t fussed by Uber’s bottom line-shredding world domination ambitions. A term sheet for potential investors seen by Bloomberg indicates a $470m operating loss from $415m revenues, over an unspecified time scale. The sheet also says Uber is growing at 300% a year.

An Uber spokesperson said these were ‘substantially old numbers that do not reflect business activities today’, while the firm told Fortune it did not distribute the term sheet. Still, the message is clear – like many a disruptive start-up before it, Uber’s going for growth.

And if France says non to Uber’s vision of progress, so be it. The firm will no doubt be consoled by the fact that the world is a very big place, though the same may not be said for its harassed executives and drivers.


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