Uber's “win-at-all-costs” expansion strategy fails in Germany

Uber has shut its doors in Frankfurt, according to The New York Times, closing the office after just 18 months of operation, meaning the company's only German presence is now in Munich and Berlin. The retreat is said to have come after local licensed taxi drivers in the city refused to work with Uber, and when the cheap UberPop service, similar to UberX, faced legal hurdles in Frankfurt and was eventually banned last March by German regulators. Uber’s withdrawal from Frankfurt is one of several retreats out of European cities by the firm in recent months: with service withdrawn from Hamburg and Dusseldorf in November after less than two months in each of the German cities, and UberPop recently pulled in Amsterdam. Meanwhile, licensed taxi drivers in cities such Madrid and Paris are yet to settle with Uber, and regulators in London are considering new laws that could impact Uber’s operations in the city.

FRANKFURT — Uber is rapidly expanding its ride-hailing operations across the globe. But here in this city of 690,000 — less than the population of San Francisco, Uber’s hometown — the company recently did something unusual: It retreated.

In early November, Uber shut its small office in Frankfurt’s centuries-old city center after just 18 months of operation, mothballing the online platform that had let people in the city hail rides through a smartphone app. The pullback was spurred in part by drivers like Hasan Kurt, the owner of a local licensed taxi business, who had refused to work with the American service.

With more than 20 years of experience as a taxi operator, Mr. Kurt said he disliked how Uber barreled into Frankfurt in early 2014, using primarily unlicensed drivers who had not passed the same exams and health checks required of licensed drivers. That low-cost service, UberPop, which is similar to UberX in the United States, faced legal challenges and was eventually outlawed, last March, by German regulators.

Uber then tried to recruit licensed operators like Mr. Kurt to build its service within the letter of the law. But Mr. Kurt would not budge.