The start of anew week brings bad news for Uber. An Israeli court has announced that Uber must stop its ride-sharing service in Israel which came less than a month after beginning the service in Tel Aviv. This will affect the very vast number of customers–about 57 million nationwide—and will affect the company’s bottom line significantly.
The court handed out the sanction to the company after receiving complaints from Israel’s Transportation Ministry, Taxi Driver Union, and a rival of Uber. The complaint stems from Uber’s drivers, who seem to not have proper licenses and insurance. Uber will stop operational in the city on Wednesday.
This comes only one year after Uber launched its pilot ride-sharing program in Israel. The quickly met disapproval from the Transportation Ministry, who filed suit against the company in May for violating regulations.
Uber claimed that it should be under different regulations than other transportation services because payments received from passengers were only to cover the maintenance of vehicles and not to gain any profits for the drivers.
The company did not answer any questions related to this issue. However, lawyers for the company stated that they will obey to the court presiding.
“We are committed to working with the Israeli authorities to explore how technology can improve our cities with safe and affordable transportation alternatives,” the company mentioned later. The lawsuit was carried by Gett Inc. and the National Taxi Drivers Union.
Uber has also announced that UberTaxi also gives riders the option to request a licensed taxi through the app, which isn’t affected by the ruling.
The news coming from an Israel-based research center, Kohelet Policy Forum, announcing the court verdict displays the necessity for a change in legislation regarding ride sharing.
“It’s regrettable that the Ministry of Transport is preventing progress at the expense of Israeli residents,” quoted Kohelet researcher Sefi Keller, who penned a statement on ride sharing for the center.