Court Issues Injunction Against Uber Services in Israel

In response to a lawsuit by groups representing taxi drivers, the Tel Aviv District Court on Monday issued an injunction preventing Uber from offering its services to Israelis. The injunction, which Uber will not protest, will remain in effect until the company can prove that its drivers are insured in the same manner as taxi drivers.

In its comments to Uber, the court said that its job was to protect the public. “If you do not insure your drivers we will not let you drive three feet,” the court said. “Where is the regulator? What about the drivers? Maybe they have a criminal background? Someone has to watch out for the safety of the public. We have no doubt that Uber has harmed taxi drivers; you have an advantage over them,” in that taxis and taxi drivers are heavily regulated. “Bring assurances that drivers are properly insured to drive others and we can talk,” the court said.

However, the injunction is not the end of the story. Speaking to attorneys for the taxi driver groups, the court said that it was clear that smartphone-based ride-sharing apps were the future of public transportation. “It’s very difficult to stop progress,” the court said. “We have moved on from horses and buggies, and progress continues.”

Uber began servicing Israelis full time at the beginning of November. But its relationship with legal authorities in Israel has been rocky. Last May, the Ministry sued Uber and filed criminal charges against it for running an illegal taxi service.

Charges have also been filed against the CEO of Uber Israel, Yoni Grifman. The Transport Ministry has cited evidence in its criminal complaint that drivers were “earning” 75 percent of the fare they charged, with the rest given to Uber as a service fee. That goes far beyond “vehicle maintenance,” the Ministry said.

And after Uber expanded its service to the daytime hours earlier this month, the Transport Ministry issued a statement saying that anyone who sells ride services in their own cars — along with anyone who takes those rides — “is a criminal. The Ministry is in the midst of a lawsuit against the company, and we are likely to seek an injunction to halt their operations while the case is being tried. We will prosecute anyone who offers rides or takes a ride in an Uber vehicle, as well as bring charges against the company itself. Our legal department is working with the relevant authorities in order to determine how best to proceed.”

Uber has claimed that it operates legally. In a statement, the company said that the payment a driver receives is for vehicle maintenance, not for the passenger’s ride. TheMarker quoted tax officials as saying that the Tax Authority had not yet decided on whether Uber drivers had to report the sums they received as income.