Beginning Friday, ride-sharing company Uber is set to expand its service throughout Israel. Until now, Uber had been operating a test program in Tel Aviv, only during the evening hours. Beginning Friday, Israelis will be able to order Uber cars anywhere and anytime, and Israelis who want to drive for the company will be welcomed to sign up.
Not so fast, the Transport Ministry told the company Thursday. A report in TheMarker quoted Ministry officials as 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 Thursday in advance of the expansion of the service, the company said that the payment a drive 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.
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.
Grifman told TheMarker that “a year after we started the nighttime pilot program in Tel Aviv, we are expanding our services to daytime. Tens of thousands of Israelis are already using our ride-sharing services, and we are positive that expansion of the program will provide an alternative that will save Israelis money, and encourage them to use their vehicles less.”