Uber announces leaving Hungary

On-demand ride share service company Uber is suspending its services in Budapest as of 24 July when new legislation enters into effect, facilitating the blocking of platforms that offer "illegally operating taxi services." This practically means the exit of Uber from Hungary, news portal 444.hu reported on Wednesday.

Several Uber drivers received the following notification on Wednesday: "We regretfully inform you that at noon on 24 July 2016 Uber is suspending its services in Budapest."

According to the financial website portfolio.hu, the use of the word 'suspending’ may suggest that the exit is not for good.

Zoltán Fekete, operations manager at Uber in Hungary, held a press conference in which he confirmed Uber’s exit. He said Uber was willing to be part of a system that allows it to pay taxes in Hungary, but it realised the government is not willing to agree to that.

Uber is excluded from transporting passengers in Hungary by a new government decree, according to which passenger transport companies must operate a dispatch service. By definition Uber does not need one as it offers its services via a mobile application and only traditional taxi companies use dispatch services for this.

According to a bill, submitted by Development Minister Miklós Seszták, it will be the responsibility of the transport authority to "make temporarily inaccessible" applications ensuring such services and websites promoting them.

The ban can be ordered if the party organising or brokering the taxi service fails to comply with dispatch regulations stipulated in the relevant government decree and due to the lack of the necessary permit authorities imposed a fine on the company yet the company continues to offer the service in question. The ban may be ordered for a 365-day period.

The effective blocking will be organised and monitored by the National Media and Telecommunications Authority, and every electronic telecommunication service provider must comply with the resolution to block the website and the application.

Uber is threatened that - as of July 24 - the driver's licence of Uber drivers would be revoked and the licence plate of their cars also taken away, banning the use these vehicles even for private purposes.