Uber Technologies will suspend its UberPOP ride-hailing service in France, the U.S. company said on Friday, after it faced sometimes-violent protests and local authorities denounced it as an illegal taxi service.
After fierce protests last week by licensed French taxi drivers who argue it threatens their livelihood with unfair competition, France took two executives from California-based Uber into custody and said they will face trial in September.
France's legal clampdown was the latest setback for Uber in Europe. An Italian court in May banned unlicensed car-sharing services, two months after a German court issued a similar ban and imposed stiff fines for violations of local transport laws.
"We have decided to suspend UberPOP in France from 2000 (1800 GMT) this Friday evening, primarily to assure the safety of Uber drivers," Uber France head Thibaud Simphal told Le Monde daily, adding that some drivers had been targets of violence.
"The second reason is that we want to create a spirit of reconciliation and dialogue with public authorities to show we are acting responsibly," he said.
Prime Minister Manuel Valls welcomed the decision but said France's licensed taxis needed to improve the quality of their service, often criticised by locals and foreign visitors.
"Taxis need to reform too, to contribute to our country's attractiveness," he told reporters at an event in east France.
In a June 25 protest in numerous French cities, cabbies blocked roads to the capital's airports, overturned cars and burned tyres to press for the scheme to be abolished.
Police said 70 cars were damaged and seven police officials injured in the protests. Ten people were arrested.
The protests were among the fiercest in a series of demonstrations across Europe against Uber, whose backers include investment bank Goldman Sachs and technology giant Google.
It is valued in excess of $40 billion.
Born out of the frustration of two Silicon Valley entrepreneurs trying to catch a cab in Paris, Uber's services have mushroomed since being launched in 2010 and are offered in nearly 270 cities worldwide.
Taxi drivers in France pay income tax and welfare charges and, depending on their location, sometimes have to pay hundreds of thousands of euros for an operating licence. They argue they face unfair competition from unlicensed drivers who have no such costs and so can undercut them on price. A final ruling on UberPOP's legality in France is due around September.
For its part, Uber argues it is offering a much-needed service that complements licensed taxis and is offering a sideline income for some 10,000 people in France.
"We understand that new technologies can be destabilising, particularly for established companies and their employees ... But it is unacceptable to see violence come to the fore, it is up to us to better explain what we are doing and the advantages of the Uber platform," Uber France said in a statement.
Didier Hogrel, president of France's national taxi federation, told BFMTV he was ready to discuss ways to promote parallel services such as licensed chauffeur-driven limousines, which currently face heavy restrictions in France.
But of online apps like UberPOP he said: "We won't be happy until all these illegal applications are banned."