Hungary Passes Law That Could Block Uber Sites

Hungary passed legislation on Monday which could curb the activities of Uber after months of protests by taxi drivers, following in the footsteps of other countries that have banned some of its ride-hailing services.

Under the new law, the Hungarian national communications authority can block Internet access to "illegal dispatcher services", in a similar fashion to the way the regulator blocked access to illegal online gambling sites in the country.

"The bill aims partly to block the Internet access to illegal taxi, or other similar dispatcher services, if the authorities' other preventive measures are ineffective," Development Minister Miklos Sesztak wrote in the reasoning.

Taxi drivers in Hungary have demanded Uber be outlawed and its smartphone app blocked as they say its drivers breach regulations other taxis firms must adhere to.

UberPOP, a smartphone app that links private drivers with passengers, has prompted taxi driver protests across Europe and to date has been declared illegal by courts in Italy, Spain and Germany, with appeals pending in Belgium and the Netherlands.

France suspended the low-cost service last year after the government banned it under pressure from licensed taxi drivers and a French court slapped a hefty fine on Uber last week for running an illegal taxi service. A German court also upheld the ban on UberPOP last week.

Hungary issues taxi firms with dispatcher service permits, allowing a dispatcher service to transfer passenger requests to drivers under a series of criteria, such as a sizeable insurance deposit and an obligation to record data.

Without such permits it is illegal to offer rides for money, and the government can block Internet-based communication that enables that, the new law says.

While traditional taxi services in Hungary also have apps for ordering cabs, Uber does not yet have a dispatch permit.

"Uber will request the dispatcher permit from the Hungarian authorities. Currently we are preparing that administratively. This is also part of our regulatory compliance efforts," Uber's Hungarian operations director Zoltan Fekete said in a statement.

"Uber has emphasised legal compliance: our drivers took out permits and provide legal receipts," Fekete said.

"Uber seeks dialogue with decision makers in the hope that the current outdated regulations are replaced with a modern one tailored to new technology, centred around the interest of consumers," he said, adding that Uber has 150,000 Hungarian users and 1,200 drivers.

The new Hungarian legislation, which does not mention Uber by name, is due to come into effect in 31 days.

Dispatcher services in breach of the regulations are first fined and will then have their Internet access blocked for a year. The ban can be repeated.

© Thomson Reuters 2016