Embattled US ride-hailing service Uber announced today its first suspension in an EU country, saying its will halt operations in Hungary on July 24 because of new legislation making it "impossible" to operate.
The same day, a new law comes into force that allows the Hungarian authorities to block "a provider of taxi services operating without a proper dispatch centre" for up to one year.
A Uber statement said that the legislation passed by parliament last month "makes it impossible for Hungarian drivers, in spite of having licences and properly paying taxes, to use their own vehicles to make money".
The US company has become one of the world's most valuable startups, worth some USD 50 billion (44 billion euros), as it has expanded to more than 50 countries including 21 EU member countries other than Hungary.
Last month Saudi Arabia pumped USD 3.5 billion into the company to help it fund further growth. The firm says it is not a transport company like taxi firms, and that it simply connects drivers with passengers.
But it has faced regulatory hurdles and protests from established taxi operators in most locations where it has launched. Last week a French court fined it 800,000 euros (USD 900,000).
In Europe, Uber has filed complaints with Brussels against France, Germany and Spain, arguing that restrictive national or city policies are in violation of European Union law.
Since Uber entered the Hungarian market in November 2014, around 1,200 drivers and 160,000 riders have registered with the company.
The new law followed months of protests by licensed taxi drivers who complained that orders have been decreasing sharply.
They say Uber drivers - who often charge significantly cheaper fares - should be subject to the same stringent rules regulating official cabs.
Uber's head in Hungary told AFP today however that the legislation "punishes innovation, is disadvantageous to both competition and consumers, and provides no advantage to the state".
Around 39-40 percent of Uber trips were ordered by foreigners, and most of their clients were between 20 and 35 years old, Zoltan Fekete said.
