In the city of Rene Magritte, Uber Technologies Inc. finds itself in a surreal situation.

While the authorities of Brussels have claimed that the company’s Uber Pop product is illegal under city regulations, the service remains fully up and running.

“Brussels is one of our fastest growing European cities,” Filip Nuytemans, Uber’s operations manager in the Belgian capital, said in an interview. “We are within our rights in Belgium so there is absolutely no reason for us to back off, and we have not. Growth is increasing week after week.”

A kalidoscopic blur of events has taken place in Belgium’s capital since Uber started operations there in February, including a court ruling against the service, guerrilla tactics by licensed taxi drivers, and a clash between the city authorities and a senior official with the European Union, which has its headquarters there. Brussels authorities last week announced a fresh wave of controls, including potential car seizures against Uber.

Brussels is one of a series of flashpoints across Europe between licensed taxi operators and the San Francisco-based company, which offers a range of car travel products through its web application. Dutch police arrested four Uber drivers in Amsterdam yesterday after they were found to be using the Uber app for taxi services, while in Berlin the company is changing its business model to comply with German regulations and keep the service running.

Court Decisions

With permits that can cost 200,000 euros ($253,000), cabbies have taken to the streets of Europe’s finest capitals. It is a battle that has seen London drivers snarl traffic in the heart of the city, and a succession of German court decisions that, in various cities, have introduced, repealed and upheld bans.

As far as the Brussels government is concerned, the legal situation is clear:

“For the moment Uber doesn’t satisfy the minimum criteria required to carry out its activities,” Marc Debont, spokesman for city Transport Minister Pascal Smet, said in an e-mail. The “activity has been judged illegal by the Brussels judiciary.”

This interpretation is challenged by Uber, which says that the court ruling in question — a decision in April by the Brussels Commercial Court — has no practical effect, and that Uber Pop contravenes no local rules.

“There is absolutely no verdict against Uber that’s actually valid,” Nuytemans said. “We strongly believe in all our arguments as to why we are not a taxi, or within the taxi legislation.”

Private Cars

Uber Pop is a service with which drivers use their private cars to carry passengers and pay commissions to Uber. The company calls it “the low cost Uber” and markets it as a ride- sharing service, with drivers seeking to earn extra money on top of their main occupations.

Like other Uber products, it works via an app downloaded onto tablets and smartphones. Drivers are vetted by the company and have to meet certain criteria before they’re allowed to use the app to find customers. There are now more than 100 Uber drivers in Brussels.

“Before coming to Belgium, we looked really closely at the legislation, and at launching our professional driver service, Uber Black. But there’s a really old piece of legislation in Brussels that prevented us from doing so,” Nuytemans said.

“At that moment, we were also promoting Uber Pop, so we looked at the legislation closely with our lawyers. We saw that that product would be in line with the law, and we decided to launch it,” he said.

First City

This meant Brussels was the first city in the world where Uber deployed Uber Pop ahead of a professional driver service.

The court decision in April stemmed from a lawsuit filed against the web-based platform by Taxi Radio Bruxellois, a local dispatcher company, alleging that Uber was violating local rules on regulated taxi services, constituting a form of unfair competition.

“Technically, it was not a court case against us, because they sued the wrong entity,” said Nuytemans.

“There was a verdict by default because we didn’t show up, but that was addressed against the wrong company, not against the entity that is in charge of the platform,” he said. The “result was that they had to restart the case against Uber. By then it had been written in all the newspapers that Uber was banned.”

Legal Limbo

As legal limbo ensued, certain Brussels taxi drivers took matters into their own hands. They signed up as Uber customers, and requested a ride, then asked to be dropped at control points for officials working for Bruxelles Mobilite, the city’s transport ministry. This led to more than a dozen cars being impounded and subsequently released.

While the court judgment mentioned 10,000-euro fines, Uber says none have been handed out. The company expressed concern to Bruxelles Mobilite and the seizures ceased, said Nuytemans.

Uber’s presence in Brussels has received strong support from Neelie Kroes, the member of the European Commission in charge of the development of online markets. The commission, the European Union’s executive arm, has its headquarters in the city.

“Uber is popular in Brussels for a reason. Shutting down Uber won’t remove that reason, and that’s the main point,” Kroes said in an e-mail. “Regulators should protect us, but it’s not their job to stop people feeding their families and paying their bills by giving customers something they want.”

Public Contretemps

In a rare public contretemps between the EU institutions and the Brussels city authorities, Kroes slammed the court ruling and the favorable reaction to it from Smet’s predecessor, Brigitte Grouwels, to the point of suggesting the Belgian should have her job title changed to “anti-mobility minister.”

Grouwels retorted that Kroes’s stance represented a “savage liberalism” based around “survival of the fittest,” according to news agency Belga. “The Uber system is interesting, but there are rules and they should be respected,” she said, adding that she was open to talks.

In Brussels, the taxi system is largely based around two licensed operators, with a third based at Brussels’ Zavantem airport.

“Considering the broad definition of a taxi rendering service under the applicable Brussels regulation, it seems difficult for Uber to challenge that it should not be qualified as such,” Pieter Van Den Broecke, a partner with law firm Linklaters LLP in Brussels, said in an interview.

Stricter Regime

“From a general unfair-competition point of view, I do see there to be an issue with the operations of Uber in Brussels if other companies are complying to a much stricter regime in order to obtain a license,” Van Den Broecke said.

The Belgian Transport Union last week organized an awareness day at Brussels’ South Station to urge people to turn away from Uber, according to Belga. The company “arrogantly flouts all the rules,” the association said in a statement. “They avoid all the obligations which the real taxi industry should meet,” including on minimum wage, licensing, insurance and vehicle inspection, it said.

While insisting that Uber Pop doesn’t fall within the purview of taxi regulations, Uber has insisted that the service meets high operating standards. Nuytemans said the service is fully insured, conducts driver thorough background checks and monitors the cars’ roadworthiness under Belgian rules.

In Flux

“Safety is our number one priority” Nuytemans said. “It’s probably one of the safest products out there.”

Brussels isn’t the only European city where the legal situation around Uber is in flux. In the EU’s largest economy, Germany, Uber lost court rulings in September against bans issued by authorities in Berlin and Hamburg. In Frankfurt, a court said last month that a group representing traditional taxi dispatchers had waited too long to seek a quick ruling via an urgency procedure.

In France, the authorities introduced a decree requiring car-service apps to wait 15 minutes before picking up passengers.

The current Brussels administration, which took office in July, has indicated that it will seek to adapt the relevant regulations in a way that takes into account new technologies, potentially offering a solution to the impasse.

“The ultimate aim is to update the legislation as much for the traditional taxi sector as for new technologies, so that everyone can find their place in Brussels,” said Debont at the municipal transport ministry.

More Regulation

Uber itself says it’s ready to talk, including discussing more regulation of its Uber Pop service. “The law is there for interpretation, but we are very confident in our argumentation,” Nuytemans said. “If you want to put more regulation around the Uber Pop as a transportation system, then we are happy to have that discussion.”

In the meantime, Uber Pop continues to attract customers despite the Magrittesque developments.

“The growth in Brussels has been massive,” Nuytemans said. “We let the demand go where it goes, and then we follow with the supply.”

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net; Julia Verlaine in London at jverlaine2@bloomberg.net To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net; Patrick Henry at phenry8@bloomberg.net Jones Hayden, Reed Landberg

Tags: brussels, uber
Photo Credit: Uber is expanding in Brussels -- and on college campuses in the U.S. Pictured, Uber was enrolling campus brand reps at The University of Oklahoma this summer.